My Offer Was Accepted, And We Signed Our Contract, What’s Next?
You should inform your Real Estate Agent, and Loan Officer, if financing, of the closing company you choose to handle the title insurance on the property.
Think of Title Insurance as your safety net. Title insurance is a type of insurance that protects home buyers and lenders from financial losses related to defects in a property’s title. When you purchase a home, the title is the legal right to own that property. Title insurance ensures that you have a clear title, meaning there are no unresolved issues that could affect your ownership.
For example, if a previous owner didn’t pay their property taxes and a lien was placed on the house, title insurance would cover the costs associated with resolving that lien. Similarly, if someone claims they have a right to the property due to an undisclosed heir or a missed mortgage, title insurance would provide financial protection.
In essence, title insurance gives homebuyers peace of mind by safeguarding against potential legal issues that may arise after the purchase, making it a crucial part of the homebuying process.
Absolutely, Consumers get to choose who is handling one of the most important, and more than likely, biggest investment.
While your Real Estate Agents and Loan Officers are a great resource as they work with many providers, and can have specific companies they have good experience with. You should be provided with a list of at least three providers to choose from.
It is important to know that YOU are free to choose whatever company YOU want!
A lien on title is a legal claim against a property that gives a creditor the right to take possession of the property if a debt owed by the owner is not paid. It serves as a security interest for the creditor and can affect the property’s marketability.
For example, if a homeowner fails to pay their property taxes, the government can place a tax lien on the property. This means that if the homeowner sells the house, the tax debt must be paid off from the sale proceeds before the owner can receive any money.
Another example is a mortgage lien. When a homeowner borrows money to buy a house, the lender places a lien on the property until the mortgage is fully paid. If the homeowner defaults on the loan, the lender can foreclose on the property.
Liens can complicate the sale of a property, so it's important for homebuyers to choose the right title company to conduct thorough title searches to identify any liens or encumbrances on the property. We can help resolve these issues before closing, ensuring that you receive a clear title. Additionally, we will offer title insurance, which protects you from future claims related to any undiscovered liens.
In summary, understanding liens and working with a trusted title company helps new homeowners avoid potential pitfalls and ensures a smoother and more secure property transaction.
In a real estate transaction, the responsibility for paying the title insurance premium can vary based on local customs, negotiations between the buyer and seller, and state laws. Here are some clear and concise facts to help educate a new homebuyer on this topic:
1. **Common Practice**: In many areas, it is customary for the seller to pay for the owner's title insurance policy, while the buyer is responsible for the lender's title insurance policy. However, this can be negotiated.
2. **Negotiation**: The responsibility for the title insurance premium can be negotiated as part of the purchase agreement. Buyers and sellers can agree to split the cost or have one party cover the full amount.
3. **Local Variations**: Different states and even different counties may have varying norms regarding who pays for title insurance. It's essential for buyers to check local customs and practices.
4. **Title Insurance Purpose**: Title insurance protects against potential defects in the title, such as liens or claims against the property, which could impact ownership rights. Since it provides protection primarily to the owner, it often makes sense for the seller to cover the owner's policy.
5. **Closing Costs**: Title insurance is considered part of the closing costs, which encompass various fees and premiums related to the transaction. Buyers should budget for these costs and understand that title insurance is a typical expense.
6. **Importance of Understanding**: Buyers should clarify who is responsible for paying the title insurance premium early in the negotiation process to avoid surprises at closing. This can also affect the overall affordability of the transaction.
By understanding these key points, new homebuyers can make informed decisions during their real estate transactions.
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Title insurance is essential for new homebuyers for several reasons:
1. **Lender's Policy**: When you take out a mortgage, the lender requires a title insurance policy to protect their investment. This policy ensures that the lender's interest in the property is secure and that they hold the "First-Lien Position." This means they have the first claim on the property in case of any financial issues, such as foreclosure.
2. **Owner's Policy**: An Owner's Policy protects you, the buyer, by safeguarding your investment in the property. This coverage ensures you are protected against any claims or issues that may arise regarding the property's title, including hidden defects, liens, or disputes over ownership.
3. **Peace of Mind**: Title insurance provides peace of mind, knowing that you are protected from potential legal challenges or financial losses related to the property's title. This can save you from costly legal battles or unexpected expenses down the line.
