The land title industry is filled with many different types of calculators. Net sheets to loan disclosures, title premiums to rate quotes.
More often than not, they get confused as serving a similar purpose.
While calculators used for buying or selling real estate may all seem to be the same, there are many differences between the types of calculators available, the audience they are designed for, and what part of the real estate transaction their purpose serves.
In this article, we’ll examine the differences between each type of title insurance calculator used by title companies, and also note some of the similarities between them as well.
Closing Cost Calculator
One of the most common and generic ways to reference a title insurance calculator is by using the term “Closing Cost Calculator.” This form of calculator is what it sounds like – to calculate the cost to close on a real estate transaction such as a refinance, purchase, or sale.
From the buyer’s perspective, exploring how much is owed after title and lender closing costs, insurance premiums, attorneys fees, tax prorations, etc. to purchase a property is a typical use for it. A buyer’s agent (their real estate agent) or lender might request this from the Title Company selected.
Or it could mean the opposite from the sellers perspective, how much is owed from the profit of the sale, if there is leftover cash after payoffs, title closing costs, etc. or how much cash they will be out-of-pocket if there is not enough from the sale to cover the costs in order to sell the property – assuming they are paying closing costs. Again, a listing agent (their real estate agent), could also request this from the Title Company
Additionally, other parties involved in the transaction such as the lender, bank, title company, attorney, or mortgage broker might use this language interchangeably with the other terminology listed below to calculate estimates for themselves or their clients.
In short, a closing cost calculator is typically a generic solution to calculate the fees associated with buying or selling real estate.
Net Sheet Calculator
A net sheet calculator is most often provided by the title companies to be used by their marketing people and real estate agents alike to calculate the “net” of what a buyer owes, or a seller earns from the sale of real estate and is typically delivered in the early stages of purchase or sale.
In addition, Realtors use net sheets to do quick calculations to figure out their commission from property sales.
Net sheets aren’t useful in every market. For example, in markets where real estate is driven by lenders, other calculators are more useful and accurate for mortgage lending purposes.
However, in markets driven by real estate agents – either buyers or sellers, the net sheet can be more common and useful as it usually is set up with a common language and a simple format to read from.
For instance, in South Florida – Miami-Dade and Broward Counties, where the purchase or sale of real estate is typically closed is often driven by the Buyer or Buyer’s Agent, as the buyer usually pays for the Title Insurance.
However, in the rest of Florida, the Seller often pays for the Title Insurance so the Seller or Listing Agent will influence where the transaction closes.
There are even a few different versions of a net sheet to account for this variance.
Seller Net Sheet
Seller net sheets focus on what the seller will make or need to pay from their profits in order to sell the property.
They usually include debits to the Seller’s bottom line such as Payoffs, Tax Prorations, Transfer Taxes, Commissions to Realtors, Title and Attorney Fees (if applicable, depending on the region), etc.
Buyer Net Sheet for a Financed Purchase
Buyer Finance net sheets are similar to seller net sheets but instead are focused on what a buyer will need to pay in order to close on a home or property if they are using a loan to finance the purchase.
This variation of a net sheet may include line items that account for lender-related charges like origination fees, appraisal, and endorsements.
Buyer Net Sheet for a Cash Purchase
Buyer Cash Net Sheets are slightly different from the above. Since the sale doesn’t require financing from a bank, the net sheet is slimmed down in terms of the number of line items and usually has fewer fees associated with the closing.
Title Premium Calculator
Next, we move on to the Title Premium Calculator.
A title premium is simply part of the overall cost of selling a property. It pays for the title insurance policy on the property itself.
In real estate, liens and other things can stain ownership and the ability to sell a property free and clear of issues.
So, without proper due diligence by a title company or real estate law firm at the time of sale, and without title insurance ensuring free and clear ownership, you could potentially spend your life savings on a property that isn’t really yours or end up paying a bundle unexpectedly to clear past issues.
To explain it a different way, the title premium is one line item on a net sheet and thus is typically part of a closing cost calculation.
As such, when someone is looking for a title premium calculator, they are often just looking for how much the title insurance premium portion of the transaction will cost them based on the price of the property.
And finally, we get to a Title Quote Calculator…
Title Quote or Rate Quote Calculator
A title quote calculator is very similar to a title premium calculator, except that in certain states the rates aren’t standardized, or promulgated by the state, they are filed by each Underwriter.
In these states, different underwriters have different rate schedules and thus different premium amounts.
The easiest way to think about this is that it is similar to property insurance you might shop around for a car or a boat. GEICO might charge $50 to insure your car but Progressive might charge $48.
So when someone is looking for a rate quote, they are often looking for the best title premium rate available in a state where rates are filed and different between the underwriters.
Since these often come straight from the underwriters, they often include special fees known as endorsements, that are specific to a state or region.
The difference between title insurance calculators
So there you have it. Even though the use of these calculators is similar and sometimes interchangeable, in actuality they serve a slightly different purpose.
Closing cost calculators is the most general term and can be used interchangeably with the others.
Net sheets are typically used by real estate agents for their clients.
Title premium calculators are primarily used to see what the cost of title insurance is.
And a title quote calculator is typically used to look up the best title rate when there are multiple underwriter premiums in a filed rate state.
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