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Title Insurance: What You Need to Know

Title Insurance: What You Need to Know

Buying a new home can be overwhelming, and once you’ve finally found the right one, closing is still a complex process. In addition to that, few buyers are aware of basic terms—and even fewer specifics.

Aspects of title insurance can mean the difference between a pleasing transaction resulting in ownership of a new home—or financial ruin.

What exactly is title insurance?

Title insurance is a contract used to reimburse loss or damage due to problems concerning the ownership of property, including title defects, undisclosed heirs, liens against the property, and more.

But before a title insurance policy can ever be issued, there is one crucial step:

The Title Search

A title search is the very first step in the real estate closing process.

A title searchis an examination of all available documents pertaining to the history, ownership, and financial condition of a property to identify any inconsistencies that could result in a loss. The examination includes any records the title search company can get their hands on, including reports on possession, name searches, chains of title, and tax searches.

Once identified, some of these issues can be resolved. Others can delay the sale. And in some cases, unresolved problems will never make it to the closing table.

Even the most thorough title search can fail to uncover a variety of issues.

That’s where your title insurance policy comes in.

Lender’s Policy

A lender’s policy is required by mortgage companies for them to issue a mortgage loan. The policy will cover the bank or lender for any legal fees or loss of payment due to issues with the title. You can see why lenders require this insurance.

Unfortunately, it will not protect the buyer’s personal finances.

That is what an owner’s policy is for.

Owner’s Policy

In the unlikely—but very possible—occurrence of a problem with title after the closing of a real estate transaction, an owner’s policy is the last line of defense for the buyer.

The owner’s policy will insure reimbursement for financial loss to the buyer in the event of a post-purchase complication with the title. In some cases, an owner’s policy might make it possible for the buyer to retain full ownership of the property.

As complex and overwhelming as it might seem, the entire real estate closing process can be relatively pain-free. Familiarizing yourself with the process is the main key.

However, the best way to decrease the worry that goes along with a real estate closing is to have a professional by your side. If you are looking to buy or sell and need assistance, don’t hesitate to contact us today.


At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: Cosmetic or Structural? Which Improvement Is Better for Your Home’s Value?

Cosmetic or Structural? Which Improvement Is Better for Your Home’s Value?

 

Buyers generally seek the least expensive home in the best neighborhood they can handle. As such, you want to present a home that fits in the neighborhood but doesn’t stand out too much.

For example, if the other houses in the neighborhood are all 4 bedrooms, 3 baths and 3000 square feet, additions that turn your home into 5 bedrooms, 4 baths, and 4000 square feet will make yours harder to sell.

This is because buyers will look to other—likely more affordable—houses in the same neighborhood. Improvements should make a house show well and fit well in the neighborhood. Last-minute capital investments in large structural changes aren’t likely to pay off.

But cosmetic upgrades like painting and landscaping help a home “show” better and often do pay off. Same amenities (and price range) as the other houses but better style? Now that sounds like a winner!

Of course, all systems and appliances need to work if you want to get a top price. To give your home a competitive edge and attract buyers and bids, work with a professional real estate agent and start early.


At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: How Do I Pay the Title Company at Closing?

How Do I Pay the Title Company at Closing?

How Do I Pay the Title Company at Closing?

Can I bring my funds in cash? Can I pay the balance with my credit card?

The simple answer? No.

There are a few ways that payment can be made. However, with an array of fraud on our door steps, some companies have tailored what will be accepted at closing. Even more so since the most current Florida Realtors/Florida Bar-1 2010 contract has some new clauses that specify what can happen if certain payment methods are used.

What Form of Payment Is Accepted

Typically an escrow deposit (or earnest money) is made and will be accepted in the form of a personal check. This is acceptable since there is usually plenty of time from when the check is deposited to the closing date so that the check has time to clear the bank.

The two normal methods of payment at a title company are a wire transfer and a cashier’s check, which is sometimes called a bank check. These are funds that are generally considered immediate. When a closing happens, the seller’s proceeds and the payments to be made have to be able to be disbursed on available and collected funds.

What the Contract States About Funds

Page 1, line 25; it states in regards to initial deposit…
(checks subject to COLLECTION)

Page 1, lines 37-38; in regards to balance to close it states…
by wire transfer or other COLLECTED funds

Furthermore line 39 then reads…
NOTE: For the definition of “COLLECTION” or “COLLECTED” see STANDARD S.

