As a seller you want to sell your home as quickly as possible, for the highest price with least amount of headaches. In order to achieve these goals you need to choose the right company and agent and be sure that you do everything possible to make your home as attractive as possible to potential buyers. Selling a home can be a difficult process. Real estate is becoming more and more complex. Studies have shown that the anxiety and stress levels associated with buying or selling a home can be equivalent to a divorce or the death of a spouse. Let us help you smooth out the process and save you $$$ in the process.

Choose an experienced full time agent who will protect your interests, especially in a tough negotiation. More often than not, the goal in the real estate industry is "sell" rather than "represent". Many have an undeclared mission statement that reflects "salesmanship" rather than "representation" of Buyer or Seller. First and foremost, ethically and legally, a real estate agent should be continuously aware of his or her responsibility to the client.

Market Timing When Selling
Ask anyone and you’ll get a different opinion on when is a good time to sell. The big reason given for not selling is that it’s not a good market. You don’t need a good market to sell a home. Priced correctly, almost any home will sell quickly. The reason a home does not sell is because it’s priced too high for it's present condition and location. Many sellers make the mistake of pricing their home based on what they need to get out of it. Unfortunately, buyers don’t care what you need to get out of the property. They base their offer on what other similar properties have sold for in the past and what similar properties are selling for at present.

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Tax laws
There may be tax implications to selling your home so before making any decision I would advise consulting your financial advisor. Below is a brief summary of the new tax laws:

1. An exemption of up to $250,000 of long term capital gains for a seller's principal residence. Long term is classified as 24 months or greater.

2. Couples will get up to a $500,000 exemption for long term capital gains.

3. Exempt amounts are reusable every two years. This eliminates the old once per lifetime "$125,000 gain rule".

4. The maximum tax rate on capital gains over $250,000 will be reduced from 28% to 20%.

5. The roll over provision is gone and the only provision for the new law is that one must owner occupy their principal residence for two years or more.

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Understanding Real Estate Agency
On the surface all real estate agents seem alike. They all charge similar fees and provide similar services. However picking the wrong agent can cost you thousands. One of the first things your new agent should discuss with you is real estate agency. Most buyers don't understand the difference between a listing agent, a buyers agent, a transaction broker or who represents whom in a transaction. A single agent represents either the buyer or seller but not both parties. A transaction broker represents both parties in a limited fashion. Click to view Florida’s Agency Disclosures, Single Agent Disclosure or Transaction Broker Notice. You may also choose a third option  No Brokerage Relationship.

The Buyers (Selling) Agent
The selling agent is the buyer's agent exclusively. He or she has a responsibility to represent you and look out for your interests. You may or may not have a written agreement (Buyer's Broker Agreement) with your agent.

The Listing (Sellers) Agent
The listing agent is the seller's agent exclusively. He or she has a responsibility to represent the seller and look out for the seller's interests. The listing agent almost always has a written agreement called a listing contract that specifies among other things, the price, commission amount, and the authorization to put the property in the MLS, split the commission with the selling broker, and put a yard sign in front of the property.

The Transaction Broker (Buyer and Seller)
There are time when a real estate agent will represent both the buyer and seller in a transaction. This happens when a buyer who is not represented by a buyers agent calls on a sign, ad, or Internet listing. The listing agent will show their property listing to the buyer. If the buyer decides to write an offer for the home without employing their own agent they will ask the listing agent write the offer. Before writing the offer, the listing agent has the buyer sign the transaction broker notice and the seller sign the transition to transaction broker notice form which discloses that the agent will not work to represent one party to the detriment of the other party when acting as a transaction broker to both parties. This is perfectly legal but not always in the best interest of the buyer. When you make an offer to buy a house, you are entering a negotiation. The seller wants as high a price as possible and the buyer wants the lowest price possible. If a Realtor represents both sides, there is a conflict of interest, though an ethical Realtor can equally represent both sides. Most Realtors are very ethical and take their responsibilities seriously. However, If the listing Realtor knows how much you are willing to pay for a home or the loan amount you have been qualified for, and that information gets somehow passed on to the seller even though they are also representing you as the homebuyer, you are at a disadvantage. You won’t be in this position, wondering if your getting a good deal, if you hire your own agent to protect your interests.

