Closing on a home is an exciting milestone, but it comes with various costs. Homebuyers often find themselves navigating through a maze of expenses, with title fees being a significant component. In this article, we’ll delve into what title fees are, who bears the responsibility for them, and the typical costs associated with the home-buying process, specifically tailored for Sonoran Title Company in Arizona.
What Are Title Fees?
Title fees revolve around the right to own and use a property. These fees encompass the expenses associated with closing costs, compensating a title company for reviewing, adjusting, and insuring the property’s title. A crucial step in this process is a title search, wherein the company investigates potential issues like encumbrances or liens, ensuring a clean title transfer.
Tip: To gain a clearer understanding of your closing costs, seek mortgage approval to get an estimate and streamline the process.
A List Of Mortgage Title Fees
Title Search Fee
- What it covers: Examination of public records, determining property ownership, revealing claims or liens.
- Cost: $75 – $200 (varies by location).
Title Settlement Fee
- What it covers: Administrative costs of closing, including escrow, survey, notary fees, and deed preparation.
- Cost: Variable, may include in other fees like attorney’s fees.
Lender’s Title Insurance
- What it covers: Protects the lender from property claims.
- Cost: Usually 0.5% – 1.0% of the sale price.
Owner’s Title Insurance
- What it covers: Protects the owner from undiscovered claims or liens.
- Cost: Advisable, price varies but considerably smaller than potential future issues.
Attorney Fee
- Cost: Incurred if a real estate attorney is hired for title review.
Abstract And Recording Fees
- Abstract cost: $200 – $400 for an update, potentially $1,000+ for a new abstract.
- Recording fees: Approximately $125 (national average).
Where To Find Your Title Fees
You can locate title fees in crucial documents:
- Closing disclosure: Provides an itemized list of total closing costs, including title fees.
- Loan estimate: Lender’s educated estimate of closing costs and cash required to close.
Buyer Or Seller – Who Pays The Title Fees At Closing?
Responsibility varies by location; it’s negotiable and can be reflected in the purchase agreement. In some areas, sellers pay the buyer’s title insurance, while buyers cover lender’s title insurance, recording, and title search fees. This can be reversed depending on negotiations.
How Much Are Title Fees On Average?
Title fees fluctuate based on location, company, and inclusions. Generally, closing costs, including title fees, range from 3% – 6% of the purchase price.
Are Title Fees Negotiable?
While many title fees are regulated, negotiations on who bears the costs are possible. Buyers may negotiate for seller concessions, where the seller covers part or all of the closing costs.
The Bottom Line: Title Costs Are Worth It
Despite the expenses, the assurance and legal proof of undisputed ownership make title costs worthwhile. Collaborate with your real estate agent and/or attorney to comprehend and potentially negotiate these fees.
Embark on your home-buying journey with confidence by understanding title fees, down payment requirements, and closing costs. Initiating the approval process can provide a more accurate estimate for your budget.
For further inquiries, you can reach out to Sonoran Title Company at sonorantitleco.com or contact Cindy at cindy@sonorantitleco.com.
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