Title Insurance Explained Visually


What is title insurance and why should any buyer get it when purchasing a home (single family, townhouse, condo, apartment, or whatever format your home purchase takes)? Doesn’t the attorney or settlement company handling the closing see to it that you have a clear title? Isn’t this just another way for someone to siphon a few coins off a real estate transaction?

Title insurance prevents the property owner from suffering financial loss if, at any time during his ownership of the property, someone comes along who can show that they have full, or partial, ownership of the property instead.

A careful title search is done at the time property changes hands. On rare occasions mistakes are made anyway. Property can change hands in a number of ways including by deed, by will and by court action. Typically, these proceedings are recorded in different places. Searching the history of ownership to be sure nothing has fallen through the cracks is a tedious job that requires alertness, intelligence, and skill.

It is very likely that the value of your property will go up over the years. As time passes, these elements are likely to result in your home equity’s being your largest asset. Just how devastating would it be if you eventually discovered that someone else owned what you’d always thought was your home?

Do yourself a favor. When you buy a home, buy title insurance.  And watch the video to understand the essentials.

Which Square Footage Figure Should I Use?


Home size is one of the key figures used in comparisons.

But you may have different measurements to choose from,  as you’ll learn in this video, including builder, appraiser, tax records and possibly owner records.

Which one is right, and which one is best?

The official figure is the one in tax records – typically, the county.

Any other figure must be documented by a builder’s floor plan

an appraisal or an official floor plan, prepared by a company for a fee.

If your house has been remodeled and you’re planning to sell

you may want to confirm that the official record matches your actual house – and update if required.

Most lenders will require an appraisal which will verify the figures you used. So be accurate and keep records to make the most of your sale.


What Is An Appraisal?


Every house is unique; appraisers are trained and licensed for expertise in putting a value on properties.

Appraisers don’t work for the buyer or the seller;  their primary mission is actually to protect the lender who’s risking money against the home’s value.

Appraisers have to weigh factors about the property and location – including size, condition and comparable properties – to appraise its current value.

They know how to focus on conditions that affect value; dishes in the sink don’t; damage and neglect do.

Appraisals lower than the proposed purchase price can affect transaction details. The seller might have to lower the price

or the buyer might have to increase down payment or fund additional escrow.

Appraisal seems a lot like inspection, but they’re not the same.

You can think of it this way:

Appraisers report on value to the lender

Inspectors report on condition of the house and major components to the buyer.

So – expect both appraisal & inspection in your transaction.

What Does The Closing Process Involve When I Sell?


As this video explains, a signed sales contract doesn’t mean your house is sold. There are still financial, contractual and legal steps for both sides.

The buyer has to get financing to meet the contract terms – which includes credit checks.

The property is inspected and appraised; title insurance and escrow accounts are set up while you locate new housing, pack and move. And take care of any obligations like painting or repairs. After the contract is signed, it can take a month or more of closing steps to reach the closing meeting.

So plan on that when you plan to sell.

I’m Buying A Home From A Foreign Seller: How Does FIRPTA Affect Me?

I’m Buying A Home From A Foreign Seller: How Does FIRPTA Affect Me?

In normal circumstances, buying a home can be a stressful experience. However, when you add in a seller who’s not a United States citizen, it can become even more complicated. To make your real estate transaction go off without a hitch, learn a little bit about the Foreign Investment In Real Property Tax Act (FIRPTA) and what it means for you when you buy a home from a foreign seller.

Explaining FIRPTA

Often abbreviated as FIRPTA, the Foreign Investment In Real Property Tax Act, requires that U.S. buyers purchasing a property from a foreign seller withhold 10% of the sales price as a “tax”. As a buyer, it is your responsibility to identify whether the seller is not a U.S. citizen and subject to the FIRPTA withholding. Failure to comply means that you, as the buyer, could be responsible for the tax.

Since foreign investors in the United States aren’t taxed on most capital gains, requiring the buyer to withhold 10% of the sales price on the seller’s behalf helps ensure that the United States government receives the tax revenue. Without this withholding, the government would have no way to collect this revenue since foreign investors could simply leave the country without paying it.

Buyers will need to report the 10% withholding to the IRS by the 20th day after the date of transfer. If it’s later found that the foreign seller didn’t actually owe this 10% in taxes, he or she can file a tax return with the IRS and wait for a refund.

How A Title Company Can Help You Understand FIRPTA

If FIRPTA sounds confusing, it’s because it is! U.S. tax codes can be quite complicated, which is why it’s important to partner with someone who understands just how FIRPTA and other tax regulations can affect home buyers. Many real estate professionals do have a basic understanding about FIRPTA, especially in a location where foreign real estate transactions are common. However, there are a number of variations that can exempt a buyer from withholding funds for FIRPTA, so it’s vital that your title company and real estate agent are knowledgeable about all the guidelines and exceptions.

If you’re not sure whether you should worry about FIRPTA, talk to an experienced realtor or title company, such as Title Junction. We can help ensure that you’re complying with the strict FIRPTA regulations so that there’s no surprise.

Title Junction offers classes concerning a number of real estate topics, including FIRPTA, HUD1, title commitment and policies, signature requirements and title order process and basics.  Call to schedule your class today!

