Buyers

What is Escrow?

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Buying a home is an exciting event, but the process of completing that purchase can be complex. When you make an offer on a property and sign a sales agreement with the seller, the next step is to open an escrow account. This account keeps funds and paperwork in the care of a neutral third party – like an escrow or title company – until all the requirements of the sale have been met.

To complete the purchase of your home, you’ll have a major role to play throughout the escrow process. Your escrow officer will be required to follow the closing instructions and meet the requirements outlined in the sales contract you and the seller previously signed. It’s important to direct any questions regarding the escrow process to your escrow officer, and any questions about your loan directly to your lender. Watch this video to learn more about closing your transaction. And congratulations on your new home!

What is Escrow Infographic

The Loan Estimate: What Is It?

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The Consumer Financial Protection Bureau, or CFPB, requires your lender to issue a Loan Estimate within three business days of receiving your mortgage application. The Loan Estimate details the terms of your loans along with estimated closing costs

Common ways to take title to California residential property

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The completion and accuracy of this form is very important. This will indicate to the Escrow Officer or Title Officer how title will be held to the property. ‘How you hold title to your property can have serious tax consequences. It is strongly recommended that you seek tax and / or legal counsel when completing this form’. The Escrow Officer or Title Officer will not be able to advise you on the completion of this document.

vesting-ways-to-take-title

How to Read a Preliminary Title Report

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Understanding Preliminary Reports

After months of searching, you’ve finally found it, your perfect dream home. But is it perfect? Will you be purchasing more than just a beautiful home? Will you also be acquiring liens placed on the property by prior owners? Have documents been recorded that will restrict your use of the property?

The preliminary report will provide you with the opportunity, prior to purchase, to review matters affecting your property which will be excluded from coverage under your title insurance policy unless removed or eliminated before your purchase.

To help you better understand this often bewildering subject, the California Land Title Association has answered some of the questions most commonly asked about preliminary reports.

What is a Preliminary Report?

A preliminary report is a report prepared prior to issuing a policy of title insurance that shows the ownership of a specific parcel of land, together with the liens and encumbrances thereon which will not be covered under a subsequent title insurance policy.

What role does a Preliminary Report play in the real estate process?

A preliminary report contains the conditions under which the title company will issue a particular type of title insurance policy.

The preliminary report lists, in advance of purchase, title defects, liens and encumbrances which would be excluded from coverage if the requested title insurance policy were to be issued as of the date of the preliminary report. The report may then be reviewed and discussed by the parties to a real estate transaction and their agents.

Thus, a preliminary report provides the opportunity to seek the removal of items referenced in the report which are objectionable to the buyer prior to purchase.
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Title Insurance: 2 Types

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Your closing costs might include two types of title insurance policies, but do you know how these policies differ?

Loan Policy

Your lender requires title insurance when you secure a mortgage. A loan or lender’s policy protects the bank or lending institution for as long as they maintain an interest in your property—typically until your mortgage is paid off. If you refinance your loan, you’ll need to purchase a new policy to cover the new loan.

Owner’s Policy

An owner’s policy of title insurance helps protect your rights as the homeowner for as long as you or your heirs own the property. In some areas, it’s standard for the seller to purchase the owner’s policy for the buyer, whereas in other areas the owner’s policy is a recommended buyer purchase.

Why you need Title Insurance

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Why you need title insurance. Title problems can surface after you close on your home and affect your homeownership rights. Some of the more common title problems include:

  1. Errors in public records, like a filing mistake or inaccuracy on a former deed
  2. Unknown liens resulting from unpaid debts of former owners
  3. Missing heirs who come forward years after the owner passes away and you’ve purchased the home
  4. Forgeries, like forged or falsified documents
  5. Survey or boundary issues that may affect your ownership and cause disputes

Title professionals are skilled at identifying—and curing, if possible—these types of problems and countless others before you take ownership. Your title policy then serves to help protect you from those issues that may still remain undiscovered.

