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Understanding the Basics of Short Sales

Understanding the Basics of Short Sales

If you’re thinking about purchasing a short sale property you probably have a few questions, such as whether the title is free and clear or if liens could present a problem. These are very important questions that you want to have fully answered before making a serious offer, since they’ll affect your ownership.

As the purchaser, you are not responsible for any lien on the home—the owner is still the responsible party for any debt or obligations. Sometimes these “obligations” can become deal breakers in a short sale, especially if the owner is financially strapped or the lender is unwilling to assist. If you were to close on a short sale and these “obligations” were NOT satisfied, then you would most likely be held accountable for them. These obligations could include property tax liens, IRS liens, contractor liens, second mortgages, or even HOA liens.

You must remember that a short sale is NOT a foreclosure. In a foreclosure, most obligations would or could possibly be wiped clean. Not so in a short sale. Since a short sale occurs when a property is sold for less than the original owner owes on it, it can be a complicated business, since lenders have to accept less than the amount they loaned to the original homeowner. And because obligations must be satisfied in some way or another, some hefty negotiating is usually required.

In a short sale, the title is rarely free and clear, so you’ll need to do your homework and have open communication with the title company. Once an approval is completed, ask for a title commitment, complete your due diligence, and ask questions if you do not understand something. You may even need to assist your seller in a negotiation.

Be patient, short sales tend to suffer failure rates and sometimes simply can’t close in time to prevent foreclosure. A persistent lien holder can play a key role in delaying the closing of a short sale. If all parties are willing to be a part of the process then you can come out “free and clear!”


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: Defining Title Insurance and Escrow

Defining Title Insurance and Escrow

Defining Title Insurance and Escrow

Buying and selling real property can be a mind-boggling experience in Cape Coral, Fort Myers, or anywhere else in Florida. Unfortunately, making the process more user friendly is not something that’s going to happen soon, so learning some basic terminology goes a long way toward relieving the headaches associated with buying or selling real estate. Whether you’re looking to purchase or sell, understanding what title insurance and escrow are will assist you in your real estate ventures.

The Value Of Title Insurance

While title insurance might appear to be an unnecessary expense, it’s almost always a requirement if the buyer is purchasing property with someone else’s money. The reason for this is that even though the purchaser receives a deed for the property, it doesn’t always mean that there is only one legal owner. Prior owners, their spouses, partial owners, and creditors who have a stake in the property could come forward at any time and claim their share of the property, leaving the purchaser with a debt they are not responsible for. Title insurance protects them and their lending institutions from financial loss due to unforeseen title defects and liens.

A title insurance company will defend the insured if a lawsuit is filed. Additionally, it will reimburse insured parties for monetary losses if there are errors on the property that need to be cleared from the chain of title before the purchaser and their lending institution can have a clear title on the property.

Protecting Your Interests With An Escrow Account

Although escrow is not formally called insurance, its basic purpose is to insure that a stipulation or set of stipulations is met. In escrow’s most basic form, it is a deposit of funds, a deed, or any other item by one party for delivery to another party upon completion of set conditions or events. The most common usage of escrow is for the down payment of a home purchase.

Title insurance and escrow accounts are terms many first time property buyers and sellers have never heard and ones that even some second and third time property buyers and sellers may not understand. Working with an established title company can make the difference between a smooth transaction and one that’s riddled with problems and unanswered questions.


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 Is A Short Sale?

What Is A Short Sale?

When a lender releases an existing mortgage for a payoff that is less or ‘short’ of the total amount due, the transaction is called a ‘short sale.’ Lenders sometimes accept short sales as an alternative to repossession and foreclosure, which can be expensive.

Likewise, a short sale avoids foreclosure and credit-rating reductions for the seller. Short sales may be prompted by a seller’s inability to make payments, or the property value dropping below the mortgage balance – ‘underwater’ – or possibly both.

Short sales are usually initiated by the homeowner, but lender approval is required to proceed. Buyers typically negotiate short sales with sellers, but lender approval is also required to finalize a short sale. Short sales are more complex and may take longer than conventional purchases.


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: Wire Fraud: Scammers Are Targeting Your Real Estate Transaction

Wire Fraud: Scammers Are Targeting Your Real Estate Transaction

Wire Fraud: Scammers Are Targeting Your Real Estate Transaction

A common way to transfer large sums of money from one party to another is via wire transfer, particularly for real estate transactions. And why not? It’s quick, it’s direct, it’s…being targeted by wire fraud criminals?

Yes, the same kinds of criminals who snatch credit card numbers and identities are now targeting the mother load of all digital heists—your real estate transaction. Even some of the cheaper real estate deals commonly place in the hundreds of thousands of dollars, making them a desirable target for these cyber criminals.

But how do they do it? Surely no one would be foolhardy enough to release such vital information to a complete stranger or in a public forum.

Remember what we said about these criminals being the same kind as those who steal identities? That’s exactly how they prefer to commit wire fraud. After infecting your real estate agent, attorney, or title agent’s email with undetectable malware, they keep a close eye on your communication until it’s almost time to close. Then they assume the identity of your trusted agent and send you a very official-looking email with new wiring instructions, saying that there’s been a last minute change. A blatant warning sign is when they demand immediate action.

