Title insurance is usually required when there is a lender involved in the transaction. What it does is insure against monetary loss from defects in the title. Where a lender is concerned, it also insures from the invalidity or unenforceability of mortgages whenever there is financing. The title insurer will defend against any claims like defects, liens or other matters which encumber and challenge the title. They may also reimburse for the dollar value incurred, depending on the policy, just like any other insurance. It is not required in cash deals. Also, the policy premium is paid once and is valid for length of ownership.

A boundary survey will outline the exact boundaries of the property. It will show easements for utilities like water, sewer, power lines, etc., identify overlaps, gaps or encroachments that may exist, such as fences, driveways, or buildings on the property, and can identify possible boundary disputes. The title insurance underwriter will generally accept an existing survey provided that it is less than 10 years old (generally speaking), and assuming that the survey meets the following requirements:

• The property must be platted, single family residential
• The prior survey shows boundaries of the platted land and the location of all improvements
• Certified by the surveyor to any prior or current owner, lender, or title insurer
• The seller has to complete a "satisfactory affidavit" that will certify, to the best of their knowledge, the following: There are no improvements currently located on the property that are not shown on the survey; There are no improvements to any adjoining lands that encroach on the property; The affidavit is given to induce the title underwriter to rely on the prior survey
• Approval from the underwriting counsel for the title underwriter must be obtained

Also called a title search, this will weed out any recorded liens against the property. However, it will not reveal municipal charges that can become unrecorded liens if not addressed prior to closing. Also important to note: unrecorded liens are not covered by title insurance. A municipal lien search will show unpaid service charges, sewer, gas or water systems serving the property. It will also show any liens for waste fees by a county or municipality. It will also check for unresolved code violations, building permits that haven't been closed out, or unpermitted structures/additions. Because off of the listed items are not actually related to the title, your closing agent isn't required to run a municipal lien search. As you can imagine though, it's highly recommended.

There are several costs which are negotiated between a buyer and a seller prior to signing the contract. They are:

• Municipal lien search ($75 - $125)
• Title search ($75 - $100)
• Owner's title insurance policy; $0 up to $100,000 = $5.75 per $1,000, over $100,000 up to $1,000,000 = $5.00 per $1,000, $1 million - $5 million = $2.50 per $1,000. For transactions over $5 million, it is advised to contact your chosen provider for a calculation.
• Closing fee ($650)

Additionally, you can expect the following as a buyer:

• Boundary survey: Varies based on size, location, topographic features, etc. of the property but a good rule of thumb is $450 - $750. Before assuming you can use a survey already on file, be sure to seek the proper advise to verify it is still eligible. 
• Recording fees & costs: The cost to record documents like a deed and a mortgage into the public records is $10.00 for the first page and $8.50 for each page afterwards. Typically, a deed will be 1-3 pages and mortgages are 15-30 pages. If your transaction involves financing, a Documentary Stamp Tax of $3.50/$1,000 of the loan amount and an Intangibles Tax or $2.00/$1,000 of the loan amount are applied per Florida statutes. The seller will also pay a Documentary Stamp Tax on their end in the amount of $7.00/$1,000 based on sale price.
• Mortgage Lender Costs: Consult with your lender. You will be issued a Loan Estimate (LE) which will give you a detailed breakdown of costs.
• Appraisal: If applicable, this can range from as low as $350 to $800. 

Hope this adds value.

Adi Rakanovic

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