FAQ

Get a basic understanding of the closing process, dispel myths, and know what to expect every step of the way.

What is a closing?

This is the time and place agreed upon by all parties for the final documents to be signed to complete the real estate transaction, where all funds are paid by Buyer and distributed to realtors and Seller, and where the Buyer receives the keys to the property.

Why do we need a settlement company?

The settlement company is charged with searching the title to the property, assuring that all taxes and liens and mortgages are paid in full, collecting and disbursing funds and assuring that the recording of all documents such as deeds and mortgage is performed correctly and timely.

Why do I need to complete the Buyer/Seller Questionnaire?

This questionnaire reflects all of the information necessary for Settlements, Ltd. to prepare for closing. Timely completion of this questionnaire and submission of all requested documents will make sure the closing occurs in a timely and efficient manner. This will also mean fewer demands on your time by Settlements, Ltd. for information.

What fees does Settlements, Ltd. charge?

The fees the Buyer pays Settlements, Ltd. will be a document preparation fee of $195, notary fees of $30, printing/handling fees of $100 when your lender delivers your documents electronically, next day delivery fees to return your bank package to your lender of $25, and a wire fee of $22 for your lender to wire the loan amount.
We do not charge a settlement or closing fee to the buyer because under Pennsylvania title insurance regulations, the settlement or closing fee is a part of your title insurance charge. You must be given the opportunity to meet in the closing company’s office during normal business hours which will waive the settlement or closing fee. The closing company must disclose this in writing to you. Settlements, Ltd. will, however, close in your realtor’s office or some other location convenient to you without imposing this charge.

 

Settlements, Ltd. charges the Seller a settlement or closing fee of $225 and document preparation/notary fees of $225. Overnight fees for delivery of documents and payoffs average approximately $20.

Why do you need to know if I am attending closing?

If you are not attending closing, documents must be prepared in advance and sent or e mailed to you. These documents will require notarization, and the original documents will need to be returned to the Settlements, Ltd. prior to closing.

See “Remote Notary Services

 

What do I need to bring to closing?

Original, government-issued photo identification, certified funds made payable in the amount specified by and made payable to Settlements, Ltd., repair work and paid invoices to meet inspection requirements, keys, garage door openers, any paperwork requested by the Buyer’s lender or Settlements, Ltd.

What do I need to do if I am not attending closing?

Inform Settlements, Ltd. immediately and make sure you have access to a notary. If you are out of the country, you may need to make arrangements with the nearest US Embassy or Consulate for the proper notarization of your closing documents.

See “Remote Notary Services

Why do you need the original of my Power of Attorney?

In order to utilize a Power of Attorney at a real estate closing, it must be recorded. The Department of Real Estate will only record an original, not a copy.

How do I know how much money to bring to closing?

Your lender will provide a closing disclosure to you three days in advance of closing. Your Loan Officer will review the fees with you upon request.

How is the hand money treated?

The hand money is generally held by the Buyer’s realtor and then credited to the Buyer at the time of closing. If there is no realtor, Settlements, Ltd. or an attorney for the Buyer or Seller can hold the hand money.

What are transfer taxes?

A tax payable to the Commonwealth of PA and the local government and school district where your property is located. See the link for a calculation of transfer tax amounts.

What is the proration of real estate taxes and what is the difference between a “calendar year” tax and a “fiscal year” tax?

Pro-rations are items being given to or deducted from the Seller depending on whether or not the Seller has already paid various real estate property tax bills. Local and County taxes are based on a calendar year (January 1 – December 31) billing regardless of when the bill is issued or paid. If the Seller has already paid for those taxes, the Seller will be reimbursed from the date of closing to the end of the year.

 

In the City of Pittsburgh, School taxes are the same as above. In the suburbs, however, under Pennsylvania statute, school districts run on a fiscal year basis which is from July 1 through June 30th of the following year (think of the way children attend school). If the Seller paid his school tax in 2015 and you are closing in June 30, 2016, the Buyer will owe the Seller a reimbursement through from the date of closing through June 30, 2016. Any taxes reimbursed to the Seller at closing will be income tax deductions to the Buyer when filing the next federal income tax return.

 

When the Seller has not yet paid the tax bill, the Buyer is credited the appropriate amount of time from the beginning of the year to the date of closing. For local and county taxes and City of Pittsburgh school taxes, that will be based on a calendar year. Remember, however, the difference for school taxes which are based on a fiscal year. The unpaid school taxes will be prorated from June 30 of the year of closing until the closing date. For instance if you close August 30, 2016 and the Seller has not paid the school taxes, the Buyer will receive a pro-rated credit of the amount of the school tax from June 30, 2016 through August 30, 2016.

To whom do I make the closing cost check payable?

Settlements, Ltd.

What if I want to wire you the closing costs?

You may do so. Please call our office for wiring instructions, 412-922-6095.
How will I receive my proceeds from the sale of the property?
You will receive an attorney’s escrow check at the closing table.

What if I want my proceeds wired?