Worse yet, some of these criminals will actually call you, posing as someone from your title company to assure you that the wire transfer request is legitimate. And unlike fraud relating to bank accounts and credit cards, banks will not reimburse you for funds that were stolen via wire fraud, making it an even more devastating loss.

However, there are ways to thwart wire fraud. If you receive an email containing wiring instructions, call your real estate agent and/or title company using numbers that come directly from their website or another credible source, not ones provided via email. They’ll be able to verify whether the wire request is valid or not.

In addition, some banks will allow you to set up security measures such as voice verification and other extra steps to thwart fraud. Above all, it’s important to be vigilant. Buying or selling real estate can be a complicated business, but don’t ever let yourself be pressured into sending a wire without proper verification.


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 Get a Discount on My Title Insurance?

How Do I Get a Discount on My Title Insurance?

How Do I Get a Discount on My Title Insurance?

The only time you can get an outright “discount” on title insurance is if it is being reissued, meaning that you previously had a title policy. In Florida, the requirements to obtain the reissue or reduced rate for your title insurance are pretty straight forward.

You only need your prior title policy for the identical land involved in the current transaction, so long as you are the person on title. You are entitled to the reissue rate whether the new transaction is insured by the prior insurer or a new insurer. For a sale/purchase the policy must be within 3 years to date. For a refinance the policy never expires for a discount.

Title Insurance Reissue Rates

The Florida Administrative Code sets the premium for title insurance policies issued within 3 years of a previous policy (for sales/purchase) at:

  • $3.30 per thousand for policies up to $100,000
  • $3.00 per thousand for policies over $100,000 and up to $1 million
  • $2.00 per thousand for policies over $1 million and up to $10 million
  • $1.50 per thousand for policies over $10 million

In order to qualify for these rates, the title agent must include proof of the previous title insurance policy. Failure to include the proof of prior coverage within 3 years could result in the title insurance agent and agency being found to have violated Subsection 627.780(1), Florida Statutes, for quoting, charging, collecting or accepting a premium for title insurance that is other than the premium implemented by the Florida Administrative Code.


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: Ways to Hold Real Estate Title

Ways to Hold Real Estate Title

Ways to Hold Real Estate Title

One of the most important choices you will make as a property buyer is how to hold real estate title to your property. Holding title to a property refers to how you own the property and the rights that go along with it. Along with choosing how to hold title, buyers have the opportunity to choose a title agency to manage the title work. Many title agencies offer notary and escrow services as well and some buyers like having all of these services under one roof. 

There are four basic types of home ownership, or ways to hold title, in the United States. The primary impact these choices have on the property owner has to do with how the property is passed on after death.

Fee Simple is the most common and, as the name implies, simplest way to hold title to a title property. This type of ownership provides full rights of possession at present and in the future to the person named on the deed. This ownership lasts until the property is sold.

Joint Tenancy with Right of Survivorship is commonly used by those who purchase a home together. With this type of real estate title, each owner has an equal share of the property. The Right of Survivorship portion of this type of title means that when one of the owners dies, the surviving owner automatically receives the deceased’s portion of the property. The property is not disposed of in a will and does not pass to heirs of the deceased.

Tenancy in Common is similar to Joint Tenancy but without the Right of Survivorship. Each owner has a specified interest in the property. They may have equal or unequal shares. While their interests may be unequal, they have 100% use of the property, no matter what their shares actually are. Since they both have 100% use of the property, it cannot be sold without the others’ permission, but an owner may transfer his or her interest in the property without the permission of the co-owners. The key component of this type of ownership is that each owner can specify whom the property is to go to upon their death in their will. It does not automatically pass to the co-owner.

Tenancy in the Entirety is restricted to married couples. It is also called the Community Property. Similar to joint tenancy, each partner owns 100% of the property and needs the consent of their spouse in order to transfer ownership of the property.

The title agency plays an important role in your real estate transaction. From conducting a title search to holding escrow funds to providing notary services, your title agency is intimately involved with your property transaction. 

No matter how you ultimately decide to hold your real estate title, you will need to have a notary public oversee the signing of the transaction documents. A notary is a public official licensed by the state to perform acts in legal affairs, primary of which is serving as witness to signatures on documents such as real estate forms, mortgages, deeds, and titles.

The deed will need to be filed appropriately with your county recorder or registrar of deeds. In some states, the signing of the deed must also be witnessed.

The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.


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: Understanding the First Page of Your Closing Disclosure

Understanding the First Page of Your Closing Disclosure

 

In order to fully understand your home loan, it’s important to understand some of the key parts of the documents associated with it. Let’s talk about your closing disclosure—specifically, the first page of it.

  • The Loan Amount: This is the total you will actually borrow.
  • The Interest Rate: This does NOT include the fees factored into the annual percentage rate (APR) on Page 5.
  • Projected Payments: This will show the chief cost components – Principal & Interest, Mortgage Insurance, and estimates of your Escrow Payments over the life of the loan. You may see different columns for different periods if changes in terms such as mortgage insurance change payment totals.
  • Closing Costs: This summarizes your loan closing expenses, and Cash To Close adds the additional amounts due to give you the cash balance you will need in 3 business days.