Seller Beware
A seller interviews agents to get their opinion on what their home should sell for, what price to list the home at and to hear their marketing plan. Most agents will provide pricing opinions within a few thousand dollars of one another. However, there is usually at least one agent who says he can get the seller significantly more for the property than the other agents. This agent will lavish praise on you and your home, how special it is, how good the market is, and how he knows it will sell for more. What do you the seller do? You list your home with the "pie in the sky" agent who promises the world. Then the property sits there because it's overpriced. A few weeks or possible months later you wonder why there have been few showings and/or no offers on your home. At this point the "pie in the sky" agent tells you that your home is overpriced and maybe you should lower the price. In the meantime you’ve wasted precious time and you are now furious at the agent for misleading you. The lesson here is, do not choose a listing agent based on their unrealistic value of your home. This type of agent is either a blatant liar or has no idea of what is going on in the local market.

Understanding How Agents Get Paid
Many buyers and sellers don't understand how agents are paid. Some think the buyer has to pay a fee for representation. Here's how it works: When a seller lists a property for sale, the listing agreement includes a commission clause that stipulates how much commission the seller will pay. It's usually a percentage of the final selling price, let's say six percent. Typically that 6% commission will be split between the buyers agent and the listing agent at the close. The listing broker lists the home in the MLS notifying all the other brokers that the commission split is 3% to the selling broker. However, in certain situations the buyer pays a commission. For example, the buyer may want to buy an unlisted home from a private party. The buyer can hire an agent to write the contract and pay him direct. But generally with most listed MLS properties the seller will pay the entire commission.

THE LISTING AGREEMENT AND REQUIRED DISCLOSURES

Listing Agreement
The Listing Agreement is a contract between you and your agent to sell your house. This contract details each parties responsibilities, the commissions to be paid and under what circumstances. You should ask for a copy a listing agreement to review or sit down with your agent to go over this document. Listing agreements are flexible and can be tailored to each clients needs and desires.

Disclosures
There maybe numerous other disclosure forms that must be filled out by you and your agent. Some of the more important forms are the Seller’s Disclosure, The Homeowner’s or Condo Association Disclosures and the Lead-Based Paint Disclosure. These forms are used to disclose material facts about the property so that the buyer is aware of known defects, expenses or issues impacting the property. There are various time periods in which a buyer is to receive these disclosures.

The Seller’s Disclosure
This is a disclosure form that is filled out by the seller and the listing agent and is signed by the buyer and the seller. This form discloses all known material defects in the property. In general your agent should fill this form out before listing your home. Buyer’s agents will request a copy of this form from the your agent before making an offer.

Lead-Based Paint Disclosure (Property built prior to 1978)
This form discloses to the buyer if the seller has any knowledge of lead-based paint in the property. The seller is also obligated to provide the buyer (usually via one of the agents) with a booklet that explains the hazards of lead-based paint.

Homeowner’s Or Condo Association Disclosures
These disclosures inform the buyer about the cost of your association dues and any special assessments that they may be liable to pay for. In the case of a condo resale the buyer is entitled to receive a copy of the condo documents to review and approve. They have the right to cancel a purchase contract if they do not agree to the terms and conditions within these documents.

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Check the Competition
Along with the sold and pending comps, make sure to look closely at similar properties that are for sale in your area. This is another clue to what your home is worth. However, you have to use a bit more caution with these properties because many times they are overpriced and so you won't want to use these as true comparisons. However, drive by these homes and see what your competition is doing. Find out how long they have been on the market. Market time can be an indicator to how a property is priced. A property on the market for 4 months in a hot market is probably priced too high. As always, consult with your agent. He or she will be able to guide you.

Market Conditions
Make sure you know which way the market is going. If the market is booming and good listings are scarce, you can probably price your home a bit higher than the last sale. If the market is slumping, prices could be softening and you should be very careful you don't overprice it and watch your home just sit there. Be sure to consult with your agent as to which way the market is heading. Markets are not static, they are usually moving one way or the other.

