»  GENERAL FAQ’S

»  TIPS FOR SELLERS

»  TIPS FOR BUYERS

»  THE CLOSING PROCESS

If you have a specific question, please email us in the "Contact Us" section and we will respond within one business day.

For an in-depth explanation of the history of title insurance and what it covers go to our "Title Knowledge Page"

 

General F.A.Q.'s

Why do I need Title Insurance?
A forgery 50 years ago; a deed executed under duress; bigamy that went unknown; an error by a clerk in the county recorder's office; a misapplied tax payment; these are but a few of the hidden "title defects" that could cause you to lose your property. And, even if you don't lose your property altogether, title problems could make it impossible for you to sell or even give it away.

1.  You don't want a problem that occurred long before you bought your property to deprive you of ownership or your right to use or dispose of it.   

2.   You don't want to pay the potentially ruinous cost of defending your property rights in court.

A title insurance policy from OIG is your best protection against potential defects (See below) which could remain hidden despite the most thorough search of public records.

Title Insurance exists to reimburse you for loss suffered due to defects that existed prior to the issue date of your policy, up to the amount of the policy. Unless specifically excluded, your title insurance policy also provides for legal defense costs.

 

Potential Defects

A title insurance policy from OIG Title policy protects you against such potential defects as:

1. Forged deeds, mortgages, satisfactions or releases.
2. Deed by person who is insane or mentally incompetent.
3. Deed by minor (may be disavowed).
4. Deed from corporation, unauthorized under corporate bylaws or given under falsified corporate resolution.
5. Deed from partnership, unauthorized under partnership agreement.
6. Deed from purported trustee, unauthorized under trust agreement.
7. Deed to or from a "corporation" before incorporation, or after loss of corporate charter.
8. Deed from a legal nonentity (styled, for example, as a church, charity or club).
9. Deed by person in a foreign country, vulnerable to challenge as incompetent, unauthorized or defective under foreign laws.
10. Claims resulting from use of "alias" or fictitious name style by a predecessor in title.
11. Deed challenged as being given under fraud, undue influence or duress.
12. Deed following non-judicial foreclosure, where required procedure was not followed.
13. Deed affecting land in judicial proceedings (bankruptcy, receivership, probate, conservatorship, dissolution of marriage), unauthorized by court.
14. Deed following judicial proceedings, subject to appeal or further court order.
15. Deed following judicial proceedings, where all necessary parties were not joined.
16. Lack of jurisdiction over persons or property in judicial proceedings.
17. Deed signed by mistake (grantor did not know what was signed).
18. Deed executed under falsified power of attorney.
19. Deed executed under expired power of attorney (death, disability or insanity of principal).
20. Deed apparently valid, but actually delivered after death of grantor or grantee, or without consent of grantor.
21. Deed affecting property purported to be separate property of grantor, which is in fact community or jointly owned property.
22. Undisclosed divorce of one who conveys as sole heir of a deceased former spouse.
23. Deed affecting property of deceased person, not joining all heirs.
24. Deed following administration of estate of missing person, who later reappears.
25. Conveyance by heir or survivor of a joint estate, who murdered the decedent.
26. Conveyances and proceedings affecting rights of service member protected by the Soldiers and sailors Civil Relief Act.
27. Conveyance void as in violation of public policy (payment of gambling debt, payment for contract to commit murder, or conveyance made in restraint of trade).
28. Deed to land including "wetlands" subject to public trust (vesting title in government to protect public interest in navigation, commerce, fishing and recreation).
29. Deed from government entity, vulnerable to challenge as unauthorized or unlawful.
30. Ineffective release of prior satisfied mortgage due to acquisition of note by bona fide purchaser (without notice of satisfaction).
31. Ineffective release of prior satisfied mortgage due to bankruptcy of creditor prior to recording of release (avoiding powers of bankruptcy).
32. Ineffective release of prior mortgage or lien, as fraudulently obtained by predecessor in title.
33. Disputed release of prior mortgage or lien, as given under mistake or misunderstanding.
34. Ineffective subordination agreement, causing junior interest to be reinstated to priority.
35. Deed recorded, but not properly indexed so as to be locatable in the land records.
36. Undisclosed but recorded federal or state tax lien.
37. Undisclosed but recorded judgment or spousal/child support lien.
38. Undisclosed but recorded prior mortgage.
39. Undisclosed but recorded notice of pending lawsuit affecting land.
40. Undisclosed but recorded environmental lien.
41. Undisclosed but recorded option, or right of first refusal, to purchase property.
42. Undisclosed but recorded covenants or restrictions, with (or without) rights of reverter.