On page 10 you will find the STANDARD S clause on lines 547-550…
COLLECTION or COLLECTED: “COLLECTION” or “COLLECTED” means any checks tendered or received, including Deposits, have become actually and finally collected and deposited in the account of Escrow Agent or Closing Agent. Closing and disbursement of funds and delivery of Closing documents may be delayed by Closing Agent until such amounts have been COLLECTED in Closing Agent’s accounts.

More importantly, know and realize that there are laws that pertain to “good funds.” We just don’t make this up.


At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: Refinancing? Yes…You Need Title Insurance

Refinancing? Yes…You Need Title Insurance

Refinancing? Yes…You Need Title Insurance

So, I have often been asked the question, “Why do I have to pay for title insurance again? I thought I was told it’s a one-time fee for as long as I own my home!”

Well yes, it is. However, what you are now buying is a lender’s title policy for the new lender, but your owner’s title policy is good for as long as you own the home. If you already have an owner’s policy, you can often get a “reissue credit” on any future lender’s title policies that you may be required to purchase when you refinance. Also, if you refinance your loan with the same lender, they may provide additional discounts. A mortgage policy is only good for the life of that loan, hence the reason for a new policy on a new loan, even if it’s with the same lender!

Believe it or not, entities can put liens against you and your property without you knowing (i.e. identity theft). This new policy when you refinance will protect the bank and you, considering that you are now aware of what may have happened since you purchased the property. Since the time that the original loan was made, you may have taken out a second mortgage on the home or had mechanic’s liens, child support liens or legal judgments recorded against you – events that could result in serious financial losses to an unprotected lender. Regardless of the time since you purchased or refinanced your home, a myriad of title defects could have occurred. While you may not have any title defects, many homeowners do. The only way for a lender to adequately protect itself is to get a new lender’s policy each time you refinance your home.

The ONLY time you may not be required to get a new title insurance policy is if the current mortgage loan was re-written by that lender, changing terms or interest rates, but NOT the loan amount.


At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: Getting a Visual on Closing Costs

Getting a Visual on Closing Costs

 

Purchasing a home is exciting. Finally, all of your house hunting and negotiating has paid off! However, once escrow begins the excitement can change to frustration, particularly if you are not ready for the closing costs that quickly accumulate. Watch this video to have a good mental picture of the costs that you’re likely to incur.

Closing costs simply refer to the fees related to 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. There are three kinds of costs to keep in mind when purchasing a new home:

Loan Costs

  • Loan Fees
  • Interest
  • Insurance
  • Reserves

Title Costs

  • Title Search Fee
  • Title Insurance
  • Closing Fees

Records Costs

  • Recordation
  • Stamps
  • Taxes

Do yourself a favor and discuss closing costs in advance with your real estate or mortgage person.

At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: What Does My Closing Date on a Contract Mean?

What Does My Closing Date on a Contract Mean?

What Does My Closing Date on a Contract Mean?

So often in a closing transaction we are most concerned with the date we close. A contract will have that date so all parties know what to work towards.

The closing date is set and agreed upon on the contract signed by all parties, usually several weeks from acceptance. This is negotiable between the parties and can change based on agreements made in writing.

When you sign a contract with a closing date of “on or about December 10,” that would typically mean you are planning to close that week, perhaps as early as December 6th or 7th, or closer to that exact date of December 10th. It does not mean that you will close 3 or 4 weeks earlier.

Although the closing date can be sooner or later due to circumstances, all parties must agree, and of course, all conditions and title work must be processed and completed.

For example, when you make a date to meet someone for dinner, usually you’ll plan where to meet and set a time, say around 7ish. You plan to arrive sometime as early as 6:50PM or maybe as late as 7:10PM and that is acceptable for the time you set…7ish. That doesn’t mean you are meeting at noon for lunch or at 7AM for breakfast.

Don’t just choose a date casually. Choosing the right date can ensure a smooth closing and help reduce your closing costs. Choosing the wrong date puts you at risk of not closing on time, needlessly complicating your closing.

At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: 3 Ways to Help Have the Fastest Closing Ever

3 Ways to Help Have the Fastest Closing Ever

3 Ways to Help Have the Fastest Closing Ever

Closing fast? That’s a thing of the past!

In today’s tremendously regulated and monstrously documented charted process, you should count on your mortgage-closing timeline reaching or perhaps even exceeding two months, depending on your lender and/or the banking rules.

That being said, here are 3 ways to help you shave off some valuable time!

1. Hire a Reputable Title Company

A title company is essentially a trusted third-party account holder through which money for the home purchase is received, held and disbursed. Selection of a title company is the key, as is maintaining an open line of communication.