4. **One-Time Premium**: Unlike other types of insurance that require ongoing payments, title insurance is a one-time premium paid at closing. This means you have lifelong protection against covered issues related to the title.
5. **Protects Your Investment**: By having both the Lender's and Owner's Policies, you ensure that both your financial investment and the lender’s interests are protected, making your home purchase more secure.
In summary, title insurance is a crucial component of real estate transactions, protecting both your investment and the lender’s interest, providing essential security for your new home.
Our office will reach out to let you know we have the contract and your title search is ordered. The title search takes 5-7 business days to be received, depending on the property and complexity of the search, that can vary.
You will be asked a series of questions so we know how to proceed on your transaction.
Example:
Our office issues a form to fill out with information for you to make the choice that fits your circumstances.
The lender will work on issuing a “title request” and sending it to us. This outlines the terms of the lender to the title company.
Now we wait!
Please feel free to contact the office if you have any questions in the interim, but there is a “pause’ in communication from us until we receive the search and have a clearer view of the next steps.
When the title search returns, several key steps take place in the homebuying process:
1. **Thorough Review of Title Search**: The title company will conduct a detailed review of the title search results. This involves examining all liens, encumbrances, and claims associated with the property to ensure they are accurately documented.
2. **Preparation of Title Commitment**: Once the review is complete, the title company will compile the findings into a document called the "Title Commitment." This document outlines the current status of the title, including any liens or issues that must be resolved before the property can be transferred to the buyer.
3. **Sending Documents to the Lender**: If you are financing your purchase with a mortgage, the title commitment and other required documents will be sent to your lender. This allows the lender to verify the title's status and proceed with the loan process.
4. **Providing the Buyer with Title Commitment**: You will receive a copy of the title commitment from the title company. This document is crucial as it details any existing liens or claims on the property and confirms that the title is in a condition suitable for closing.
5. **Cash Purchase Process**: If you are purchasing the property with cash, the title commitment will be sent directly to you without involving a lender. This document still serves as an important record of the title's status and any potential issues.
6. **Resolving Any Issues**: If the title commitment reveals any liens or encumbrances, these must be addressed before closing. The seller may be responsible for clearing these issues, allowing the transaction to proceed smoothly.
7. **Finalizing the Transaction**: Once all issues are resolved and the title is clear, the closing process can move forward. The title commitment will provide the necessary assurance for both you and your lender (if applicable) that the title is ready for transfer.
In summary, when the title search comes back, the title company reviews it, prepares the title commitment, sends necessary documents to your lender, and provides you with a copy. This ensures that the title is clear for the transaction, whether you are financing your purchase or paying with cash.
A title commitment shows everything about the property's title before you buy it. Here’s a simple breakdown:
1. **What It Is**: The title commitment is a document that outlines the status of the property's title. It tells you if there are any problems or liens (like debts) attached to the property.
2. **Main Parts**:
- **Property Description**: It includes details about the property, like its address and boundaries.
- **Ownership**: It shows who currently owns the property.
- **Liens and Claims**: It lists any liens or legal claims against the property that need to be resolved before you can buy it.
3. **Why It Matters**: The title commitment helps you know if the property is safe to buy. If there are issues listed, they need to be fixed before the sale can go through.
4. **Next Steps**: Once you receive the title commitment, you and your lender (if you're getting a loan) will review it. This helps ensure that everything is clear and ready for closing.
In summary, think of the title commitment as a checklist that helps you understand the property’s title and ensures there are no problems before you make your purchase.
The Title Commitment is broken into Schedules:
Schedule A: lists the property address, the title policy amounts for the current transaction, your information and how title will be held, the lender's information, the property description, and current title holders and how they obtained title. It is only required to include ownership interest for the last 24 months prior to the current transaction, but sometimes it can go back many years!
Schedule B- Part 1: this is your “checklist”. It will have current open mortgages, judgements, liens, etc. It also lists standard requirements associated with issuing title like obtaining child support report, taxes, water and sewer certification. All of the things that could affect your right to ownership.
Schedule B-Part 2: is the “exceptions” portion of the policy. This section lists all the things that will not be covered by the issuing title insurance company. Most exceptions are standard, like water or mineral rights, and unrecorded liens, rights-of-ways and easements. The exceptions portion of the Title Commitment are the items that the issuing company will not pay for or help with legal representation. You should read and ask questions for clarity.
