Category: Title Insurance

Does the seller have the legal right to sell this home? Is the home’s title free of judgments, liens, or bankruptcies that would prevent the seller from transferring a clear title to the buyer? How can you be certain?

Every property has a history of owners.  That history is called an ownership chain, or more often, a title chain.  When a link in the chain has a problem, it’s called a title defect, or a cloud on the title. No matter how small the problem is, any title issue must be resolved in order to offer a clear title to the buyer.

When purchasing a home, you may view title insurance as an unnecessary cost.  However, title insurance provides protection for both the seller and the buyer against title defects. Title insurance, as the name implies, insures against property title defects or ownership defects.  Some title problems may not become apparent for years. Others can hinder the sale of your home, and may even limit who you can sell your home to.

The title company will examine public records of the home being sold, sometimes going back 50 years or more, to look for past deeds, wills, trusts, divorce decrees, bankruptcy filings, court judgments, and tax records that may be defective or outstanding. The results of the search will be compiled into a preliminary title report that will be given to the buyer, seller, real estate agent, lender, and attorney involved in the sale.

Common Issues

PUBLIC RECORDS: Mistakes and errors happen but you do not want it affecting your home. The errors can be disastrous and cause you an undue financial burden to resolve. Simple clerical or filing errors could affect the deed or survey of your property.

UNKNOWN LIENS: Prior owners of your property may have left unpaid bills. And, even though the former debt is not your own, banks or other financing companies can place liens on your property for unpaid debts even after you have closed on the sale. This is an especially worrisome issue with distressed properties.

ILLEGAL DEEDS: While the chain of title on your property may appear perfectly sound, it’s possible that a prior deed was made by an undocumented immigrant, a minor, a person of unsound mind, or one who is reported single but in actuality married. These instances may affect the enforceability of prior deeds, affecting prior (and possibly present) ownership.

MISSING HEIRS: When a person dies, the ownership of their home may fall to their heirs or those named within their will. However, those heirs are sometimes missing or unknown at the time of death. Other times, family members may contest the will for their own property rights. These scenarios – which can happen long after you have purchased the property – may affect your rights to the property.

FORGERIES: Unfortunately, we don’t live in a completely honest world. Sometimes forged or fabricated documents that affect property ownership are filed within public records, obscuring the rightful ownership of the property. Once these forgeries come to light, your rights to your home may be in jeopardy.

UNDISCOVERED ENCUMBRANCES:  At the time that you purchase your home, you may not know that a third party holds a claim to all or part of your property – due to a former mortgage or lien, or non-financial claims, like restrictions or covenants limiting the use of your property.

UNKNOWN EASEMENTS: You may own your new home and its surrounding land, but an unknown easement may prohibit you from using it as you’d like or could allow government agencies, businesses, or other parties access to all or portions of your property. While usually non-financial issues, easements can still affect your right to enjoy your property.

BOUNDARY/SURVEY DISPUTES: You may have seen several surveys of your property prior to purchasing, however, other surveys may exist that show differing boundaries. Therefore, a neighbor or other party may be able to claim ownership of a portion of your property.

UNDISCOVERED WILL: When a property owner dies with no apparent will or heir, the state may sell his or her assets, including the home. When you purchase such a home, you assume your rights as the owner. However, even years later, the deceased owner’s will may come to light and your rights to the property may be seriously jeopardized.

The Bottom Line: The experts at Title First oversee and perform thousands of closings each year. When using Title First, you can sign confidently on the dotted line knowing that all details of your title transfer and closing are in proper order. We are here to answer any questions you may have about buying or selling a home, and our team will guide you through the entire process.

Closing costs add up to anywhere from 3% to 6% of the purchase price. This means if your home is $400,000 and your closing costs are 4%, you’ll owe $16,000 at closing.

