Twice is not always nice – Title Tip of the Week from Watson Title Services of N FL

Recently we’ve noticed a lot of unnecessary “double box checking” on page 4 of the NEFAR contract.

The confusion may come from not understanding what certain fees are.

Here are the two most common “double box checking” we see.

‐Title Insurance Endorsements: these are endorsements required by the buyer’s lender related to the mortgage, and as such are usually a buyer’s fee. It can be found in the buyer’s section on line 186 and in the seller’s section on line 205. If both boxes are checked
and left uncorrected, the assumption is that the costs will be split between the parties, and the mortgage company will require the Settlement Statement to reflect that fact. If a seller finds out they are paying this, and discovers it at the last minute, if they require it to be changed, it could delay closing as the settlement paperwork will have to go back to the lender for approval.
‐ Title Search: this fee is traditionally a seller’s fee that goes to the title insurance underwriter. It can be found in the buyer’s section on line 189 and in the seller’s section on line 205. If both boxes are checked and left uncorrected, the assumption is that the costs will be split between the parties. Often times this was not the desired outcome and can lead to grumpy buyers being charged for something they were told was not their responsibility.

Unless there is a desire for buyer and seller to split all closing fees, there is no reason that both buyer and seller sections should have both these boxes checked. It should be an either/or.

The best way to avoid this problem if both boxes were inadvertently checked at execution of the contract is to go over your draft settlement statement in detail with your customer as soon as it is available. If a correction is needed on the contract, there would be plenty of time to get a change made and agreed by both parties, and if needed the buyer’s lender.

Details matter, and remember if there is anything on the contract that concerns you, talk it over with your broker.

You can download a PDF of this title tip here.