The Title Agency: Making Your For Sale By Owner Transaction Smooth And Hassle-Free

A reputable and qualified real estate title agency can make your for sale by owner property transaction flow smoothly with minimal delays.  Many people who are involved in a for sale by owner transaction question the role of the title agency and how the agent and agency can assist them with their purchase, but title agencies provide important services and safeguards throughout the sale process.

Your For Sale By Owner Property Purchase And Title Services

A real estate title agency performs many important functions during any property transfer, including for sale by owner transactions.  One of the most basic services provided by the agency is to conduct a title search on the property being sold.  This search will uncover any liens against the for sale by owner property, and ensures the property is legally eligible for sale.  A title company has extensive experience doing this type of records research.  They know where to look, what different terms and findings mean and how to comply with all applicable local, state and federal laws.  The title agency can be selected by either the buyer or seller and is a negotiable part of most real estate transactions.  In either case, the title agency serves as an impartial party that works to ensure a smooth closing for both buyer and seller.

Another primary function of the title agency is to provide the for sale by owner property purchaser and the mortgage lender with title insurance.  This indemnity insurance policy protects the buyer and lender from unseen claims that may arise against the property in the future, such as unpaid taxes or property liens, as a result of past owners’ actions.  Although the title search is supposed to find these liens, it’s always possible for a lien to be missed or a claim to arise against the property from an unknown source.  That’s where title insurance comes in.  The policy will help protect you from losses if such a claim does come up.

While conducting the title search, a title agency will also order a survey of the property, which will uncover any encroachments onto the land that the buyer may be unaware of.  Both title insurance and property surveys are examples of safeguards provided by title agencies.

Additional Services Of The Title Agency

Many title agencies also act as escrow agents which means they can hold the earnest money, pay off the seller’s mortgage and pay any necessary taxes after closing.  Title agencies also file the transaction records with the appropriate governmental entities so that the transfer of the for sale by owner property is properly recorded.

You will also find a notary public on staff at most title agencies.  Notaries assist during property closings and property transactions by verifying the identities of those involved.  This helps prevent fraud.

Last but not least, title agencies also often host the actual closing and facilitate the closing process.  From the moment the earnest money check is signed to the moment the last signature is written on sale documents, the title agency is involved.  The agency handles correspondence and forms from the buyer, the seller, any real estate agents involved, banks, mortgage lenders and more.  The agency will keep track of all of this correspondence and make sure everything is in order for the closing to take place.

It is important for buyers and sellers of for sale by owner properties to work with an experienced, full-service title agency.  These agencies will guide you through the closing process, ensuring all of the necessary transaction paperwork is in order and that the property is eligible for sale.

Real Estate Title Options In Florida

How you hold title to real estate affects how you can use the property and how you can distribute it upon your death.  The differences are subtle but important.  Full service title agencies, like Title Junction, can provide valuable insights about these differences as well as provide escrow and Cape Coral and Fort Myers notary services for your real estate transaction.

There are Three Main Options for Holding Real Estate Title in Florida

In Florida, four basic types of property ownership exist.  The type of ownership you select is sometimes referred to as “holding title” to a property and has important implications for your use of the property. Here we set out three of them.

Joint Tenancy with Right of Survivorship provides each owner with  an equal interest in the property and allows the property to pass to the surviving owner, uncontested, if the other owner dies.  The property is not willed away and does not pass to heirs of the deceased.

Tenancy in Common titles are similar to Joint Tenancy but they do not offer the Right of Survivorship.  With this type of title, each owner has a stated interest in the property.  Property shares, or interest, may be equal parts, or unequal.  While both owners survive, they have 100% use of the property no matter what their actual share percentage is.  An owner cannot sell his or her portion of the property without the other owners’ permission, but they can transfer their interest in the property at any time.  The key element of Tenancy in Common ownership is that owners can will the property away upon their death.  It does not automatically pass to the co-owner.

Tenancy in the Entirety is also called Community Property and is only available to married couples.  Each couple has a 100% interest in the property and must have the consent of their spouse to transfer ownership. Upon the death of one spouse, the surviving spouse automatically retains the property.  Tenancy in the Entirety is not used throughout the United States, but is is a recognized form of title in Florida.

 

We are not attorneys, the information contained in this blog post is provided for educational purposes only as well as to give you general information and understanding. It should not be considered or construed as legal advice.

How A Real Estate Title Insurance Company Works For You

At Title Junction, we meet with many clients and handle numerous real estate closings every year.  Some of our clients are veteran homebuyers and others are going through their first property purchase.  Homebuyers and sellers alike sometimes wonder what the role of our Cape Coral title insurance agency plays in their transaction.  What services do we provide to them?  How does our work assist their transaction in going through?  And whose interests do we represent?

Investigating Properties

A real estate title agency’s services may be best described by using the words investigation and facilitation.  We investigate property histories and facilitate real estate closings.

One of the primary roles of our title agency is to conduct a derailed search of the public record for the property that is to be closed on.  This search is called a title examination or a title search.  Real estate title agencies will examine public records going as far back as the records exist to ensure that the property is unencumbered and legally available for sale.  We look for things such as back taxes owed or liens on the property and research the ownership history, survey data and property tax history.  This information is then compiled in a document called an Abstract of Title.

Facilitating Closings Through Notary And Other Services

In addition to investigating the history of the property, we also offer real estate closing services including Fort Myers escrow and notary services.  At Title Junction, we handle residential and commercial real estate transactions by conducting title searches, acting as a closing agent, escrow agent or notary, providing title insurance or even hosting outside closings at our offices.