Some examples of costs common during a closing:

• Application fee — The application fee covers the cost of administering the transaction and handling the documentation. 
• Appraisal fee — A licensed appraiser inspects the home to determine its worth. This appraisal fee typically costs a few hundred dollars. 
• Credit report — As part of the due diligence to determine your credit worthiness and determine the interest rate for your loan, the lender will pull your credit report. This fee is rolled into your closing costs. 
• Homeowner’s insurance — Homeowner’s insurance is typically required to protect the home from loss or damage. Up to one year’s worth of insurance is due at the closing. 
• Private mortgage insurance (PMI) — PMI is designed to protect the lender in case you default on your loan. Until you own a certain percentage of the home, private mortgage insurance may be required by your lender. 
• Property taxes — Depending on your location, you may be required to pre-pay 60, 90, or 180 days worth of property taxes when you close on your house.
• Transfer tax — Typically a percentage of the sales price or fair market value of the house, this tax fee is collected and paid when the title passes from the seller to the buyer.
• Underwriting fee — Also known as a loan origination fee, this fee is charged by the lender for preparing the mortgage loan. 
• Title search services: A title search verifies the seller’s legal right to transfer the property to the buyer and flags and liens that may have to be cleared before the sale can be completed.
• Real estate attorney’s fees: It’s customary and advisable (and mandatory, in some jurisdictions) for both buyer and seller to hire attorneys to review sales contracts before a home sale is completed. In more complicated sales—if a home is occupied by tenants at the time of the sale, for instance, or if the sale is contingent on the seller completing certain repairs or improvements—attorneys may play a more active role, crafting contract provisions to protect their client’s interests.
• Agents’ sales commission: Real estate agents representing the buyer and seller typically split a commission of 5% to 6% of the sales price.

The Bottom Line: There are steps you can take to bring down your closing costs:

• Schedule your closing at the end of the month. Part of your closing costs is prepaid interest charges on your mortgage for the remaining days of the calendar month. If you schedule your closing toward the end of the month, you’ll only pay these charges for a few days.
• Ask the seller to cover some of the costs. In a buyer’s market, and/or if your seller is particularly eager to complete the sale, you can ask them to cover some of the closing costs.
• Compare your loan estimate and your final closing disclosure form. Check for inconsistencies and new charges. If something doesn’t look right, bring it to the attention of your lender.

Looking for, “title insurance companies near me?” Look no further than Title First Agency. We offer 20 office locations, are licensed to operate in 32 states and have strategic partnerships throughout the country, allowing us to do business in all 50 states.

Title insurance is something that can protect owners of real property events and matters that can be brought up from the past. Imagine spending your nest egg on a down payment, closing costs, and a few years of mortgage payments. Suddenly, an heir to a former owner is suing to obtain the home, arguing that it never should have been sold to you in the first place. There is no reason to worry if you have title insurance, yet many homeowners decline it. Once they know how it is created to protect them from unknown claims against their property that can pop up years down the road they are less inclined to resist.

Title insurance is much more than a lender requirement. It’s knowing that what you are buying is free of any third party claims to ownership or use of any part of it. It assures the homeowner that they are clear of anything that would affect the ability to sell or borrow against their new property.  After thousands of real estate closings here at Title First, we can give you a rundown of the most common issues we can save you from:

Mistakes on titles, especially lately, that are transferred through a sale of foreclosure without certain rulings met, thus making the transfer of the title invalid.

Mistakes within all the paperwork brought to the closing. Somewhere along the line, there may be a forged signature or recorded documents that have been signed by people without legal authority.

Mistakes made during the probate process for the previous owner that overlooked someone else’s rightful claim (undisclosed heirs) to the property of someone else’s interest in the property. Misinterpretation of wills and deeds.

Mistakes that were made in the description of the property.

Mistakes that were made where claims, tax information, or easements had not been recorded properly in the public record.

Mistakes missed of liens on the property or judgments against the previous owner.

Mistakes in unpaid taxes or mortgages and unpaid debts.

Investors need to be alert when protecting their investments. Title insurance assures the homeowner that the title to the property purchased is free of any defects and is “clear to close”. It is a guarantee that all matters of record that could harm the title of the new property have been disclosed and resolved. Title insurance protects the homeowner against any potential claims should an undisclosed event threaten the ownership of the property. Give us a call today at Title First Agency: 1-866-320-8400

Every seller wants to get the best possible price for their home but after some time on the market, you and your Realtor should have a discussion on whether it’s time to reduce the price. No one wants to lower their asking price for their home, but in some scenarios, it’s a necessary step if you want to sell your home. Some of the reasons it might make sense:

No showings. The market right now is so hot that you should be getting showings, even if your price is on the high end. If you’re getting no showings – or an abnormally low number – this tells you that you’re way off base and buyers don’t even want to waste their time seeing the property.

