Title insurance is an agreement to indemnify the policy holder against damage or loss from a defect in title to a specific parcel or real property.

Title insurance protects against claims resulting from various defects which may exist in the title to a specific parcel of real property effective on the issue date of the policy.

Usually this agreement is based on the customary practice in your area. In some areas the buyer will pay while in others the seller will pay. In some places, the seller will pay for the owner’s title policy and the buyer will pay for the lender’s policy. In every case, who pays for closing costs is a matter of agreement between the buyer and seller.

The premium for title insurance is paid only once, at closing; but the protection continues even after you sell the home. The cost is based upon the purchase price and can range from a few hundred to over a thousand dollars. Your owner’s policy will be issued in an amount equal to the purchase price of the property or, in some circumstances, its market value.

A 1031 Exchange is named after Section 1031 of the US Internal Revenue Code. It allows a qualified investor to defer capital gains tax when selling an investment property, provided they reinvest the proceeds into a “like-kind” property.

Florida has the highest percentage of foreign investors in real estate with the US, therefore it is critical for a foreign person selling US real property to address FIRPTA requirements with their tax professionals at the beginning of the selling process. When a foreign-owned US real property interest is sold, the Foreign Investment in Real Property Tax Act (FIRPTA) requires that a tax equal to 15 percent of the “sale price” by the foreign person upon disposition be remitted to the Internal Revenue Services (IRS), unless one or more exemptions apply to the seller on the transaction from the sale.