Closing and Title Costs
Closing costs are the fees and expenses paid at the end of a real estate transaction. These typically include title insurance premiums, escrow fees, recording fees, and notary fees. Who pays for which cost can often be a point of negotiation between the buyer and seller.
Creative Financing
Creative financing refers to non-traditional methods of funding a real estate purchase, such as seller carry-backs, lease-options, or land contracts. While these can help buyers who don’t qualify for standard loans, they require careful legal and title review to protect all parties involved.
Understanding Title Insurance
Title insurance protects real estate owners and lenders against loss or damage they might experience because of liens, encumbrances, or defects in the title to the property. It is a one-time premium paid at closing that provides protection for as long as you own the home.
Title Insurance: Where Does Your Dollar Go?
Unlike other types of insurance that protect against future events, title insurance premiums primarily fund the extensive research required to eliminate risks from the past. A large portion of the cost goes toward the title search, examination, and the maintenance of title ‘plants’.
Title Insurance Requirements for Insuring Trusts
Insuring a property held in a trust requires specific documentation, such as a Certification of Trust. Title companies must verify that the trust is valid and that the trustees have the legal authority to enter into the transaction, whether it is a sale or a loan.
Title Insurance When Refinancing Your Loan
When you refinance, your lender will typically require a new lender’s title insurance policy. This policy protects the lender’s investment by ensuring their new loan is in the correct lien position and that no new issues have arisen with the title since you first purchased the home.
Statements of Information
A Statement of Information is a confidential form used by title companies to distinguish buyers or sellers from others with similar names who may have liens or judgments against them. Providing this information helps ensure the clear transfer of title by eliminating irrelevant records.
Understanding Preliminary Reports
A preliminary report is a document prepared prior to issuing a policy of title insurance that shows the ownership of a specific parcel of land together with the liens and encumbrances thereon. It serves as an offer to issue a title insurance policy subject to the stated exceptions.
Understanding Foreclosures
Foreclosure is the legal process by which a lender takes possession of a property after the borrower fails to make mortgage payments. Understanding the stages of foreclosure—from notice of default to auction—can help distressed homeowners seek alternatives like short sales or loan modifications.
Common Ways of Holding Title
The way you hold title to your property (e.g., Joint Tenancy, Community Property, or Tenants in Common) has significant legal and tax implications. It determines how the property is managed during your life and how it is transferred upon death.