As the closing agent, a real estate title agent will oversee the transfer of interests, ownership and funds during the closing.  The closing agent makes sure that no funds change hands until all of the necessary paperwork has been completed properly.  If our title agency is also acting as the escrow agent, they have a fiduciary responsibility to hold the buyer’s escrow payment until the closing is complete.

Protecting Your Investment With Title Insurance

Last but not least, the real estate title agency often provides title insurance for the property.  Title insurance is an indemnity policy that protects both the buyer and the lender from unforeseen claims as a result of past ownership activities.  Separate policies are issued for the owner and lender and they will protect each party from financial loss due to claims that arise as a result of title problems.  These one-time only policy purchases are paid for at closing.

Impartial Service Provider

Perhaps the greatest service a real estate title company can offer is its impartiality.  The job of the title agent is to follow the rule of law, closing instructions, transaction documentation and to generally make sure everything is in order for the sale to close successfully.  This impartiality safeguards everyone’s interest in the property and defines title agencies as a trustworthy place to do business.

What Are Real Estate Commissions?

 

Like the video says – real estate agents aren’t paid by the hour!They’re paid a percentage of the purchase price in a successful real estate transaction.

When one agent represents the sellers and another represents the buyers the commission is typically split between them.
In the US, real estate commissions are commonly 6% of the transaction usually 3%/3% when split.

No government or industry body sets commission rates.  Legally, commission rates ARE negotiable.  However, remember that agents only earn their commission on successful sales.

Consider the work you want them to do for you to evaluate the value you should put on the commission they earn.

What Is “Prime”?

 

The Prime Lending Rate – sometimes just called “Prime”  – is the interest rate that banks charge each other for overnight loans. Some consumer rates – like ARMs – are set in relation to Prime.

In the US, Prime is affected by the Federal Reserve lending rate to banks; historically, Prime is about 3 percent above the Fed rate.

The video shows  an example.

  • The Federal Reserve loans to Bank A at 1%
  • Bank A loans to Bank B at 4%
  • Both banks – A & B – will recalculate variable-rate loans like ARMs on that 4% Prime figure.

ARM rates are frequently defined as “% above Prime” – that gap is usually called the “margin” or “spread.” Just remember those 3 layers in Prime: Federal Reserve Bank A Bank B And finally, YOUR rate.

Closing Costs Explained Visually

 

Purchasing a home is exciting. Once escrow begins, the excitement can change to frustration, particularly if you are not ready for the closing costs that quickly accumulate.

Closing costs simply refer to the fees associated with various things associated with the escrow process in a real estate transaction. In the excitement of having an offer accepted for your dream home, you can easily lose track of the fact you are going to need to have some serious cash on hand to pay them. Many people make the mistake of only assuming they need the down payment money, and have to rush around town trying to come up with money for the closing fees.

Do yourself a favor, and discuss closing costs in advance with your real estate or mortgage person.  And watch this video to have a good mental picture of the costs that you’re likely to incur.

 

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.

How Should I Prepare For Internet Showing?

 

Today, your first “showing” will be on the Internet – you’re watching this on the Internet, right?

Your price, listing description and PHOTOS determine whether someone will visit in person.  Consider professional staging advice or help.

Prep for photos and video just as carefully as real visits.

Ask your realtor if they use a professional photographer

If they do look at prior photos and pick someone who understands the job.

Photos should make the most of your home’s features and give prospective buyers an emotional connection that invites them to visit in person.

Help them envision their lifestyle in the house not just the counters and walls.

If your realtor recommends video, just as with  photography stage it carefully and hire a professional it will pay off.

And look over your listing when it goes live on a computer AND a mobile device to make sure it’s accurate, pleasant and compels people to show up.

Remember – your first showing these days will be on a screen.

 

How Should I Prepare The Outside For An Open House?

 

Professional “staging” may include the exterior, but if you’re doing it all yourself, try the five things outlined in this video.

1 – Landscape & lawn.

That’s the first impression; make it a good one.

Mow, prune, edge and get rid of junk!

2 – Paint And Clean!

You don’t have to do the whole house, but the front door and lintels should either be painted or cleaned.

3 – Leaks & Repairs

Small visible problems can become large mental objections and change how someone feels about your house.

Fix ‘em beforehand.

4 – Pets

Some people have allergies and concerns.

Time for Fido to visit a friend.

You weren’t including him with the house anyway.

5 – Get Fresh Eyes

Have your realtor or a friend who’s willing to be candid tell you what you missed. Or pay a staging professional for a report.

We don’t really see familiar things well – so let them be your

‘test buyer’ so you can present the best first impression to the real ones.

 

How Should I Prepare The Inside For An Open House?

 

For many homes and markets, professional help from someone in “staging” makes good financial sense.  Like this video say, check your staging options first.
If you are doing it yourself, here are 5 key tips.

One – Depersonalize.

You want the buyer to envision this house being their home?

Remove the things that make it YOUR home – photos, awards, collections, and STUFF.

Two – MOVE the stuff.

It’s tempting to shove things in closets and attics but your prospective buyer will see a much smaller house if those spaces are full.

Move it to a storage space or a friend’s garage.

Three – Warm it up.

Baking bread or cookies

adding fresh flowers

and colorful pillows and throws

are touches used by professional stagers to make a place warm without your stuff.

Four – Light it up!

  • Light sells homes.
  • Clean windows, inside and out.
  • Light bulbs all working and curtains open or even gone.

Five – Go Away.

Don’t hover – leave.

Pack for a day trip and have your realtor tell you when to return

Buyers won’t envision themselves buying if you’re around.

Depersonalize and move stuff out;

Warm it up and light it up.

Then leave and let your realtor do their job.