Successfully and safely completing any type of real estate transaction requires taking steps to protect all parties. Funds involved in the transaction are placed in escrow until the deal has fully closed. Title insurance is typically purchased by the buyer to cover any title defects or encumbrances.
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Our Miami title insurance and escrow services can help you navigate residential and commercial real estate closings with confidence. Our attorneys at Perez Abello Law have over 20 years of combined legal experience and can provide you with tailored guidance when you are looking to manage complex real estate deals in South Florida. We understand what is at stake and will work to ensure your interests are protected at every stage of your transaction.
What Is Escrow and How Does It Work?
Real estate transactions are generally high-stakes affairs given the amount of money changing hands. For first-time homeowners, a real estate purchase may represent their largest investment to date.
When purchasing real estate property, you need to show the seller that you are serious. However, you cannot simply transfer a huge sum before all of the legal details have been worked out and executed. In real estate, escrow is an arrangement that authorizes a third party to hold funds involved in the transaction until the purchase agreement has been fully executed.
Most purchase agreements will choose to involve escrow for the benefit of all parties. Once a purchase agreement has been introduced, an escrow account will be created. The buyer will transfer an agreed-upon sum into the escrow account – which functions as a show of good faith – where it will remain until the transaction closes.
If the buyer causes the deal to fall apart, the seller may sometimes keep some or all of the escrow funds. These conditions and details should be explicitly outlined in the purchase agreement.
If the transaction does close, the funds placed in escrow will be “released” and applied to the property’s down payment. Some funds can potentially be “held back” if the buyer discovers previously undisclosed problems but still wishes to close the deal.
Our lawyers can function as your third party and manage your escrow account in residential and commercial real estate transactions. We have substantial experience handling escrow deposits and can leverage our knowledge of the process to protect your interests.
Why Do I Need Title Insurance?
Performing a thorough title search is an important step of any real estate closing process. A title search evaluates available public records and verifies ownership of the property. It also checks for liens, claims, judgments, and other encumbrances.
When you purchase a property, you must ensure your ownership of that property is indisputable. This involves checking the property’s title for defects and encumbrances. Having a “clean title” means the property is free from issues that could imperil ownership. You know exactly who owns the property (the seller), and therefore you can safely purchase the property from them and assume legal ownership.
Ideally, you will be able to resolve all potential title issues before the transaction closes. However, even with a clean title, a title defect or encumbrance could appear at some point in the future, well after the transaction has been completed. Keep in mind that the current owner and seller may not be aware of certain issues that may at some point encumber the property, and mistakes do happen with public recordkeeping. Title insurance is designed to protect you from financial losses in these scenarios.
In the state of Florida, you will most likely be required to obtain a title insurance policy if you are purchasing the property with the assistance of a financed loan. Most lending institutions will mandate title insurance to protect their involvement in the transaction, and buyers are expected to foot the bill.
Fortunately, title insurance only requires a one-time premium that is often built into closing costs. You will not need to pay month-to-month premiums.
It is generally wise to also purchase an owner’s title insurance policy, which is distinct from a lender’s policy. Your lender will only be looking out for themselves when requiring title insurance. Should a defect of encumbrance appear and jeopardize your ownership of a property, the lender’s title insurance will generally only insulate the lender – not you.
By purchasing owner’s title insurance, you protect yourself from many unforeseeable issues that could nevertheless potentially arise and threaten your ownership. Without a robust title insurance policy, you can potentially lose the property and the money you have spent on it. If a legitimate claim is filed against the property, the owner’s title insurance can help cover the resulting financial and legal consequences and protect your investment.
Our Miami title insurance and escrow services can help protect you from many types of encumbrances and issues, including:
- Undisclosed heirs
- Mistakes in recordkeeping
- Fraudulent misconduct
- Unpaid judgments
- Unpaid liens
- Unpaid taxes
Our attorneys at Perez Abello Law offer comprehensive title insurance assistance in residential and commercial real estate transactions. We can assess the property involved in your transaction and advise what types of title insurance you will likely need. We have substantial experience conducting thorough title examinations and can identify potential title clouds. Our team can then prepare title insurance commitments and verify that they will offer sufficient protection in a wide variety of scenarios.
Our Miami title insurance and escrow services are designed to protect your interests at every stage of your real estate transaction. Our firm regularly works with first-time home buyers, seasoned real estate investors, developers, entrepreneurs, and businesses. We will work to understand your unique objectives and are committed to delivering tailored, cost-effective legal solutions.