Overpricing Your Home
Pricing your home too high will result in little activity, a longer marketing period, and wasted time and energy. Sometimes sellers will calculate the improvements they spent on the home and add that to the equation. But remember that you usually don't get a dollar for dollar return on the money you invested in repairs or improvements. Sometimes sellers base an asking price on what another neighbor's house sold for but forget to take in to account that the neighbor's house had a larger lot, bigger square footage, and an extra bath. In my opinion, overpricing is usually the reason why a home doesn't sell. Many sellers refuse to lower their asking price, which results in no sale. Some sellers price their home based on what they need out of it. Buyers don't care what the sellers need out of the home, they base their decisions on what similar properties in the neighborhood have recently sold for. Remember this: Buyers typically look at every home in their price range and make comparisons between those houses. They will then narrow their choices to the homes that best fit their needs. They will then pick the home that they feel is the best value. If your home is overpriced and doesn't represent a fair value, buyers will pass on your home.

Under pricing Your Home
Sometimes a seller will under price a home. Sometimes it's to get a quick sale and sometimes it's an error when choosing the correct price. Maybe they hired an inexperienced agent or someone who doesn't know the area very well. Whatever the reason, an under priced home will usually result in a very rapid sale or in multiple offers. Remember buyers make comparisons and will generally choose the best value. If you do have multiple offers on your property and they are all full priced or higher, chances are you priced your home too low. The good news is that if you do have multiple offers, you can usually drive the price up as the buyers bid against each other. This may lead to a final selling price where it should be.
 

There are a wide variety of marketing alternatives available to sell your home. The most important and most effective is the MLS. When we meet to discuss the sale of your home we will discuss the alternatives and let you make the final decision on how you want to market your home. Remember, as with all our services you are free to pick and choose the services you want and need and pay for those services. We offer discounted service packages or a la carte pricing, check out our Profile of FRR Home-Seller Services page for more info.

Multiple Listing Service (MLS)
Most homes are bought and sold through real estate agents. The place the real estate agent get information about property for sale is through the local Multiple Listing Service. The MLS is the real agent's computerized database of all listed properties. It's where agents find homes to show buyers. It's also where they find sales comps which help a seller determine the sale price of their home and also helps a buyer determine what a fair offer price is for a home for sale. Agents can access property information from their home or office computer 24 hours a day. The MLS is the single most important and most effective marketing tool available. The vast majority of sales, some say 80% of sales, are a result of exposure to real estate agents through the MLS.

Professional Signage (where permissible)
Since buyers often drive around looking for signs, a visible sign is important. Our company uses professional signs. We can also use information boxes filled with brochures so that buyers driving past your home can stop their car and grab a flyer. We install or remove signs within 24 hours.

Tuesday Caravan
Think of Tuesday Caravan as an open house for Realtors. We can hold your home open for agent viewing on a scheduled Tuesday. This is an excellent way to expose your home to the most important group of individuals to know about your home, other real estate agents.

Internet Exposure- Virtual Tours
Many of today's tech-savvy buyers view homes on the web before starting their search. We can give your home maximum exposure on our web site at FloridaRebateRealty.com as well as other major sites such as Homeseekers.com, Realtor.com, Yahoo.com, HarmonHomes.com and others. We can post pictures of your home on our website or we can, through the latest software, provide a virtual tour of your home over the internet. Potential buyers can view your home inside and out, online. The web is increasing in importance in marketing real estate. Feel free to call or email us any Internet questions.

E-mail Marketing
A unique method of exposing your home is email marketing. When your home is listed, we send an e-mail message to our clients as well as other agents. Within the e-mail there is a link to our website where they can view photos and info about your home.

Showing Your Property
It is extremely important to make your home easily available for showing to agents and buyers. The easier it is to show the more people will see it and the faster it will sell. If you are not home regularly or the house is vacant we like to use an electronic lockbox so that agents can easily access the property. A lockbox is a secure way of providing entry to your home. Only licensed Realtors have access to the electronic keypad and the electronic lockbox records the identity of each visiting agent. If you are not comfortable using a lockbox we can make other arrangements to show your home.

Follow-up on Showings
We ask our clients to call us if they have any information that may be helpful. We can contact agents who have shown your home to get any meaningful feedback, which we will share with you.

Open House
Many think an open house is a good way to attract buyers. Most buyers who come to an open house are not qualified and probably can’t afford your home. Many are just looking or passing an afternoon. There may be times when an open house does make sense. For instance if there are a lot of requests to see your home it may be better to have an open house and tell everyone when the house will be available for showing.

Photographs
We can take a color photos of your home immediately to be used in advertising, brochures, the internet and on the MLS. Thanks to digital photography your pictures will be available immediately rather than in days. It would be a good idea to have your house ready both inside and out. For instance, make sure there are no cars in the driveway and the garage is closed and the yard manicured.

