FAQs
- How can I calculate my Real Estate taxes?
- What exactly is a Title?
- What is an Abstract?
- What can make a Title defective?
- What is Title Insurance?
- Why buy Title Insurance?
- What does Title Insurance cost?
- What should I bring when applying for a home loan?
- What should I do to prepare for my closing?
- What's wrong with trying to sell my own home?
- What should I bring to the closing?
How can I calculate my Real Estate taxes?
We offer you the real estate tax calculator for this purpose.
What exactly is a Title?
A title is the evidence or right which a person has to the ownership and possession of land. A defect in that title can be any legal right held by someone other than the owner to claim property or to make demands on the owner of that property.
What is an Abstract?
An abstract is a history of the title to a particular tract of land. It is not a title! It consists of a summary of the material parts of recorded instruments affecting the title of the real estate. The abstract may be correct but the title imperfect. The abstract is not a guarantee. It is only a record of what has been recorded. It does not judge the correctness of any item it lists. It merely reports them for an examiner to interpret. In many parts of the country abstracts are not used in real estate transactions.
What can make a Title defective?
There are many possible causes of title defects that no examination can disclose. That is because they have never been recorded and thus do not appear in the abstract.
A title insurance policy protects the owner against all these hidden risks, those risks listed below and many more.
- Fraud - False claims of ownership, forged deeds, wills signatures, conveyances, instruments, false representations, false records of all sorts, illegal acts of trustees, guardians, administrators, and attorneys.
- Human error - Errors in copying, indexing, recording; errors by administrators, executors, trustees, guardians and attorneys; destruction of records.
- Improper deeds and wills – Deeds by persons of unsound mind, minors; deeds delivered after death or without grantor's assent; invalid, suppressed, erroneous wills, missing heirs, unsettled estates.
- Liens and other rights - Liens for unpaid estate, inheritance, income, property and gift taxes; homestead rights, community property rights, irregular court proceedings, court opinion reversals, lack of court jurisdiction; defective foreclosures.
What is Title Insurance?
Title insurance is a contract to protect an owner against losses arising from defects in the title to real estate owned. If the title is insurable, the company guarantees the owner against loss due to any defect in title or expenses in legal defense of the title pursuant to the term of the policy.
Why buy Title Insurance?
When a person buys a car or consumer goods, they seldom need to know whether the former owner is married, single or divorced; whether they have paid their taxes or are involved in a lawsuit. But when a person buys a home it is necessary to have all that information and much more. For while he or she may own the property, others may also have rights in the same real estate.
A competent investigation can uncover such items as unpaid taxes, easements, restrictions, and more. However, all items affecting the title are not contained in a single book, in a single office, or even a single city. Then, add to this, the possibility of human error at a multiplicity of points. Yet what is not in the public record often causes title problems. For all those reasons and many more, a property owner needs the protection afforded by title insurance.
What does Title Insurance cost?
The cost is directly related to the value of the property. The higher its value, the more coverage is needed. The premium is small compared to the total purchase price. The premium is paid only once and remains in force for as long as the property is owned by the insured and continues to protect the insured on warranties after it is sold.
What should I bring when applying for a home loan?
When applying for a loan application, remember to bring the following:
Original signed purchase agreement.
- Name, address, zip code for:
a. Employers for the last two full years; current income (month/year).
b. Residences for the last two full years; landlord’s address, zip code. - Name, address, zip code and account numbers, balances, payments for:
a. Checking accounts, savings accounts, money market funds, and other cash assets.
b. All loans (include mortgages and auto).
c. Credit cards (exclude oil companies). - Value of personal property. Amount and cash surrender value of life insurance policy.
- Social Security numbers. Work telephone numbers.
- If self-employed, copies of complete tax returns (personal and corporate) for the last two years plus a current profit and loss statement and current balance sheet.
- Cash or check for appraisal and credit report(s).
- Verification of child support and alimony obligations (copy of divorce decree(s)) and verification of child care expenses (FHA/VA).
Additional for VA Loans:
- Certificate of Eligibility or, if never used, the DD-214 Separation and Discharge.
What should I do to prepare for my closing?
Although closing practices vary from state to state and within some states, at the closing of the title…The seller should be prepared with at least the following:
- Seller's copy of the contract.
- Latest possible meter reading of water, gas or electric utilities.
- Satisfaction of any mechanics liens, chattel mortgages, judgments, or mortgages that were paid prior to the closing.
- Any unrecorded instruments that affect the title.
The purchaser should do at least the following:
- Have purchaser's copy of contract.
- Have sufficient cash or certified checks to make payments.
- See that all liens that must be removed are attended to as agreed.
- Have original and mortgagee's endorsements for all fire, casualty and other insurance policies.
- Review any covenants or restrictions affecting the title or use of the property as shown in the title commitment.
- Have bills for any unpaid tax, utilities, or assessments and have interest computed up to the date of the closing.
- Make adjustments as called for in the contract.
What's wrong with trying to sell my own home?
Selling a home may appear to be easy. Most who have tried agree that it is not. The disadvantages of do-it-yourself home selling include:
- Right selling price difficult to arrive at – Besides not being in direct touch with current market trends, owners tend to see their home through prejudiced eyes preventing an honest evaluation of their property.
- Procedure has to be based on trial and error rather than experience– Extra work, confusion, costly mistakes are common results of not knowing how and in what order to handle all arrangements and details.
- Means of advertising are limited and expensive – "For Sale by Owner" ads rarely get preferred placement in the newspaper and cost owners more because they do not get a discount for frequent placements. There are also no multiple listing or referral services for individuals; they must rely heavily on lawn signs to attract buyers.
- No screening of potential buyers – "For Sale by Owner" ads and signs are open invitations to anyone to ask to see your house. Owners have no way to screen prospective buyers and are subject to drop-in-off-the-street lookers and a telephone ringing off the hook at all hours.
- Complexities of financing require a professional – Due to the complexities of financing, changing interest rates, points, terms, type of mortgage (FHA, VHA, ARM, etc.) only a professional can achieve the highest return for you.
- Negotiations on price are always tricky to handle – Without a skilled negotiator to help, buyer and seller frequently dicker unnecessarily, neither one knowing when to stand pat or when to concede. Both are afraid of being cheated.
- Paperwork involved is a headache and costly to do yourself – Mortgage arrangements, title search, legal advice and a myriad of closing details are mind-boggling and time consuming for the average person. Taking days off work to handle everything may end up costing more than money supposedly saved by not hiring a Realtor in the first place.
- Buyers are wary of dealing directly with homeowners – It is easier to speak frankly with a Realtor than to risk insulting the owner. Buyers need to feel that they are getting a fair deal on a very large investment and are hesitant to do business with a nonprofessional.
- The longer a home is on the market, the harder it is to sell by anyone – People wonder what's wrong with a house that doesn't sell in a reasonable length of time and back away from even bothering to take a closer look. Time spent trying to sell your home by yourself can make it harder to sell for the Realtor you turn to in the end.
- Your home is worth too much money to risk – It makes sense to weigh your decision very carefully about how to sell it.
What should I bring to the closing?
The seller should be prepared with at least the following:
- Valid & current government issued picture identification.
- Keys / Garage Door Opener
- Security Codes for Alarm System
- All parties who are required to sign transferring ownership
The purchaser should do at least the following:
- Valid & current government issued picture identification.
- Certified funds
- All parties who are required to sign for ownership and/or mortgage
- Have original and mortgagee's endorsements for all Homeowner's, Flood, Windstorm and any other insurance policies.
