Category Archives: Buying

One of the biggest mistakes people make when trying to figure out Title/Settlement related closing costs is to just ask, “What is your Settlement Fee?” That only tells a small part of the story in line 1102 of the HUD, and more often than not gives a false impression what the actual closing costs are. It provides about as accurate of a picture of closing costs as driving by a home gives a potential homebuyer an idea of its interior condition.

As Owner’s Title Insurance on line 1103 is at a rate promulgated by the State of FL, you need to look further to find variable costs that may be charged to the buyer or seller. Most of your major cost differences can be found in line 1101, “Title Services and Lenders Title Insurance.”

Each HUD is different, but in broad terms line 1101 is the sum of two parts; first the “Lenders Title Policy…”, line 1104, that rolls up your Lender’s Policy (Simultaneous Issue), FL Form 9, and various endorsements. Second are the “Other title fees and reimbursements” that you often won’t see broken out item by item. You usually can figure that out as a group by subtracting line 1104 from line 1101.

Make sure that each cost is clearly explained, as what are seen as buyer and seller costs can vary depending on county convention and terms of the contract. We itemize all our charges on our HUDs to make it easy for you to explain to your customers. Not everyone itemizes charges, but we can help you figure it out. Draft HUDs are great – but are even better when they provide item-by-item specifics. If you have a “value shopper” who wants to look around, we’ll be happy to show them a side-by-side comparison with our costs.

Remember, if you are trying to figure out what the block 1100 Title charges are, in addition to getting the promulgated Owners Title quote, make sure and ask:
1. What is your settlement or closing fee in line 1102? Do you charge the buyer and the seller?
2. What do you charge for simultaneous issue of the loan policy (if not a cash purchase)?
3. How much do you charge for each endorsement?
4. What other fees and reimbursements do you charge in the 1100 block, by item, which are not included in line 1102 and 1104 as covered in questions #1-3?

The last two HUD to HUD comparisons we’ve done – our total Block 1100 Title Charges were $400 and $112.50 less than two of our competitors.

Especially when buyers are offering to pay some of the seller’s closing costs (usually including some to all of the Owner’s Title Insurance) buyers cannot be required to use any specific settlement services provider. To make sure you have the most transparent closing process possible, make sure you specify in the contract, preferably using the “Additional Terms and Conditions” section in lines 409-418, that “Settlement Services and Title Insurance to be provided by Watson Title Services of N FL Inc.”

You can get the PDF for this Title Tip here.