Custom Color Photo Brochure
We can prepare a custom color brochure. We would feature both exterior and interior shots as well as vital information buyers want to know. We want a buyer to receive a nice color information sheet so that he or she will remember your property. We also print the web site address of your listing on the flyer so that the buyer can log on from their computer to see additional photos and information about your property.

Print Advertising
There are many available newspapers and periodicals available to advertise your property. The Local newspapers offer a weekend photo display ads and classified ads. Most local community newspapers offer real estate advertising. Another periodical is the real estate publication "Harmon Homes" and "Homes Review". These free magazines are located on newspaper racks in convenience stores and markets. Properties and open houses can be advertised here with or without photos. When we meet to discuss listing your home, we will review the various print advertising options available.

Marketing Intangibles
Is your agent cooperative and helpful to other agents? Does your agent respond quickly to phone or email inquiries about your property? Can you communicate easily and quickly with your agent? Is he or she easy to reach? Does your agent screen himself behind voicemail or assistants? These intangibles can make the difference between an easy sale or a stressful sale.

Final Thoughts
Real estate marketing and sales is not that difficult. Price the property correctly, expose it to agents and qualified buyers, make it easy to view the property, and hire a competent professional agent to handle all of the contracts and negotiations. That's it. Sometimes Realtors make it seem much more complicated than it is.

WHILE YOUR HOME IS ON THE MARKET
Take care of your valuables
Exercise good common sense. Don't leave valuables or cash lying around your home. You never know who will come to view your home. There are times when buyers may ask to view your home on short notice and you will agree. In these situations you won’t have to worry about your valuables if you have already lock them up or hidden them. Most people aren't thieves, but why take a chance? If you have a lot of small valuables that can fit in a pocket or purse, hide them! Remember, in addition to agents and buyers walking through the property, you'll eventually have the termite man, an appraiser, home inspectors, and many others going through your home. Be safe and be smart.

Don’t Stay Around for Showings
If at all possible, leave when buyers come to look at your home. If this is not possible, then take the dog for a walk. It is very uncomfortable for the most buyers to view a home while the seller is looking over their shoulder. Most people buy a home when they get that certain gut feeling about a home. It's tough to get that feeling if the seller is hovering in the corner watching the buyer's every move. Another reason not to hang around is that buyers sometimes make remarks about your home that you may not want to hear. They may hate the wallpaper or window treatments or your taste in general.

Tenant occupied properties
If your property is tenant occupied, it can be more difficult to sell your home. Many times tenants are not cooperative when the house they're living in is for sale. You’ll need to talk with your tenants and ask that they cooperate with your agent to help sell your home. I will personally visit your tenants to seek there cooperation and listen to their needs and desires. I will get their agreement to a set of guidelines so that we can keep everyone happy. I always tell them that they will always have a 24 hour notice when there is a showing or any type of inspection. This will usually put most tenants at ease so we can move forward and sell the home. An important point to consider is that most buyers will ask that the property be vacant at the closing. You’ll need to give your tenants a 30 day notice and follow up to be sure they vacate the property or else your sale could fall through.

My Home is not Selling
If your home has not sold or you haven’t received a reasonable offer close to your asking price after 30 to 60 days on the market, your home is probably overpriced. This is assuming the market is normal and your home isn't located under power lines or next to a garbage dump. If your home is in a good location and there are no obvious defects, it's time to think about reducing the price. Remember buyers make comparisons between properties and choose the best value. Get your agents advice on the price. Your agent will most likely approach you about a price reduction and suggest a new price anyway. Ask your agent to pull the latest sales comps and see if there has been any recent sales or closings. Usually a slight reduction in price may be enough to get an offer on your home unless you overpriced the home significantly at the outset.

Receiving an offer
Sometimes the buyer's agent will want to present the offer to you in person, however in most cases the buyer's agent will fax or drop off the offer to your agent. The buyer's agent should have a pre-qualification letter or better yet a pre-approval letter from the buyer's lender along with the offer. At this point you will sit down with your agent to discuss the pros and cons of the offer. You can then come up with a strategy and then decide how to respond to the offer. I would advise against accepting offers without a pre-qualification or pre-approval from a lender.