The fastest you can get a title commitment (title search) might be a day to two days. The typical time frame would be three to five days. When you call, you may want to ask them: ‘How long is it currently taking to get things done?’ Sometimes they’ll make an exception depending on your needs. If you don’t ask, you won’t know.

When in doubt, call two or three companies for estimates.

Time saved: About five days, if you find a solid title company that can handle your business.

2. Respond Promptly to Requests for More Information   

This often is the point in the process—after you’ve seemingly answered every question and turned over every shred of your financial information—where you may become the most frustrated.

Don’t worry: The end should be near. Don’t let your exasperation over any last-minute plea for more records stall your process. Even if a missing item seems insignificant, it will require the file to go back into the queue for an underwriter to review yet again. If the request seems vague, speak to your loan officer to make sure you understand exactly what is being requested from you.

Time saved: It’s up to you. Just drop everything and get it done—lenders don’t typically assume you’re going to take two weeks, they assume you’re going to do it in a day or two.

3. Line Up Your Insurance Early

On the same day your contract is given to the title company, you should be calling to get quotes and obtain homeowners insurance, plus any other necessary coverage such as a flood policy.

The policy will not take effect until closing, so you aren’t paying for coverage just because you obtained a quote or the policy in advance. You may need to revise the policy if the coverage is deemed to be insufficient or if the documentation is not worded properly. So a jump start is always a plus.

Time saved: Five to seven days, if you don’t wait to purchase the policy.

At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: Overpricing a Home Can Be More Damaging Than You Think

Overpricing a Home Can Be More Damaging Than You Think

Overpricing a Home Can Be More Damaging Than You Think

When it comes time to put your house on the market, it’s wise to look to a trained real estate professional to help you with things like advertising and—more importantly—pricing! It’s not surprising that the number one reason why houses don’t sell is because they are overpriced. When deciding what price to list your home at, it is important not to be emotional about the decision. You need to keep in mind the end goal, which is to sell the house. Here are a few more reasons why overpricing could be devastating to selling your home.

It Takes Too Long to Sell

If you’ve priced your home on the high side of the actual market value, there is a good chance it is going to be sitting on the market for quite some time. That’s not a good thing. One of the first questions potential homebuyers ask their realtor when they first view a property is “how long has it been on the market?” The main reason homes sit on the market for months at a time is because of the price. However, it could also give buyers the impression that there could be something else wrong with the house and it’s not even worth their time to look at. Also, once it sits on the market for a few months, it may not come up in property searches as often since most realtors and potential buyers are looking for newly listed homes.

Scares Away Potential Buyers

A lot of homebuyers out there are working with trained and experienced real estate agents when looking for their next home. Pricing your home higher than market value will have the realtors looking right by your house without a second glance. And they should. It’s their job to find their buyers the right house at the right price, and many people are looking for a deal.

Appraisal Issues

Let’s give you the benefit of the doubt and say you find the one person out there willing to pay well over market value and give you exactly what you’re asking for the property. In your mind you’re thinking the war is over. However, what may be the biggest obstacle is still yet to come. If the buyer is getting financing from a bank, all lenders require you have an appraisal on the property. And even if the buyer is paying cash sometimes they will want to have an appraisal to make sure they are paying fair market value for the home. The appraiser will use comparable homes that have sold in the area to the fair market value of the home, and once his number comes back lower than the sales price, good luck getting anyone to pay your asking price.

At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: 6 Steps to a Perfect Fort Myers Real Estate Closing

6 Steps to a Perfect Fort Myers Real Estate Closing

6 Steps to a Perfect Fort Myers Real Estate Closing

There are a whole lot of moving parts in a Fort Myers Real Estate Closing, so here at Title Junction we recommend using a local real estate agent and local mortgage lender so we can all work as a team to facilitate a smooth closing.

The closing process can be a bit nerve-wracking even for a seasoned homebuyer or seller, but fear not, our Title Junction team has your back! Sit back, Title Junction is handling your real estate closing!

1. Choosing a Closing Agent

Picking a closing agent is an important decision in the process! As the seller in the transaction, where you close is 100% up to you! Here at Title Junction we have two real estate title closers to make sure that your real estate closing is smooth sailing. If you are working with a real estate agent they might offer to place a title order with a closing agent as soon as your sales contract is accepted. Remember, it is your choice, so choose Title Junction!

Why is the closing agent in the transaction important? What does the closer actually do? Well that is a loaded question and we won’t bog you down with the particulars. Basically the closer will oversee and facilitate the home closing process and make sure the timing is right for all of the moving parts that make up the process. The closer is like your own personal circus ring master; it is their job to make sure there are no unnecessary delays in your real estate closing.