Lots of showings, no offers. Perhaps you have the opposite problem. You’ve had dozens of showings, but not a single offer. This tells you that your house meets the criteria of buyers, but something is off. Price could be the issue.

Shifting market. The real estate market changes on a daily basis. Depending on the sale price of other houses in the area, it’s possible that the valuation of your property has changed since you put it on the market. Maybe you need to lower the price in order to match up.

However, although the market usually plays a role, there are many reasons why houses don’t sell. So before you lower your asking price, you and your Realtor should discuss if everything is being done to sell your home. Some questions you should consider:

How has the Realtor been marketing your home? When a house sits on the market, ineffective marketing is often to blame. Does your listing include high-quality images, and does the written copy clearly highlight your home’s best features? Is it being promoted on social media? Has a direct mail campaign been launched? If buyers don’t know your home is for sale (or they haven’t seen it in the best possible light), you don’t yet know whether they’re willing to make a great offer.

Has your Realtor gotten any feedback from the buyers that have visited your home? Asking the right questions can help you figure out how to make a better impression moving forward. Ask a family member or friend to stop by and give you an honest, objective opinion of how your home looks. Sometimes, we need a fresh pair of eyes to see anything you and your agent may have missed. Find it, and fix it; it might be the sole reason your house is still on the market.

Have there been many showings? If so, your home is making a positive impression online. Buyers aren’t being turned off by the asking price, which is a good thing. But if you’ve had many showings and no offers (or no reasonable offers), then there might be something about your house that needs to change. 

The Bottom Line: Make sure you have the top agent in your area. Because of their constant engagement in local markets, Realtors are an invaluable resource for determining price, marketing your home, and managing all aspects of a sale. Before lowering your price, consider if you and your Realtor have exhausted all avenues to sell the house for what it’s worth. If your price is perfect, your home looks its best and your marketing is reaching its targeted audience, showings should increase, and, hopefully, offers will follow.

Often, when a seller has taken the time to properly prepare their home for sale, and they’ve hired the best Realtor who takes pride in presenting and marketing that home well a seller will receive offers right away. And, it’s not just a cliche, “your first offer is the best offer”, it’s more often than not, the truth.

So that first early offer? Sellers tend to reject it because they felt it happened too quickly and they want to hold out. They’re feeling adamant and confident because there is some good activity. Real Estate agents see good offers rejected early because the seller thinks they can get more.

Then, days, weeks even months later, the owners find themselves settling for less. That first offer should always be taken seriously and it’s probably the best opportunity to control the price and terms. It might not be what the seller was hoping for but, a good Realtor will walk the seller through a counteroffer, and even the ability to negotiate for other details can work for the seller.

The time a home is on the market to sell decreases its value. The longer it is listed the less interested buyers and Realtors are in the property. People will begin to wonder what is wrong with the property. Sellers are in the best position to get a good price for their home when it is new to the market. If the home does not sell buyers become suspect.

With a “for sale” sign in any yard too long, no matter the reason, it makes it more difficult to stir up interest. As the days go on, the home becomes less desirable. The market could change and take a downturn leaving the home that is priced on the comps when it was listed, now priced too high. An identical home could enter the market at a lower price. 

The Bottom Line: The first three weeks are usually the most active. If an offer is made during that time, there are three possible outcomes:

1. After some negotiation, the offer is accepted

2. After some negotiation the offer is rejected as being too low and the home continues to be marketed. Eventually, the home is sold for a better price

3. After some negotiation, the offer is rejected. Months later the Realtor is asked if the original buyer is still interested only to find out they have purchased elsewhere. The owner ends up reducing the price and sells for less than the original offer.

It’s worth working with that offer unless it’s ridiculously low.