Other potential Title problems:  70+ Ways to Lose Your Property

So what exactly is “Title Insurance?”

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So what exactly is “title insurance?” Well, when a property is financed, bought or sold, a record of that transaction is generally filed in public archives. Likewise, records of other events that may affect the ownership of a property, like liens or levies, are also archived.

When you buy title insurance for your property, a title company searches these records to find – and remedy, if possible – several types of ownership issues. First, the title company searches public records to determine the property’s ownership status. After this search, the underwriter will determine the insurability of the title.

Even the most skilled title professionals may not find all problems associated with a property, though. Some risks, such as title issues due to filing errors, forgeries, or undisclosed heirs, are difficult to identify. So after the title company finishes its searching, it also provides a title insurance policy that will help protect you from a variety of issues that might be uncovered later.

Real Estate Agents and Agency: What Does It Mean For You?

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There are agents, and then there are agents. Yes, it sounds confusing. That’s because the term “agent” is often used in a casual manner, referring to any real estate practitioner. But, agent also refers to someone with whom you’ve established a formal agency relationship—someone who represents your best interests in a real estate transaction and owes you fiduciary responsibilities. Agency relationships are usually established in writing with buyer agency agreements, and require:

  • Loyalty
  • Obedience
  • Disclosure
  • Confidentiality
  • Reasonable care and diligence
  • Accounting
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Buyer Beware: Credit Repair Ripoff

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. . . a California credit repair company, was already on the radar of the Consumer Financial Protection Bureau, as several of its associated companies were fined earlier this year by the bureau for misleading consumers and charging illegal fees for credit repair services.

Be careful out there.  Read the rest HERE

Key players involved in the real estate transaction

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The buying and selling of a home is an event that requires the services of a number of professionals. Here are the key players involved in the process: 

Listing Agent/Realtor – This person, hired by the seller to market and guide the sale of their property, helps the seller to get the highest possible price and best terms in the sale of their existing property. The seller pays the listing agent who splits that fee with the agent representing the buyer.

Buyer’s Agent/ Realtor – The buyer’s agent helps someone looking to purchase a new property to find potential homes, engage the listing agent for showings, and obtain the best possible price and terms for the new property.

 Lender – The lender can be a bank or mortgage company that loans the money to the buyer so that they can purchase the property. 

Loan Officer/ Mortgage Broker – Representing the lender, the loan officer works directly with the buyer/borrower to prequalify them, complete the loan application, and put together the documents required for loan approval. 

Loan Underwriter – The underwriter, who works for the lender, assesses the borrower’s ability to repay the loan by reviewing all assets and past credit history, as well as the property details, appraisal, and title search reports. Then, they will generate detailed reports of their findings before making final loan approval. 

Title Company/Title Insurance – When you buy title insurance for your property, a title company searches public records and archives to find any title ownership irregularities – and remedy, if possible – several types of ownership issues. After this search, the underwriter will determine the insurability of the title. 

Escrow/Closing Officer – An escrow or closing officer, usually employed by your real estate agent or title company, works with all participants to facilitate a successful closing of a real estate transaction. At closing, they will collect the purchase money funds from the buyer and lender as well as the settlement costs from each party, then disburse the funds in accordance with the HUD-1 settlement statement and record the necessary documents to transfer ownership of the property. 

Appraiser – An appraiser works on behalf of a lender and provides a market analysis and valuation of the subject property. An appraiser’s finding is subjective and combined with market findings of sold properties within the surrounding neighborhood. 

Termite Inspector – This visual inspection is conducted by a state-licensed professional hired to look for signs of infestation or damage to a structure by wood-destroying pests, standing water, earth-to-wood contact and plumbing leaks. 

Home Inspector – A home inspector objectively and independently provides a comprehensive analysis of a home’s major systems and components and is normally hired by the buyer. 

Insurance Agent – An insurance agent helps a home buyer determine the homeowner’s protection coverage needed and assists in locating the right insurance policy to fit those needs.