It's the big day.

The day you go to the title or escrow company, sign your name on the dotted line, hand over a check and prepare
to take ownership of your new home.

It's also the day that you and the seller will pay "closing" or settlement costs, an accumulation of separate charges
paid to different entities for the professional services associated with the buying and selling of real property.

It's too often a day filled with uncertainty and stress.

To help you better understand this confusing subject, the Land Title Association has answered some of the
questions most commonly asked about title, closing and closing costs.

What services will I be paying for when I pay closing costs?

You will usually be paying for such things as real estate commissions, appraisal fees, loan fees, escrow charges,
advance payments such as property taxes and homeowner's insurance, title insurance premiums, pest inspections
and the like.

How much should I expect to pay in closing costs?

The amount you pay for closing costs will vary; however, when buying your home and obtaining a new loan, an
estimate of your closing costs will be provided to you pursuant to the Real Estate Settlement Procedures Act after
you submit your loan application. This disclosure provides you with a good faith estimate of what your closing costs
will be in the real estate process. An itemized list of charges will be prepared when you close your transaction and
take title to your new property.

Can I pay for my closing costs in installments?

No, and it is easy to understand why. Many different parties will have fulfilled their responsibilities and be awaiting
payment upon closing. The title or escrow company will disburse money to those parties, pursuant to the escrow
instructions, when funds are available.

Will I be allowed to write a personal check to cover my closing cost?

Your closing funds should be in the form of a cashier's check, issued by an institution from the state of your
purchase, made payable to the title company or escrow office in the amount requested. A personal check may delay
the closing or may be unacceptable to the title or escrow company. An out-of-state check could also cause a delay
in your closing due to possible delays in clearing the check.

How much can I expect to pay for Title Insurance?

This point is often misunderstood. Although the title company or escrow office usually serves as a meeting ground
for closing the sale, only a small percentage of total closing fees are actually for title insurance protection.

Your title insurance premium may actually amount to less than one percent of the purchase price of your home, and
less than ten percent of your total closing costs. The title policy is good for as long as you and your heirs own the
property with the payment of only one premium.

Why are separate owner's and lender's title insurance policies issued?

Both you and your lender will want the security offered by title insurance.

Your home is an important purchase, and you will want to be certain your home is yours, all yours. Title insurance
companies insure your rights and interests in order to protect you against claims.

Your lender is looking to insure the enforceability of their lien on your property and marketability. What is meant by
"marketability"? Local lenders will "originate" a loan here, and, often, sell it to an out-of-state investor. This investor,
who may never see the property, needs to know that he has a valid and enforceable lien. Title insurance is the way
of making certain. Without a current title policy, the loan is essentially unmarketable.

What does my Title dollar pay for?

Title insurers, unlike property or casualty insurance companies, operate under the theory of "risk elimination."

Risk elimination can only be accomplished after an intensive period of risk identification.

Title companies spend a high percentage of their operating revenue each year collecting, storing, maintaining and
analyzing official records for information that affects title to real property. The issuance of a title insurance policy is
highly labor-intensive. It is based upon the maintenance of a title "plant" or library of title records, in many cases
dating back over a hundred years. Each day, recorded documents affecting real property are posted to these plants
so that when a title search on a particular parcel is requested, the information is already organized for rapid and
accurate retrieval.

Trained title experts are able, with the aid of their extensive title plants, to identify the rights others may have in your
property, such as recorded liens, legal actions, disputed interests, rights of way or other encumbrances on your title.
Before closing your transaction, you can seek to "clear" those encumbrances which you do not wish to assume.

The goal of title companies is to conduct such a thorough search and evaluation of public records that no claims will
ever arise. Of course, this is impossible--we live in an imperfect world, where human error and changing legal
interpretations make 100 percent risk elimination impossible. When claims do arise, title insurance companies have
professional claims personnel to make sure that your property rights are protected pursuant to the terms of your
policy.

To conclude, when you pay for your title insurance policy, you are paying for a team of professionals who have
worked together to deliver you a title insurance policy which represents protection for your ownership of real
property.

Who can I look for straight answers on Title, Closing, and closing costs?

Title or escrow company personnel are available to review and explain your title policy and your closing statement.

Are you ready for the AgorillaREALTOR experience? Remember: "It's a jungle out there; why monkey around when
you can hire Agorilla"  Let's get started!

Reference: Article by CLTA. Retrieved from iHouse, 10/24/08. Written in whole.
Closing and Title Costs - Title & Escrow
Hawaii Homes for Sale - Hawaii Real Estate
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