Sales Agents may have to pay $$ if their clients don’t know about the new FIRPTA* withholding rate.
What changed on 2/17/2016?
- 0% withholding: buyer uses house as residence * & price is $300K or less
- 10% withholding: buyer uses house as residence* & price is over $300K & under $1 million
- 15% withholding: if price is over $1 million, regardless of how buyer uses house or for any price if buyer doesn’t meet residence rules
- Sales agents who represent buyer or seller subject to FIRPTA can, under certain circumstances, be found personally liable for all or part of that tax if proper amount not withheld at closing.

WHAT
The American Land Title Association (ALTA) created the Settlement Statement for settlement companies to use for itemizing the fees and charges involved in any transaction that involves the TRID Closing Disclosure (the “CD”). It does not replace, nor is it an alternative to, the CD.
WHY
The Settlement Statement addresses some privacy issues in the CD:
- Most lenders are not providing the Buyer’s CD to their sales agents.
- Fees are not itemized on the CD, and it usually only shows the commission paid by one party to the transaction.
- Neither the Buyer nor Seller CD is signed by both parties.
- Settlement agents cannot share the CD with Sales Agents because of the non-public personal information they contain.
How IT’S VALUABLE TO YOU
Trident, after receipt of customer authorization, will give you a copy of the Settlement Statement BEFORE settlement.
The Settlement Statement provides an itemized accounting of all amounts paid at closing in a format that is easily explained to, and understood by, your clients.
Your buyer’s peace of mind is NEVER “optional.”
What is that reason?
For many people, buying a home is the single largest investment they will ever make. Lenders go to great lengths to minimize the risk of loaning money. A key step they take is that they require a lender’s loan policy, which assures of the validity, priority and enforceability of the lien (mortgage) – serving as protection for the lender’s security interest in the property. However, a loan policy does not provide any protection to the buyer. That’s why your buyer needs an owner’s policy.
Only an owner’s policy can protect the buyers’ interest in the property from unknown encumbrances, legal conflicts and unforeseen claims. A one-time premium provides buyers with coverage that will cover the cost of defending lawsuits attacking their title, either removing the title problem or paying the insured’s loss. This protection lasts as long as they, or their heirs, own the home. It’s a small cost which provides them peace of mind that the investment they have made in their home is safe.
Over 85% of Trident buyers choose to purchase an owner’s policy once they learn about the coverage it provides. When a standard loan policy is being issued, the small additional expense of an owner’s policy is a bargain.
A buyer expects to enjoy certain benefits from ownership. For example, they expect to be able to occupy and use the property as they wish, to be free from debts or obligations not created or agreed to by them, and to be able to freely sell or pledge their property as security for a loan. The right to legal access to a parcel of land has long been a basic coverage that is often taken for granted by buyers. Another issue that many buyer’s don’t think about are sellers who put a lien on the property during the gap period between the date of closing and when their deed is recorded.
Also, while the standard owner’s policy provides good coverage, consumers may need and want additional coverage. The Enhanced owner’s policy gives coverage for future events affecting their title which they haven’t caused or created and have no real way to protect against. Sales agents should NEVER tell a buyer not to pay for additional coverage as you may be financially liable if the buyer suffers a post-closing loss that would have been covered by the enhanced coverage policy!
Read on to learn about recent actual claims where an owner’s policy was invaluable to the purchaser.
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