Exhibit A - this is the properties legal description, tax index number and identifying address. This is what YOU are buying!
Now we wait… again!! During this time, you should be communicating with your lender to be sure they have what they need to complete your loan.
During this time, some of the tasks we are working on:
**Ordering Property Tax Information**: to ensure there are no unpaid taxes.
**Water and Sewer Certifications**: to confirm there are no outstanding bills.
**Seller’s Loan Payoff Statement**: we obtain the amount owed on the seller's mortgage.
**Coordinating with Lenders and Agents**: to ensure all documents are in order and keep everyone updated.
**Preparing Closing Documents**: we prepare documents detailing financial aspects of the transaction.
These tasks help ensure a secure and smooth home purchase process.
Congratulations!! Those are the magic words we need to hear to schedule your closing. Our office will contact you to schedule a time to sign the required documents issued by the lender and all other required documents to make sure your transaction is finalized correctly.
While we prepare for your closing, we have to coordinate with the lender to get your final closing amount, or “Cash to Close”. Once we finalize that, we contact you with further instructions, like location of closing, items to bring with you to closing (like photo ID) and the amount required to close.
Closing funds are either in the form of a cashier’s check or wire. Please be sure to discuss your needs for obtaining your closing costs with us so we can give you the correct information.
Prior to coming to your closing, you should have completed a final walk through of the property with your Real Estate Agent. If your lender has hybrid closings (documents that can be signed electronically) those should be completed prior to coming to closing.
Once at the closing, we will go over the lending, title and any other documents required for obtaining your loan. It will be your time to ask questions and make sure everything is in order!
When purchasing a property with cash, you can use a notary of your choice.
On a financed transaction, we require a mobile notary service to complete the transaction. Our office can coordinate a mobile notary to come to you. This is an extra charge in addition to your closing fees.
We work hand-in-hand with a Certified Mobile Notary Company. You are free to chose another company to service your transaction, if you have a company you have worked with before.
Great question, financed transactions normally have lender requirements in order to “disburse” funds the day of closing. In order to comply with those requirements, we must have the signed documents from you and the seller. While the Deed and Mortgage won’t be filed until the next business day when we receive your original documents, the seller, agents, lien holders or title company cannot be paid until your loan is allowed to disburse. Using a mobile notary to handle the documents and upload via a secure portal, allows the transaction to be completed as if you were right in the closing room with us. Making your closing transaction seamless.
No problem, these are considered “Remote Closings”. Our office will place your order using a secure site. The servicer will find one of their certified notaries in your area, and then they are assigned.
The assigned notary will contact you to schedule the date, time and location of your choice. It is important to schedule when they call, or shortly thereafter, make sure you check your voicemails if you are in the habit of not answering unknown numbers.
Once you have the notary scheduled, we upload your documents to their secure portal, they print, bring the documents to you, the signing occurs and then they scan them all into the secure portal. Once they are uploaded into your specific file, they are reviewed and approved to ship back to us.
That’s it, done!
You get a complete, unsigned, closing package when they come to you.
YOU DID IT! You are officially a homeowner, your Real Estate Agent should have facilitated the access to the property. We #getitdone, so you can get those keys!
The official consummation of ownership is when the Deed to the property is filed at the Courthouse in the appropriate jurisdiction, our office electronically files, so usually that happens the same day. However, you leave closing with a copy of the unfiled Deed until the original is returned to you with your Owner’s Policy, this usually occurs 6-8 weeks after closing.
Remote Closings are handled basically the same as in-person; but a “day” later. Our office provides the mobile notary the return label for your executed documents, so they can be tracked. We always do next day early, to provide enough time to process them the same way as if you were in our office. This allows us to get them to the lender, as required, within the required time frame. Your Deed and Mortgage cannot be filed until we receive your original signed documents. This usually occurs the following business day. After we process and get the documents where they need to be, we will reach out and provide you a copy of your Deed via email so you have it on hand, just like at our closing table. Then, just like a financed transaction, the original Deed is returned to you with your Owner’s Policy, which usually occurs 6-8 weeks after closing.
Keep them in a safe place, especially your closing disclosure with all your closing fees, take them to your tax preparer the following tax year.