If your loan has a penalty for pre-payment or includes a balloon payment, Page 1 will summarize the terms.


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 Necessary Are Title Insurance and Homeowner’s Insurance?

Burrowing Owls: What Property Owners Should Know About Them

Burrowing Owls: What Property Owners Should Know About Them

Burrowing owls are not only the official city bird of Cape Coral—they’re considered a threatened species and are protected under the Federal Migratory Bird Treaty Act. Because of their protected status, many Cape Coral residents have differing opinions about one of the smallest owls in the world. On the one hand, they are adorably tiny, non-aggressive, and eat pests like cockroaches, snakes, and rodents. On the other, the presence of these cute little buggers can complicate things for property owners if the birds have decided to take up residence on a piece of Cape Coral property.

Contrary to popular belief, construction can still take place on a property with burrowing owls in residence. There are just a few guidelines that have to be followed or—in a worst case scenario—a special removal permit to be obtained from the Florida Fish and Wildlife Conservation Commission (FWC).

First, a site inspection must be conducted to determine the exact locations of any owl burrows on the property and any surrounding vacant properties, and a burrowing owl/gopher tortoise affidavit must be submitted in order to obtain building permits. So long as your construction plans don’t disturb the area within a 10 foot (33 feet during nesting season) radius around the nest, you have the blessing of the FWC to move forward with your project, so long as you properly mark or rope off the area to avoid having construction equipment encroach on the designated burrow area.

However, it can be problematic if the owls decided to settle down smack dab in the middle of the lot—you can only move a building so far before it ends up on the neighbor’s property. In special cases like these where there’s just no feasible workaround, a nest removal permit can be issued by the FWC, though it can take six to eight weeks to obtain. However, even with an approved permit, the nest cannot be destroyed during nesting season, which runs from February 14th to July 10th. Essentially, you’ll have to plan your construction project around that time period, even if the nest is uninhabited.

If a burrow is destroyed legally in order to make way for a construction project, it’s strongly encouraged to create a new ‘starter burrow’ elsewhere on the property. And let’s be real; once construction is complete, who wouldn’t want to have those feathery little faces pop out to greet them every once in a while?


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: Title Junction’s New Website

Title Junction’s New Website

Title Junction’s New Website

We’re excited to announce the launch of our redesigned website! Not only do we have a new look, but we’ve added exciting new features to enhance the online experience of our clients.

As a leading provider of title and closing services in Florida, our priority is to give our clients the real estate / closing relationship they deserve. Title Junction’s new website reflects this commitment by providing clients with easy navigation and more options to get their questions answered.

Our new FAQ Page provides visitors with answers to some of the more frequently asked questions we receive about title insurance and the closing process, and we’re particularly excited about our newest interactive feature, which we’ve affectionally nicknamed ‘Jenbot.’ When visitors click on the chat icon, Jenbot will be happy to chat with them and answer general questions, while passing on some of the more challenging inquiries to a team member at our office.

We’ve completely revamped our Video Library, which now boasts categories and a grid layout that makes it easier for visitors to find and view helpful videos about a variety of real estate topics ranging from how to choose a mortgage lender to house-hunting tips.

Our new Outreach Page provides visitors with a chance to better understand Title Junction’s values, and it introduces the organizations we’ve partnered with to enrich the local community.

Additionally, we’ve added an accessibility widget that allows visitors with disabilities to navigate our website, granting them access to a variety of tools to change text size, color contrast, and even have the page read aloud, among other features.

And of course we still offer our Net Sheet Calculator, where you can get quick quotes of your closing costs.


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 Necessary Are Title Insurance and Homeowner’s Insurance?

How Necessary Are Title Insurance and Homeowner’s Insurance?

How Necessary Are Title Insurance and Homeowner’s Insurance?

There are many things that happen on a day-to-day basis that can affect you or your home. What can we say? Life happens. So why not be insured for life’s mishaps? Getting both title insurance and homeowner’s insurance covers you on practically every front when it comes to owning a home.

What is title insurance? Can it really help me?

Title insurance serves as protection against any liabilities on the ownership of your property and is are available to homebuyers every time they purchase property. Also known as a risk policy, your policy will cover you from the time of closing to any event that has happened in the past. Unlike most other types of insurance, it’s a one-time fee.

Getting title insurance is one of the most crucial steps homebuyers take when closing on a property. With title insurance, you can rest assured that your claim to the property is protected. Any title company worth their salt will be able to explain what their policies cover so that clients are well-informed before signing.

What about homeowner’s insurance?

A homeowner’s insurance policy is a source of financial protection that insures the home itself and any possessions within from disasters such as flood, fire, and theft. It also serves as protection if you or a family member is legally responsible for property damage or injury to others.

In contrast to title insurance, homeowner’s insurance covers you in the event of something happening in the future, and you have to pay a monthly premium. Additionally, there are many different types of homeowner’s insurance policies. Check with your local agents to compare which homeowner policy best fits your insurance needs.


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 Is RESPA?

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