Understanding Real Estate Title Insurance Terminology

Like any industry, the title insurance business has a lingo all its own.  The Florida and Cape Coral real estate title insurance agents at Title Junction can walk you through anything you don’t understand and explain any unfamiliar terms to you.  But it always helps to do a little research on your own, which is why we’ve compiled a short list of some of the most commonly used title insurance terms.

Basic Definitions To Know

One thing that is often confused is the difference between a real estate title and a property deed.  Often referred to as “holding title to a property”, a Title provides you with legal use and possession or ownership of the property.  However, it is not a physical piece of ownership evidence; that is the Deed.

Title Insurance, itself, is an indemnity or loss-prevention insurance policy that protects the buyer from legal defects in the title that occurred prior to taking ownership of the property.  In cases where a mortgage is taken out, two title insurance policies will be issued: An Owner’s Policy for the homeowner and a Lender’s Policy, or mortgage insurance, for the mortgage lender.

Understanding Other Terms

You may hear or see the word “ALTA” as you go through the title insurance process.  ALTA stands for American Land Title Association, which is the leading trade association of title insurers. 

Another commonly used term is Escrow.  Escrow has many different meanings, depending on how it is being used.  As it relates to title insurance, it refers to the funds that you provided as earnest money when you made the initial offer on the property.  Those funds have been sitting in a special account set up by your escrow holder, often the title company.  The Closing, which is the final meeting between the buyer, the seller, the lender, title agency, realtors and possibly lawyers where property ownership is transferred.

The Title Report

One of the main duties of a Fort Myers title insurance agency like Title Junction is to conduct a Title Search on the property in question.  A Title Search is an in depth check of public records to make sure the property is legally available for sale and there are no encumbrances or liens against it.  This also shows the ownership history of the property, including mortgages and liens against it.

A Lien is a financial claim to the property.  It may be a mortgage, mechanic or contractor lien or court judgment.  Liens generally must be paid off before a mortgage lender will allow the property sale to take place.  A property may also have an Encumbrance, a legal interest in the land that may affect its value.  Encumbrances could be easement rights, zoning ordinances, claims or liens, unpaid taxes or restrictive covenants.  Encumbrances do not restrict the sale of the property.

The best way to ensure you are comfortable with these terms is to speak with your title agent.  Title agents use these terms all the time and can explain exactly how each is relevant to your personal transaction.  An open relationship with your title agent will ease any pre-closing anxiety you may have.

Tenth Annual Ballpark Festival of Beers in Fort Myers

The Tenth Annual Ballpark Festival of Beers in Fort Myers at Hammond Stadium is this Saturday, January 25, 2014. An opportunity to spend over 3 hours sampling over 85 beers from around the world!

There will be food available and live music to entertain.

Brought to you by Miracle Baseball

When:  January 25, 2014  6:00pm till 9:00pm

Where: Hammond Stadium           
             14100 Six Mile Cypress Rd.
              Fort Myers, FL 33912

Tickets: $25 in advance/$30 at the door

You must be 21 or older to attend. Children, strollers and anyone under the age of 21 will not be allowed into the event.

For more information or tickets visit miraclebaseball.com.

Get out and enjoy the Fort Myers fun…Cheers!

Cape Coral 2014 St. Andrews Festival

So it’s that time of year again, the Cape Coral St. Andrews Festival. I my self make this a tradition every year to go and have some crazy fun with the kids, even now as they grow up. Only now they like to see me get sick in some of the rides!!

Take the family and have some fun in Cape Coral!


January 16th – January 19th. 
St Andrews Catholic School – 2628 Del Prado Blvd South, Cape Coral, FL

* Thursday, January 16th      6:00 to 10:00pm

* Friday, January 17th          6:00 to 11:00pm

* Saturday, January 18th      Noon to 11:00pm

* Sunday, January 19th        Noon to 10:00pm

Ticket prices vary for food and rides and ride bracelets (ride all the rides free with bracelet purchase) are available for $55.00 per bracelet and are available until 5:00pm on the opening day of the festival.  After the festival starts the bracelets will be available but the price increases to $75.00 per bracelet.

For more information visit www.saintandrewsfestival.com or call 239-772-3922

What Is An Escrow Account? Do I Need One?


As we show you in this video, an escrow account is an account, established by your lender, to set aside a portion of your monthly mortgage payment to cover annual charges for homeowner’s insurance mortgage insurance (if applicable), and property taxes.

Escrow accounts are a good idea because they assure money will always be available for these payments.

If you use an escrow account to pay property tax or homeowner’s insurance make sure you are not penalized for late payments since it is the lender’s responsibility to make those payments.

What Steps Need To Be Taken To Secure A Loan?


You’ll see some pictures in this video to help you remember later, but the first step in securing a loan is to complete a loan application.

To do so, you’ll need the following information.

  • Pay stubs for the past 2-3 months.
  • W-2 forms for the past 2 years.
  • Information on long-term debts.
  • Recent bank statements tax returns for the past 2 years.
  • Proof of any other income.
  • Address and description of the property you wish to buy.
  • A sales contract on the home you want to buy.

During the application process, the lender will order a report on your credit history and a professional appraisal of the property you want to purchase. The application process typically takes between 1-6 weeks.