Posted by Dave T on March 08, 2000 at 18:53:06:
Q. Since this is a VA owned property, and I am taking the property “as-is”, do I still need legal representation at closing?
A. How are settlements done in your state? In MD, and VA, settlements are done by title companies. In SC, settlements are done by attorneys. In either case, you pick the title company or the attorney you want to conduct the settlement. The attorney or title company is your “legal representation”.
Q. I was advised by a R.E. attorney that I still need to purchase title insurance even though the VA is providing a clear title.
A. If you purchase owner’s title insurance at settlement, I am told that the insurance will be cheaper since the title search was already done for the lender’s title insurance. Do not even consider saving a few bucks and skipping owner’s title insurance. While the VA will pass title free and clear of all liens and encumbrances, you have no protection against an undetected defect in the title unless you have owner’s title insurance. The title insurance is sold through RE attorneys and title companies because they conduct the settlement. It is true that the attorney does receive a small commission on the sale of the insurance. Don’t worry about that. Just purchase the very cheap insurance for your expensive investment.
Q. Am I correct in estimating my closing fees (I’m not a Veteran) to be approximately 5% of the purchase price?
A. If settlement and closing costs in your area usually run about 5% of the purchase price, then that is a good estimator for you. If you plan to use VA vendee financing for your purchase also plan to add 2.25 points to your closing costs for the VA funding fee. If you plan to borrow the money to complete the purchse, then your mortgage lender will give you an estimate of the closing/settlement costs. Not being a veteran has no effect on the amount of the closing/settlement costs.