Whether representing a buyer or seller, there are several regional differences to be aware of when working with a title company that is not based in Lancaster County. If your listing is sold by an agent based in another county, there is a good chance the title company selected by the buyer will also be based in another county. If your buyer is working with a lender from out of the county or even out of the state, there is potential for them to refer a title company based outside of Lancaster County.
Per the Standard Agreement for the Sale of Real Estate, Section 4 (B) Settlement will occur in the county where the Property is located or in an adjacent county, during normal business hours, unless Buyer and Seller agree otherwise.
Be prepared to travel to an adjacent county for settlement, because this is within the terms of the agreement. If you are representing the buyer and you request that an out-of-area title company hold settlement in Lancaster County, be prepared for a fee to be charged to the buyer for a witness closer. In this case the out-of-area title company will hire a local title company to hold settlement; or the title company may travel to Lancaster County and expect you, the agent, to provide the notary. It will save you a lot of last minute stress if you ask questions of the title company prior to settlement and address their fees and process. Get settlement scheduled as soon as you can to trigger some of these questions.
Out-of-area title companies may not be aware of the nuances of ordering finals in Lancaster County. For example, they may not realize that Lancaster City will not release the final water bill without the Smoke Detector Certification. These title companies may wait too long to order finals which can delay settlement. One strategy for making sure they are on track to close on time is to request the seller’s CD more than a week prior to settlement. This will give you an opportunity to ask questions if you don’t see the customary fees on the CD.
Chester County Real Estate Brokerages typically have a conveyancer. What is a conveyancer? The conveyancer prepares the deed, orders loan payoffs, orders finals (water, sewer, trash) and orders tax certifications. These services are customarily provided by the title company in Lancaster County. If you are working with a Chester County title company, they will ask you to provide the deed, loan payoff, etc. Without a conveyancer they will likely charge your seller a fee for these services, in addition to the actual costs for finals and certifications. You may remind this title company that the property in question is within Lancaster County and you expect them to adhere to customary practices in Lancaster County . . . some will, and some won’t. In addition they may require you and your client to provide all certs, payoffs, deed and finals. If this is the case, you may be able to pay for these services from a Lancaster County title company. Worse than this is the out-of-town title company that shows up to settlement and asks you for the first time for the deed, payoffs, tax certs and finals. This leaves you scrambling for the items, and it will likely cause a delay in settlement.
Buyer agents should be aware that lenders based in a state outside of Pennsylvania may not understand how our real estate taxes are calculated or when they are paid. They may not know what transfer tax to use. If these items aren’t calculated correctly when the buyer makes their loan application, the error may not be caught until the CD is prepared. The buyer may be blindsided with a much larger amount due at closing. Additionally, title insurance varies from state to state. Out-of-state lenders may not quote the owner’s title insurance policy for the buyer. This may be presented to the buyer as a savings in closing costs, but then the buyer is left with no title insurance. The best way to make sure the out-of-area lender is on track with the correct real estate taxes, transfer tax and title insurance is to create a closing cost estimate and compare it with the lender’s when writing the offer.
Who pays for the deed? It is customary for the seller to pay for the deed preparation in most counties in Pennsylvania; however, this is not the case in Lancaster County. When you are representing the seller, make sure there is not a charge for the deed preparation on the CD or HUD-1. However, if you are listing a property outside of Lancaster County, be prepared for this fee to be charged to your seller.
The bottom line is don’t make any assumptions about where settlement will take place and what services the title company will provide. Ask questions and request the CD or HUD-1 in advance of settlement to review fees and to make sure all loan payoffs, certifications and finals are included. Make sure there are not additional fees charged that are not customary in Lancaster County.
Lisa Naples, Berkshire Hathaway HomeServices HomeSale Realty
Facts, opinions and information expressed in the Closing Comments Blog represent the work of the author and are believed to be accurate, but are not guaranteed. The Lancaster County Association of Realtors® is not liable for any potential errors, omissions or outdated information. If errors are noted within a post, please notify the Association. Posts represent the author’s opinion and are not necessarily the opinion of the Association.