Settlements, Ltd. can wire funds to you. You must provide the name and address of the bank to which the funds are to be wired, the ABA or routing number of the bank, the name and address on the account to which the funds are to be credited and your account number. You must also provide a telephone number where you can be reached on the day of closing to confirm the wire instructions. We strongly urge you to check with your bank to ascertain that you are providing the correct information for incoming wires. Information on your checks is not always reliable.

Why do you need our social security numbers?

All settlement companies are required to check support obligations in the Commonwealth of Pennsylvania on certain individuals, to provide the IRS with 1099 reporting information in certain cases and to clear matters of title such as judgments, etc. We also need the social security numbers of the Seller in order to obtain mortgage payoff information.

Why do I need a survey?

A survey can provide valuable information about the property you are purchasing.
What is the difference between a staked and an unstaked survey?
A staked survey actually has markers placed on the ground when the survey is completed. An unstaked survey is a drawing of the property with no markers on the ground. There is a difference in cost.

Where and when will my closing take place?

At the time and place selected by the Buyer, Seller, the realtors and the parties’ attorneys, if any. Remember that while many closing companies charge for attending the closing outside their own offices or in the evening or weekends, Settlements, Ltd. does not charge for this service.

Do I need to bring an attorney?

You may prefer to have your own attorney represent you at closing. Most Buyers and Sellers do not retain the services of outside counsel but that is a decision only you can make. Settlements, Ltd. does not represent the Buyer, Seller or realtors but rather the title insurance company to make sure that the process is handled correctly and clear title is conveyed.

Why do you need my old deed if we are selling?

It provides a reference point for our title searcher. It also enables Settlements, Ltd. to quickly ascertain that all parties necessary to the Agreement of Sale have executed that document.

Why does the Agreement of Sale specify a “special” warranty deed and what does that mean?

Special Warranty Deed – warrants that the seller has not impaired the title during his ownership.  It does not contain a warranty against defects or claims against the property that arose prior to seller’s ownership nor does it obligate the seller to do anything further once title is transferred to buyer. This is the default type of deed specified in our Agreement of Sale.

Who prepares the new deed?

Settlements, Ltd. will prepare the new deed or the Seller may have an attorney or his choosing prepare the new deed.

Why do you need my owner’s title insurance policy?

If there is a matter requiring title clearance, for instance, a mortgage or judgment that was paid off but has not been properly satisfied in the public records, your title insurance company will handle that free of charge to you. Your title insurance company will require proof of your title insurance in order to do so.

What are no lien letters and who pays for them?

These are documents that the seller is required to provide in order to sell a piece of real estate. They include but are not limited to dye tests, letter that indicating the status of any outstanding municipal claims on the property, tax certifications to prove that property taxes are paid in full, zoning or occupancy certifications and wage tax forms. The seller is responsible for paying for these documents. Settlements, Ltd. will order these documents and pay for them in advance. The seller will reimburse Settlements, Ltd. at closing for these costs.

What is an escrow account?

There are two different kinds of escrow accounts. One is an escrow account established by the Buyer’s lender for upcoming taxes and insurances.

 

The other type of escrow is an escrow account which may be held by Settlements, Ltd. to guarantee payment of repairs or final water/sewage bills.

How do I get my money back from an escrow held at closing?

If an escrow is for final water/sewage, you will provide the final invoices or proof of payment of the final water/sewage bills to Settlements, Ltd. for return of the escrowed money. If the escrow if for the guarantee of a repair, radon remediation, etc. both Buyer and Seller will sign a release agreeing to the release of the escrowed amount.

What is a dye test?

A check to ascertain whether or not there is commingling of the sanitation and storm water drains now required by most municipalities before a property can be sold or refinanced. If there is commingling, the sanitation lines must be separated from the storm water drains before the property can be sold or refinanced. This is the responsibility of the Seller.

As the seller, what do I do with bills that I receive after the closing?

Final utility bills such as electric, gas, telephone, cable, etc. are your responsibility. You should have final readings done by the utility company and have final bills forwarded to your new address. Certain utility bills are “lienable” items, i.e., the utility company can place a lien on the property for nonpayment. Settlements, Ltd. will normally establish an escrow at closing for the payment of these types of bills. You will provide the final bill to Settlements, Ltd. for payment out of the established escrow, and the balance will then be returned to you.

As the seller, how do I know my mortgage has been paid?

You can check with your mortgage company two days after closing to ascertain that it has received your payoff funds. The escrow account for your taxes and insurance will generally be disbursed by the mortgage company to you approximately two weeks after receipt of the payoff funds. Settlements, Ltd. has no control over these funds. The documents you signed at your closing when you purchased the house like the deed and mortgage will generally be returned to you approximately six months after closing. Again, Settlements, Ltd. has no control over these documents.

When can the Buyer move into the property?

After closing when the Buyer has paid all fees owed, when the Buyer’s mortgage lender has funded his loan and the Seller has executed and delivered the deed and keys.

Why does the HUD 1 say “Borrower” when I am paying cash for my property?

If you are purchasing your property with cash and not financing with a loan, the HUD 1 will still refer to you as “Borrower.” This is the way the government form was drafted and it cannot be modified.