Countering the offer
When you receive an offer on your home you have three options: Accept the offer, counter the offer, or reject the offer. Obviously if the offer price is acceptable to you and the terms are agreeable, you can go ahead and accept the offer. Perhaps there are a few minor things to change, but basically the offer is acceptable as written. If the price or the terms or both are not acceptable, but the offer is from a serious financially qualified buyer, you will probably want to counter the offer. Your agent will fill out the counter-offer form with the change of terms and price and will have you sign it. Many times the counter offer may be verbal or the original offer may be changed and initialed and sent back to the buyer’s agent. The counter offer process can go back and forth several times until a deal is reached or negotiations break off. Listen to your agent's recommendations and use your common sense and you should be able to come to an agreement with a reasonable buyer.

Low-ball offers
Do not become angry with a low-ball offer. If it is ridiculous you can reject it, but ask your agent’s advice. Many times the most qualified buyers will be the toughest negotiators. Many buyers will write low-ball offers just to start the ball rolling. It's your agent's job to work on the buyer to get them to come up. As always, rely on your agent's advice and experience. Some buyers just prefer to start the negotiations a little on the low side and then work their way up.

Pre-qualifying the buyer
You don't want to accept a contract from a buyer who may not get a loan. This can tie your property up for months and prevent you from selling your home. Your agent must contact the buyer's lender and request a pre-qualification letter. The buyer should have already filled out a loan application and had his credit report pulled. I always check the buyer's credit score, check his income-to-debt ratio, and verify that the buyer has the down payment funds available in his or her bank account. If these check out correctly, chances are that the buyer will get the loan.

Acceptance of the offer
Once all of the contracts, counter-offers, and addendums have been properly signed and initialed, the deal is accepted. After the contract is signed your agent must follow up to insure that all deposits are made in a timely manner and that the buyer gets a final loan approval within the stated timeframes in the contract. Also your agent must follow up and be sure that any remaining contingencies are cleared in a timely manner. Remember, at this point you have a legal obligation to sell the property to the buyer. No other buyer's offer can be accepted even if they submit a higher offer. Between this time and the closing you will have home inspectors, pest inspectors and home appraisers coming to look over your home.

Introduction
Although the buyer usually will have a home inspection done, I recommend to many clients that they go to the expense of having this done on their own. the reason being that you can take care of any problems and improve the marketability of your home. Another step that would improve the marketability of your home and protect you and the buyer is a Home Warranty. Ask us about details.

Any home, new or used, will have minor problems. For instance, an electrical outlet may not work, there may be a leaking faucet or maybe roof, one of the appliances may not work. The purpose of a home inspection is to insure that the buyer is aware of all problems and potential problems with a home before they buy. A seller is required in most cases to make the necessary repairs to insure everything is in working order. The buyer or their realtor should schedule a home inspection immediately after acceptance of an offer to purchase. The Florida Association of Realtors contract provides that this must be done within ten business days of the effective date. Basically the inspector will check the home from the roof to the foundation and everything in between. He will run the dishwasher, check the heating and cooling systems, check the plumbing, electrical, check for leaks, etc. He will give the buyer and/or the buyer’s agent a written report on the spot or fax or mail the report within 2 or 3 days. At the buyer’s or the buyer’s agent’s request the seller or seller’s agent will be given a copy of the report as well. The buyer may want or need to also have a separate roof inspection. If you are purchasing a home on the water, the buyer will want to have a seawall inspection done as well. (Damage to seawalls, docks and swimming pools are not covered by flood insurance.) If the buyer wants to have inspections for radon, lead-based paint, environmental hazards, etc. they will need to have these completed within the same period. Pest control inspections are generally not done until 30 days before closing, due to lender requirements. In many cases the home inspection company may be a licensed pest control company as well. It would not be prudent for a homebuyer to forego a home inspection before purchasing a home. Under Florida law the seller must disclose (seller’s disclosure) to the buyer all known facts that materially and adversely affect the value of the property being sold and that are not readily observable. The key word is known. Your agent should have you fill out this disclosure before you put your home on the market. There are often things wrong with your home that you may not know about. The home inspection checks the interior and exterior of the home, goes up into the attic space, and goes in the crawl space, if there is one. The price of a home inspection will vary with the size of home and with the amenities of the home (crawlspace, pool, etc.). Expect to pay anywhere from $250 to $500.

