Buyer’s Closing Costs – Typically, the buyer is responsible for paying the costs associated with obtaining financing, the title insurance premiums and costs, hazard Insurance premiums, recording fees for the deed and mortgage(s), survey costs, transfer taxes and a settlement fee.  Buyer must also provide the seller with a credit for the taxes the seller paid for the time period the buyer will own the real property.

Closing Coordinator – An employee of a title insurance company or lender that compiles all of the information needed to reach settlement.

Closing Officer – An employee of the title company or lender who attends the settlement and explains the documents to both the buyer and seller before the documents are executed.

Deed – The document that transfers title to the real property from the seller to the buyer.  The deed is recorded in the Office of the Recorder of Deed in the county where the property is located.

Disbursement – Once the settlement is complete, the closing coordinator will make all of the payments needed to remove any liens from the property.

Escrow – An account established to hold the hand money until the settlement. Most escrow accounts are non-interest bearing.

Hand Money – Money paid from the buyer of real property to the seller to discontinue showing the real property and to show buyer’s intent to purchase the property.  The hand money is deducted from the proceeds due to the seller at settlement.

Lien Letters – Title insurance companies require proof that all water, sewer, taxes and municipal claims are paid current.  The closing coordinator will order a letter from the appropriate parties to confirm that all outstanding payments have been made.  The cost of these letters will be charged to the seller at closing. If there are any open balances, these amounts will be collected at closing and paid when the sale is disbursed. 

Real Property – Land and anything permanently attached thereto.  This includes, buildings, fences, trees, minerals (except in Western Pennsylvania) and air space. 

Real Estate Settlement Procedures Act (“RESPA”) – A federal law that requires lenders and closing companies to provide a borrower with information regarding the closing costs before settlement.  RESPA also gives buyer the right to choose their title insurance company and prohibits kickbacks in the real estate business.

Seller’s Closing Costs – Typically the seller is responsible for paying for preparation of the deed, costs associated with clearing the title (i.e. – the cost of any certifications required by the title insurance company, mortgage payoffs, real property taxes, any item found as a lien against the real property and a settlement fee.

Seller’s Disclosure – A form that a seller provides to a buyer that contains several items that the seller is required to disclose by Pennsylvania Statue 68 P.S. 1021, et seq. If a seller provides inaccurate information on the disclosure or fails to provide the buyer with this disclosure, the seller may be held liable for the costs associated with repairing an undisclosed defect.

Settlement – This is when the buyer and seller complete the transaction.  The buyer pays the purchase price and the seller delivers the deed to the property.  Actual ownership of the property is transferred at this time.

Title Insurance Company – A company that will provide a buyer/lender with a title insurance policy.  The company will work with the buyer and seller to obtain payoff information, lien letters and perform the settlement. 

Title Insurance Premium – Pennsylvania title insurance companies all charge the same rate for a title insurance policy.  These rates are filed with the Pennsylvania Department of Insurance. 

Transfer Taxes – Taxes that are required to be paid at the time the deed is placed of record in the county where the property is located.  The state transfer tax is 1 percent of the purchase price.  The local transfer tax, which includes both a tax imposed by the municipality and the school district, can vary.  Most local transfer taxes are 1 percent but can be as much as 2 ¾ percent of the purchase price.