Key Takeaways
- Delaware settlements are typically handled by title companies or attorneys
- Title insurance is commonly purchased and recommended for buyers
- Delaware uses mortgages as the primary security instrument (not deeds of trust)
- Closing costs are divided between buyer and seller per agreement and custom
- Delaware has state transfer tax that is typically split between parties
Last updated: January 2026
Delaware Settlement Procedures
Delaware uses title companies and attorneys for real estate closings (called settlements).
Settlement Process
Who Conducts Settlements
Delaware settlements are typically handled by:
| Provider | Role |
|---|---|
| Title Company | Conducts closing, issues title insurance |
| Attorney | May represent buyer, seller, or both |
| Settlement Agent | Licensed to conduct closings |
Settlement Steps
- Title Search - Examine chain of title
- Document Preparation - Prepare closing documents
- Settlement Statement - Calculate all charges
- Signing - Parties sign documents
- Funding - Collect and disburse funds
- Recording - Record deed and mortgage
Title Insurance
Types of Title Insurance
| Policy | Protects |
|---|---|
| Owner's Policy | Buyer's interest in property |
| Lender's Policy | Lender's interest (required for most loans) |
What Title Insurance Covers
- Unknown liens or encumbrances
- Errors in public records
- Forged documents
- Undisclosed heirs
- Title defects
Who Pays
Typically negotiable, but common practice:
- Seller often pays owner's policy
- Buyer pays lender's policy
Security Instruments
Mortgages in Delaware
Delaware uses mortgages as the primary security instrument:
| Document | Purpose |
|---|---|
| Promissory Note | Promise to repay the loan |
| Mortgage | Security interest in property |
Note: Unlike some states that use deeds of trust, Delaware uses a two-party mortgage system (borrower and lender).
Foreclosure
Delaware foreclosure is judicial:
- Court supervised process
- Longer timeline than non-judicial states
- Borrower has rights through the process
- Deficiency judgments possible
Transfer Taxes
Delaware has transfer tax on real estate sales:
State Transfer Tax
| Feature | Detail |
|---|---|
| Rate | Percentage of purchase price |
| Split | Typically split between buyer and seller |
| Exemptions | Certain transfers may be exempt |
Closing Costs
Typical Buyer Costs
| Cost | Description |
|---|---|
| Loan origination | Lender fees |
| Appraisal | Property valuation |
| Title insurance (lender's) | Required by lender |
| Recording fees | Deed and mortgage recording |
| Prorated taxes | Buyer's share of property taxes |
| Transfer tax (portion) | Buyer's share |
Typical Seller Costs
| Cost | Description |
|---|---|
| Commission | Real estate fees |
| Title insurance (owner's) | Often paid by seller |
| Transfer tax (portion) | Seller's share |
| Payoff amounts | Existing loans |
| Prorated taxes | Seller's share |
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Test Your Knowledge
What type of security instrument does Delaware primarily use for real estate loans?
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Test Your Knowledge
Who typically handles real estate settlements in Delaware?
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