Seller Responsibility
The inspection is done to determine whether any warranted items are in need of repair. Generally the seller warrants that the structure (including roofs and pool) are structurally sound and are watertight, and that the appliances, heating, cooling, mechanical, electrical, security, sprinkler, plumbing systems, seawall, dock and pool equipment, if any, are in working condition and will be maintained in working condition until closing. The seller does not warrant and is not required to repair cosmetic conditions (unless the cosmetic condition resulted from a defect in a warranted item). Cosmetic conditions means aesthetic imperfections that do not affect the working condition of the item, such as tears, worn spots and discoloration of items such as floor coverings, wallpapers, window treatments; nail holes, scratches, dents, scrapes, chips and caulking in bathroom ceilings, walls, flooring, tile, fixtures, mirrors; tears or holes in screens; and minor cracks in windows, driveways, sidewalks, pool decks, garage and patio floors. The seller is not obligated to bring any items into compliance with existing building code regulations (unless necessary to repair a warranted item). Codes are constantly changing, and vary from one municipality to another. If the item was installed properly under the code existing at the time of installation no more can be required. The inspector will point out items that he recommends bringing to current code, such as GFI (ground fault interrupt) outlets, but this is a buyer option, not a seller requirement. Note that most contracts provide that a licensed contractor or repair person must do any repairs.

Items commonly noted in an inspection:

• Electrical panel: a fuse that is double lugged.
• Pool equipment and/or screen enclosure that needs to be grounded.
• Faucet that will not turn completely off.
• Outlet that does not have power.

Who pays for the inspection and how much does it cost?
The buyer pays for the home inspection. Most inspectors charge about $200 to $300 for a condo and about $250-$500 for a house. Of course larger properties with 2 or more stories, larger square footage, or older homes that are in very poor condition can be higher. Always describe the property accurately to the inspector in order to get an accurate price quote.

Is a Termite Inspection required?
A termite inspection is not always required. However, most of the time it is performed. One of the main reasons is that most lenders making the loan require a pest inspection and repairs if there is damage.

Who picks the Termite Inspector?
Generally the buyer (or the buyer's agent) picks the termite inspector since they will be paying for it. In many cases the company doing the inspection of the home may also be licensed to do the termite inspection.

Termite Inspection on condominiums or townhouses
The type of structure determines if an inspection is required. Typically the HOA (Homeowners Association) is responsible for termite issues in the common areas and exterior of your condo. It is fairly uncommon for a termite company to recommend tenting a condo building when a sale occurs. Usually the HOA will contract with a termite company for periodic inspections and maintenance. In most cases a termite inspection is not required for a condo. However, some lenders still may require a complete termite report and clearance for condos.

Introduction
Banks require an estimate of value prior to making a loan because they don't want to make a loan on a property worth less than the contract price. An appraiser is sent out to the property to appraise the property and make sure the value is in line with the sales price. Appraisers inspect and measure the property and check the sales comps in the immediate area.

What’s the cost and who pays?
The buyer usually pays for the appraisal unless the buyer has cut a special deal with the lender. Depending on the lender the appraisal may be paid in advance or incorporated into an application fee, some are COD, which means the buyer must write a check at the time of the appraisal and finally some lenders will bill the buyer at closing. An average appraisal is roughly $275-$600 depending on the size of the home.

Do you get a copy?
A seller will not get a copy of an appraisal ordered by the buyer through their mortgage lender. The buyer doesn't usually receive a copy unless specifically requested by the buyer and the copy is usually provided at the closing.

What if the appraisal comes in below the contract price?
If the appraisal comes in too low, it can be a problem. The appraiser is saying the property is not worth what the buyer agreed to pay for it. When this happens, usually both of the real estate agents will mobilize and scour the MLS for recent sales comps that the appraiser may have overlooked. Sometimes these comps can help change the appraiser's opinion of value and he will raise the appraisal price of the home. The agents will also look for properties in the MLS that are currently in a pending status to see if they can determine the contract sales price. If they can get this information it can usually be used to help the appraiser raise his estimate of value. Usually, most appraisals can be readjusted higher with a little bit of legwork. If the final appraisal is below the contract sales price the buyer has the option of canceling the contract or paying the difference out of pocket.

