Closing agent or settlement agent: A settlement agent (also called a “closing agent”) handles the real estate transaction when you buy, sell, or refinance a property.   He or she oversees title searches, legal documents, fee payments, and other details of transferring property, acting on your behalf to ensure that the conditions of the contract have been met and all lienable payments have been satisfied.

Technically, closing costs are only those fees and expenses necessary to close a sale or a mortgage, such as document preparation, the fee for the actual closing itself and perhaps overnight delivery charges. However, the phrase has come to mean all expenses associated with a closing with the exception of the actual purchase price of the property and any lender fees. Potential expenses might include

• Preparation of closing documents
• Expenses associated with clearing title defects, such as preparation of affidavits or quit-claim deeds
• Title insurance
• Lender-required policy endorsements
• Lender closing protection Letter
• Any points (up-front interest charges) you have agreed to pay the lender
• Deed recording fees
• Mortgage recording fees
• Transfer taxes
• Transfer fees imposed by condos, homeowners associations or co-op boards
• Listing agent’s commission
• Cost of wood infestation report and clearance letter
• Cost of survey
• Cost of appraisal
• Cost of required inspections
• Escrow fees
• Document delivery charges
• Attorneys’ or settlement agent’s fees
• Pro-rated real estate taxes, insurance and/or dues

The lender must give you a good faith estimate, included in the loan estimate (LE), of your closing costs before the closing date so you’ll know approximately how much money you need to have available at closing—usually 5% to 10% of your mortgage. Many closing costs are tax deductible, so it’s a good idea to consult with your tax adviser.

Closing disclosure: This five-page document replaces the old HUD-1 form for residential transactions that involve borrowing money from a lender. The closing disclosure details all of the costs associated with your mortgage transaction. By law, this form must be received by you three days business days before your settlement and by design is in the same format as the loan estimate you were given after applying for your mortgage. Review the closing disclosure carefully upon receipt and compare it to your loan estimate to make sure all numbers meet your expectations. Contact your lender during the three-day period before closing if you have questions or find an error on the statement so it can be resolved before settlement.

Promissory note: A written promise to pay back the amount you’re borrowing; it lists the loan’s terms, such as length of time to repay the loan, interest rate and any penalties and interest if payments are missed.

Title: The rights of ownership recognized and protected by the law. A combination of all the elements that constitute the highest legal right to own, possess, use, control, enjoy and dispose of real estate or an inheritable right or interest therein.

Warranty deed or title: This piece of paper transfers the title from the seller to the buyer. It also contains the legal description of the property and one or more title covenant

Wire Transfer: A transfer of funds done electronically across a network of banks or transfer service agencies around the world to safely and efficiently move money between individuals or entities to complete a business transaction. Senders pay for the transaction at the remitting bank and provide the recipient’s name, bank account number and the amount transferred. International wire payments are monitored by the Office of Foreign Assets Control to ensure the money isn’t being wired to terrorist groups or for money laundering purposes.

Wire Fraud: is a federal and state crime in which a person concocts a scheme to defraud or obtain money based on false representation or promises and using electronic communications or communications facility. It can be defined broadly to include any writings, signs, signals, pictures or sounds transmitted by wire, radio or television in intrastate, interstate or foreign commerce under false representation.

However, in the real estate industry it refers more narrowly to schemes concocted to convince victims through legitimate-looking emails to wire funds for a property purchase to an individual or entity falsely presenting itself as the legitimate recipient. It’s difficult to prosecute because the funds leave the country to a foreign account that can’t be identified. It’s devastating to the victims because the funds often cannot be retrieved.

Tohickon will never email instructions for a wire transfer. If you receive transfer instructions purporting to be from Tohickon, STOP and call us immediately.

Tenants-in-common: When two or more individuals buy a property together as tenants-in-common, they are partners who may own unequal shares and who can sell their shares of ownership independently. There is no right of survivorship, so upon the death of a partner his or her interest passes to the heirs.

Joint tenancy with the right of survivorship: When choosing to take title with joint tenancy, each owner has an undivided interest in the property. When one joint tenant dies, full ownership goes to the survivor(s) in equal portions.