FAQs
Residential Title & Settlement
What is title insurance and why do I need it?
Title insurance is a one time policy that protects you against claims or defects in the title to your property that were not discovered during the title search. It covers issues like undisclosed liens, errors in public records, fraud, and forgery.
There are two types:
- An owner’s policy (which protects the buyer)
- A lender’s policy (which protects the mortgage company)
What is a title search?
A title search is a thorough examination of public records to confirm the legal ownership of a property and to identify any liens, encumbrances, or other issues that could affect the transfer of ownership.
This search ensures that the seller has the legal right to sell the property and that the buyer will receive a clear title.
How long does the settlement process take?
A typical residential settlement takes about 30 to 60 days from the signing of the agreement of sale to closing. However, timelines can vary based on factors like mortgage approval, title search results, and any issues that need to be resolved before closing.
What are closing costs and who pays them?
Closing costs are fees associated with the real estate transaction, including title search fees, title insurance premiums, transfer taxes, recording fees, and settlement agent fees.
What is the PA realty transfer tax?
Pennsylvania charges a realty transfer tax of 2% of the sale process of real estate. This is typically split equally (1% each) between the buyer and the seller. Some municipalities may levy additional local transfer tax (e.g. Philadelphia and Pittsburgh)
Do I need an attorney for my settlement?
While Pennsylvania law does not require attorney involvement at settlement, attorney oversight can provide an added level of protection and peace of mind. Attorneys can review documents, identify potential issues, and help safeguard your interests throughout the transaction process.
What documents do I need to bring to closing?
Buyers should bring a valid government-issued photo ID and a certified or cashier’s check for the closing costs (or arrange a wire transfer in advance). Sellers should bring their photo ID, house keys, garage openers, and any relevant warranties or documentation for the property.
Commercial Title & Settlement
How does a commercial settlement differ from a residential settlement?
Commercial settlements tend to be more complex, involving larger sums, more detailed title searches, environmental considerations, zoning reviews, and more extensive documentation. They often require review of leases, existing contracts, and business entity documents. Attorney involvement is strongly recommended for commercial transactions.
What is a commercial title search?
A commercial title search isa more comprehensive examination than a residential search. It typically includes a full chain of title review, UCC (Uniform Commercial Code) searches, tax lien searches, judgment searches, bankruptcy searches, and environmental lien searches to uncover any potential issues with the property.
What is a title commitment?
A title commitment (or title binder) is a document issued by a title insurance company that outlines the terms and conditions under which it will issue a title insurance policy. It identifies any requirements that must be met before closing and any exceptions to coverage. Reviewing this document carefully is a critical step in any real estate transaction.