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Introduction
With few exceptions, a home represents the largest single investment most people will make in their lifetime. Thus, it is only natural that an owner will want to make that investment secure by protecting the basic proof of ownership. Title insurance is the most effective and least expensive way of doing just that. Title insurance is issued by a title company or title attorney. Title agents not only issue the policy they also conduct the closing process. Lender's require title insurance.

Most people don’t really know what is involved in the closing process. The closing process is where all funds are disbursed, closing paperwork is prepared, title deeds are prepared and notarized. The closing is usually handled by a title company or a title attorney. Among their many responsibilities are:

• Cashing the buyer's deposit check and holding the money in the escrow trust account.

• Coordinating paperwork between the parties, agents, lender, title, insurance.

• Preparing and notarizing deeds and documents.

• Coordinating the funding of the loan.

• Paying off the seller's loan.

• Preparing the HUD-1 closing cost settlement statement for all the parties.

• Disbursing the sellers check and the agent's commissions.

• Prorating the annual property taxes and any other obligations

This is just a brief overview of the many responsibilities that the closing agent performs.

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What is a Title?
A title is the evidence or right that a person has to the ownership and possession of land. A defect in that title can be any legal right held by someone other than the owner to claim property or to make demands on the owner of that property.

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What is an Abstract?
An abstract is a history of the title to a particular tract of land. It is not a title! It consists of a summary of the material parts of recorded instruments affecting the title of the real estate. The abstract may be correct but the title imperfect. The abstract is not a guarantee. It is only a record of what has been recorded. It does not judge the correctness of any item it lists. It merely reports them for an examiner to interpret. Abstracts are not used in real estate transactions in many parts of the country.

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What can make a Title defective?
There are many possible causes of title defects that no examination can disclose. That is because they have never been recorded and thus do not appear in the abstract. A title insurance policy protects the owner against all of the hidden risks listed below, and many more:

• Fraud- False claims of ownership, forged deeds, wills, signatures, conveyances, instruments, false representations, false records of all sorts, illegal acts of trustees, guardians, administrators, and attorneys.

• Human error- Errors in copying, indexing, recording; errors by administrators, executors, trustees, guardians and attorneys; destruction of records.

• Improper deeds and wills- Deeds by persons of unsound mind, minors; deeds delivered after death or without the grantor's consent; invalid, suppressed, erroneous wills, missing heirs, unsettled estates.

• Liens and other rights- Liens for unpaid estate, inheritance, income, property and gift taxes; homestead rights, community property rights; irregular court proceedings, court opinion reversals, lack of court jurisdiction; defective foreclosures.

What is Title Insurance?
Title insurance is a contract to protect an owner against losses arising through defects in the title to real estate owned. If the title is insurable, the company guarantees the owner against loss due to any defect in title or expenses in legal defense of the title pursuant to the terms of the policy.

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Owner's Policies and Lender's Policies.
A lender will often require a title policy for their protection alone. Such a policy does not protect the owner. To protect themselves against possible title defects, an owner should purchase an owner's title insurance policy on the property.

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Why buy Title Insurance?
When a person buys a car or consumer goods, they seldom need to know whether the former owner is married, single, or divorced; whether they have paid their taxes or are involved in a lawsuit. But when a person buys a home, it is necessary to have all of that information and much more. For while he or she may own the property, others may also have rights in that same real estate.

A competent investigation can uncover such items as unpaid taxes, easements, restrictions and more. However, all items affecting the title are not contained in a single book, in a single office, or even in the same city. Then, add to this the possibility of human error at a multiplicity of points. Yet what is not in the public records often causes title problems. For all these reasons and many more, a property owner needs the protection afforded by title insurance.

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What does Title Insurance Cost?
The cost is directly related to the value of the property. The higher its value, the more coverage is needed. The premium is small compared to the total purchase price. The premium is paid only once and remains in force for as long as the property is owned by the insured and continues to protect the insured on warranties after it is sold. Generally, in Florida the cost of an owners title insurance policy is $575 on the first $100,000 and $500 per $100,000 thereafter. This is the minimum cost according to Florida law. For example on a property valued at $150,000 the title insurance would cost $575 + $250 for a total of $825. Please be advised these are estimates and that the actual cost may be somewhat higher depending on the title agent. The cost for an lender’s title insurance policy which is to insure the lender is usually a nominal fee.

