In this article, you can discover:
- The difference between a title company and a closing company.
- The benefits of hiring a title attorney to purchase or sell a property.
- How escrow funds work during the purchase and selling of property.
Is A Title Company The Same As A Closing Company In Florida?
In Florida, a title company is essentially the same as a closing company. However, we always recommend that you use an attorney as your closing agent because they can advise you on certain things that non-attorney closing agents cannot. This includes giving you specific guidance regarding the contract and any applicable rules or regulations that will come into play for a particular property.
What Are The Benefits Of Hiring An Attorney To Handle Escrow And Closing On A Real Estate Transaction In Miami-Dade County?
Attorneys have a higher level of fiduciary duty than other real estate professionals. What’s more, they are regulated by the Florida bar and have strict non-commingling rules.
These responsibilities are something that an attorney takes very seriously. As a result, you can be sure that your attorney will work to your best interest no matter what comes your way.
What Does A Home Buyer Need To Understand About The Escrow Funds?
Escrow funds are typically the down payment or the holding money that is given to a fiduciary, (in this case, the title attorney or the closing agent), as kind of a “good-faith” down payment to a third party that’s going to help with the purchase of the property. These funds are also called earnest money.
How Does Escrow Protect The Buyer?
The buyer’s funds are put into escrow and act as a good-faith payment. It reflects the buyer’s seriousness in a transaction. It also provides some comfort to the seller because typically, once a certain date within the contract is passed, the escrow money will transfer into ownership. After a certain length of time, this money becomes a non-refundable down payment.
Who Owns The Money In An Escrow Account?
The property buyer puts the money into the escrow account. At this stage, it is still the buyer’s money – but after a certain date, (depending on what is stated in the contract for sale), the money will become a non-refundable down payment. Therefore, the buyer cannot cancel the contract. That money now belongs to the seller either for the continued sale of the property or as a penalty for the buyer backing out of the purchase past the cancellation deadline.
Is The Good-Faith Down Payment Usually A Percentage Of The Amount?
The good-faith down payment is always agreed upon in the contract. It may or may not be a percentage of the dollar amount to purchase the property. The amount is always clearly stated in the contract.
How Long Can Escrows Hold Funds?
The fiduciary, which can be the title company, the closing company, or more preferably the title attorney, will hold the funds for as long as needed. If the rightful owner asks for the return of the funds, or if there’s a dispute, the fiduciary can hold on to them until it is determined who is entitled to the money.
Can An Attorney Use The Money In An Escrow Account?
The money in an escrow account cannot be used by either the buyer or seller’s attorney as this constitutes a breach of fiduciary duty. Escrow accounts are separate from law firm accounts and they cannot be co-mingled as this is a violation of the Florida bar.
When Will The Escrow Fund Be Used?
The escrow fund would likely be transferred to the seller at the time of closing or transferred to pay off whatever debt the seller may have. If the seller still has to pay off a mortgage, they direct the fiduciary to send the amount in escrow to help pay off the outstanding mortgage. But at disbursement time, after everything is signed and done, the escrow agent will properly disperse all money.
With the guidance of a skilled attorney for Real Estate Law Cases, you can have the peace of mind that comes with knowing that we’ll make it look easy.
For more information on Real Estate Law in Florida, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (305) 335-3407 today.
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