2. Draw Up a Contract

First, a contract is drafted, which your real estate agent reviews for completeness and accuracy. The agent will also advise of how to put your deposit into an escrow account, where the funds will remain until closing. Generally the closing agent will hold all monies for closing!

Most sellers and buyers believe that the contract comes first, but you will need to know where your contract will close, so do your research on your closing agent first!

3. Title & Lien Search Is Conducted

Once the contract is received our Title Junction team will do a title & lien search of the public records and municipalities. This will identify any issues with the title such as liens against the property, utility easements, judgements and such. All items discovered will then be processed and make sure the person selling the property actually owns it. This is one of the most important steps of the closing process.

4. Know About Title Insurance

Unlike other insurance policies, title insurance is purchased with only ONE PAYMENT.

There are two kinds of title insurance policies (coverage): a Lender’s policy, which covers the lender for the amount of the mortgage loan; and an Owner’s policy, which covers the buyer for the value of the property.

As a buyer, if you are obtaining a loan, the bank or lender will require that you purchase a Lender’s policy. However, it only protects the lender.

Hint: If it’s good enough for the lender to require title insurance it’s good enough for you as the buyer to require Owner’s title insurance for yourself. Protect your property rights.

5. The Closing

Once the title process has been completed and closing documents have been prepared and approved, Title Junction’s team will arrange a closing time for you to visit our office.

Our well-trained closing team, which consists of a Notary Public, will assist in signing all necessary documents. All of our closing staff work closely with one another from start to finish for your closing.

One of Title Junction’s licensed title agents will be available in the event any questions arise during your closing; simply ask the staff and we will be happy to facilitate.

6. Post Closing

After all documents are signed and filed in the county records, Title Junction’s excellent post-closing specialist will put together copies of all signed and recorded documents.

You will also receive a letter from our office with your title policy shortly after the closing.

At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: What Do I Bring To Closing?

What Do I Bring To Closing?

What Do I Bring To Closing?

Closing day.

Whether you’re the buyer or seller in the Fort Myers or Cape Coral areas, it’s a big day!  You are either becoming the owner of a property, or you are surrendering ownership in return (ideally) for financial gain.   Perhaps your transaction went smoothly, or perhaps there were bumps in the road, and yet it’s finally come down to the last bit of signing documents.  It’s almost over, and the last thing you want are delays because you didn’t have everything you needed at the closing table.

What to Bring to The Closing

Photo I.D.: All parties must bring official, government issued photo I.D. such as a driver’s license or current passport.

Cashier’s Or Certified Check: You need a bank issued check or checks to cover your down payment and any closing costs you are responsible for paying.   The title company cannot accept a personal check or cash, so it is important to plan in advance and bring a certified or a cashier’s check made payable to the title or closing company.  Federal law requires that you be told the amount you need to bring to closing at least one day before settlement, so you should be able to pinpoint the exact amount for the check(s).

Your title agent can also tell you whether you should bring one certified check or two. In some instances, wiring funds is permitted, however, be sure to do so with plenty of time. Your closing will be delayed if funds are not available when you get to the signing table.

Proof of Insurance: Buyers must provide proof of insurance if required by the terms of the sale or by the lender.  The closing agent needs to see documentation proving your coverage is in effect for one year. Even if your real estate agent tells you that the title company already has a copy, play it safe and have your proof of insurance with you.

Outstanding Documents:  In the days before your closing pay very close attention to the instructions from your title or closing company.  They will let you know if any additional documents are needed.  If you have a copy of your sales contract, you can bring it with you to ensure all numbers and terms match the purchase agreement.

Items to Access the Home: If you are the seller, you will need to surrender all copies of all of the keys to the house, as well as garage door openers and alarm system codes.  If you are responsible for any costs not covered by the proceeds of the sale, you must also bring a certified or a cashier’s check made payable to the title or closing company to cover those expenses.

Patience: Prior closings may run behind, wires may be delayed, paperwork can get stuck in printers.  Chances are you’ve waited anywhere from a couple of weeks to a couple of months for this closing, a couple more hours may be frustrating, but worth it.  Read a book, answer emails, play a game on your phone, anything to pass the time and keep yourself calm.

Whether you are the buyer or seller, being prepared will keep you calmer and allow the closing to proceed smoothly.  If you are not sure you have everything you need, consult your title company representative.  Finally, if you are buying a house, bring a keychain for those special keys to your new home!

At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: Can My Settlement Charges Change?

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