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Preliminary Title Report (Prelim)
Once the earnest money contract is signed by both buyer and seller, a commitment for an owner’s title insurance policy should be ordered. This commitment will be based upon a search of the public records. A preliminary title report issued by the Title Insurance Company that tells a buyer several things about the property. It tells you what liens are on the property such as the seller's current loan(s), state or IRS tax liens, or back property taxes. The prelim also notifies a buyer about any easements on the property. An easement is basically a right for someone else to use a portion of your land. For example, utility easements give the right to the Telephone Company to have telephone poles in your yard or cable companies to run cable under your property. The prelim will disclose those liens, defects or encumbrances that will be exceptions to coverage on the policy unless removed. Such a search will allow the purchaser to understand the manner in which the title company is willing to insure the condition of title and to insist upon the seller providing clear title to the property before exchanging the sales' proceeds for the transfer deed. Once this exchange is made and the transfer documents are recorded, the owner's policy will be issued, insuring the buyer against loss due to any undisclosed claim covered by his or her policy. If you have any questions, always make sure to ask the title officer assigned to the file to interpret the findings and make recommendations.

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Who Pays for Title Insurance?
There are two title policies that must be purchased in a real estate transaction (except cash transactions). One is the owner's (buyer's) policy and one is the lenders policy. Generally, in Palm Beach County the seller pays for the policy that insures the buyer whereas in Broward County the buyer pays. The buyer pays for the policy that insures the lender in both counties.

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Who Picks the Title Insurance Company?
In Palm Beach County, the seller usually through their agent will pick the title insurance company whereas in Broward County the buyer, usually through their agent will decide. Most title companies provide adequate service, however charges can vary significantly. Consult your agent or call a title rep for more information.

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Introduction
The buyer's walk through prior to the closing is to verify the repairs (if any) have been done in a professional manner and to be sure the tenants, if any are out of the property. Also buyers will check that the seller has not removed any fixtures that are included in the sale like draperies or light fixtures.

When is the walk through done?
The final walk through is done prior closing, usually the day before or even right before closing. If there is concern about the condition of the home or quality of repairs, if any, then a walk through may be scheduled much earlier.

Something is missing
Many times a seller will remove something like a light fixture or fan. This will get a buyer very upset. To avoid this situation, any items or fixtures that are unique or of special interest that you will be removing should be noted prior to listing your home. When accepting an offer be sure to check out what personal items the buyers have listed in the contract to avoid confusion later.

Arguments over repairs
Arguments over the quality of repairs are not uncommon. Put yourself in the buyer’s shoes. I suggest that sellers either have any repairs done by a professional or offer a discount to the buyers in lieu of the repairs. The best advice is to have your own home inspection performed prior to listing your home and have the necessary repairs done at that time.

Tenants in the property
No one wants to inherit someone else's tenants. You should insure that any tenants are out of the property or preparing to leave by the time of the final walk through. Don’t wait till the last minute to take care of this matter. Sometimes a small cash inducement to the tenants to leave promptly works wonders.

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Final Loan Approval
The buyer’s loan is approved. However, sometimes there are conditions that need to be cleared up before the lender funds the loan. They may want another explanation letter for something or they may want a correction on a document. Whatever the case, the title agent, the mortgage broker, or the buyer’s agent will work to solve these conditions. They are usually just minor items that need attention, but talk to your agent if you have any questions or concerns.

The Estimated Closing Cost Settlement Statement (HUD-1)
Prior to closing you should get (or ask for) the estimated closing cost settlement statement from the title company. Look at the seller charges and make sure they look correct. If you have any questions, ask your agent or the title agent to explain them. Many times the HUD-1 is not ready until shortly before the close for various reasons. There is no need to worry. You can’t close without this statement and all parties will review the statement at the closing. If there are any mistakes they can be easily corrected on the spot.

Funding the Loan
At this point the lender has already wired the funds into the title company’s bank account. Once everything has been signed and sealed the title company will disburse checks to all the interested parties to the transaction (seller, loan officer and your real estate agent).

Recording the Deeds
The title company will take the deeds to the county recorder to record all of the documents. You will receive copies of all the documents you signed at the closing.

Canceling the utilities in your name
Don't forget to cancel the utilities in your name. I usually recommend making the changes 2 or 3 days before the actual close. Your agent should have all of the utility company phone numbers. Click here for utility company phone numbers and other useful phone numbers. Also check out Useful Links for more information.