FAQ
What steps are involved in buying a home?
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After you make the decision to buy a home, you’ll want to plan a budget and contact a real estate professional to guide you through the entire process. You’ll also need to research and compare available lenders to finance your home beyond your down payment. Your real estate professional will likely be able to suggest prospective lenders if you need assistance in choosing one. A lender will pre-qualify you for a loan in the amount it determines you to be able to afford, so that sellers will consider you a serious and capable buyer. Once you’re pre-qualified, your real estate professional will begin showing you possible homes. When you decide on a particular home, your real estate professional will make an offer on your behalf to the home’s seller–usually for a price slightly less than the asking price. This may lead to a counter offer, meaning that the seller tries to negotiate your purchase price closer to his or her original asking price. Once both parties agree on an amount, your real estate professional will work with a title insurance agent and/or escrow officer to draft all necessary paperwork. He or she will then schedule a date for you and the seller to meet for the closing, where the transaction is completed and ownership is officially transferred from seller to buyer.
What steps are involved in selling a home?
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The steps involved in the home-selling process are very similar to those involved in the home-buying process. Once you have made the decision to sell your home, you will need to establish an asking price for it. While some sellers successfully sell their homes on their own, a for-sale-by-owner arrangement can be complicated and will require a great deal more of your personal time throughout the process. For this reason, most people consider the commission paid to a real estate professional well worth the investment, for the convenience, time savings and overall guidance provided. Real estate professionals will also be able to tell you if your asking price is appropriate for your property or home. In addition, they will manage the marketing of your home–from front-yard sign to MLS listing–while guiding you in preparing the home to be shown to potential buyers. Once a prospect makes you an offer, you can either accept the proposed purchase price or make a counter offer. When both parties agree on a price, your real estate professional will work with a title insurance agent and/or escrow officer to draft all necessary paperwork. He or she will then schedule a date for you and the buyer to meet for the closing, where the transaction is completed and ownership is officially transferred from seller to buyer.
What is title insurance, and why do I need it?
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Title insurance is an insurance policy that protects you against loss that could result from defects in the title of the property you are buying. The premium is paid only once and is good until the property’s ownership changes. Unlike most types of insurance which protect policyholders from future events, title insurance protects you against defects that could already exist.
What does your premium really pay for?
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An important part of title insurance is its emphasis on risk elimination before insuring. This gives you, as the policyholder, the best possible chance for avoiding title claim and loss.
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Title insuring begins with a search of public land records affecting the real estate concerned. An examination is conducted by the title agent or attorney on behalf of its underwriter to determine whether the property is insurable. The examination of evidence from a search is intended to fully report all "material objections" to the title. Frequently, documents that don't clearly transfer title are found in the "chain," or history that is assembled from the records in a search. Here are some examples of documents that can present concerns:
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Deeds, wills and trusts that contain improper wording or incorrect names;
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Outstanding mortgages and judgments, or a lien against the property because the seller has not paid his taxes;
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Easements that allow construction of a road or utility line;
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Pending legal action against the property that could affect a purchaser; or
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Incorrect notary acknowledgements.
Through the search and the examination, title problems are disclosed so they can be corrected whenever possible. However, even the most careful preventative work cannot locate all hidden title hazards.
Hidden title hazards - your last defense
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In spite of all the expertise and dedication that go into a title search and examination, hidden hazards can emerge after closing, resulting in unpleasant and costly surprises. Some examples of hazards include:
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A forged signature on the deed, which would mean no transfer of ownership to you;
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An unknown heir of a previous owner who is claiming ownership of the property;
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Instruments executed under an expired or a fabricated power of attorney; or
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Mistakes in the public records.
Title insurance offers financial protection against these and other covered title hazards. The title insurer will pay for defending against an attack on title as insured, and will either perfect the title or pay valid claims. All for a one-time charge at closing.
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Your home is your most important investment. Before you go to closing, ask about your title insurance protection, and be sure to protect your home with an owner's title insurance policy.
How much does title insurance cost?
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Title insurance charges vary in difference sections of the country. However, you pay for an owner’s policy of title insurance only once; there are no monthly premiums.
How long does title insurance coverage last?
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The lender’s policy of title insurance lasts until the mortgage is paid in full. An owner’s policy of title insurance lasts for as long as you or your heirs retain an interest in the property.
What is an abstract?
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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.
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Why is transferring the title to real estate different from transferring the title to other items, such as a car?
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Transferring a real estate title can be complicated, because land is permanent and the usage of land and the rights to use it can change over the years.
What is a title search?
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A title search is a detailed examination for the historical, public records concerning a property. These records include deeds, court records, property and name indexes, and many other public documents.