 

How long before we can close on our home purchase?

The time it takes to get to a closing of a real estate transaction is largely determined by the contract between the parties and the time needed to get lender approval if a mortgage is involved. In a typical residential transaction, most contingencies (other than financing and sale of the Purchaser's residence) can be removed within two weeks. Financing should be resolved within 30-45 days.

How long will my closing last?

Closing a transaction should not be an ordeal. We typically budget one hour for a residential resale and 30-45 minutes for a refinance.

Do I need an attorney?
Probably. Buying/Selling a home is a major event with significant financial and tax considerations. A good Real Estate Attorney will be able to give you critical advice about appropriate contingency clauses, title restrictions and tax consequences of your transaction. (We've highlighted Real Estate because you want an attorney who is experienced and current in this area.) Our on staff attorney and owner Charles W. Cadrecha will be happy to answer any questions and assist in your closing process.

What is escrow?
Escrow is one of those phrases the professionals use to mystify consumers. It is a fluid term with several meanings. The most common are:

• A generic term for the entire closing process
• An agreement to hold funds/documents until certain events have occurred.
• An agreement to hold funds for a specific use (e.g. we will "escrow" $150/month for payment of future taxes.)

Don't let your eyes glaze over when people start throwing around the word "escrow" -  look them straight in the eye and ask precisely what type of escrow they are referring to.

Why do I record my deed?
Deeds are recorded to provide notice to the world that you own your property. Recording a deed at the Clerk of Court imparts "constructive notice" to the world that you own your property-everyone in the world is deemed by law to know of your interest. If you fail to record your Deed, only these people who have actual notice of your interest are aware of your interest.

 

Tips for Sellers

1. Bring Picture Identification

Everyone who signs documents (buyers, sellers or people acting on their behalf) must have identification. A drivers license or a passport are the most acceptable. Believe it or not, "impersonation" claims cost our industry more than $1,000,000 per year. You really do need I.D.!

2. Verify the time and location of the closing

If you are closing at Liberty Title Agency, we will provide you with the time and our office location. However, some closings occur at the Buyer's lender, a real estate sales office, or an attorney's office. Take a few minutes to check.

3. Consult your attorney

If you have been working with an attorney, please let us know. You and your attorney will need time to review documents and closing figures, especially if your attorney does not intend to come to the closing. Do not assume we know an attorney is involved. We will only contact an attorney and provide him/her with documents after we have received your instructions. We respect your privacy.

4. Bring your spouse

If you are selling property and are married, your spouse may have certain rights and may need to sign certain documents. If your spouse is not planning on attending the closing, please let us know.

5. Consult your Realtor regarding outstanding contingencies and final walk-through

Closings have been delayed or cancelled by failure to remove contingencies, or by failure to clear items that were outstanding from the contractor's inspection or final walk-through. The sellers should plan to vacate the home the day before the closing. This will allow time to prepare the home for the "walk-through" that occurs prior to closing.

6. Hire a babysitter

A sale/purchase closing generally takes an hour. Liberty Title Agency tries to accommodate children at the closing with toys on hand; however, the closing of your home is an important transaction. Having watched many tired and distracted parents trying to understand and sign important legal documents, we recommend using a babysitter. If you do not yet have a home at which to leave your children and their babysitter, feel free to contact our closing staff.

7. "Good Funds"

Unless prior arrangements are made, the Seller will receive a title company check drawn on our escrow account. These checks are honored by other title companies and lenders if you are immediately departing for a closing on your new home. If you require a certified check or "wired" funds at closing, please notify us at least 48 hours prior to closing. There will be an additional fee for cashier checks or wiring of proceeds, as we are charged by our bank for these services.

8. Mortgage Payments

You should discuss the advisability of making your final mortgage payment with your lender, real estate agent and the title company as your closing approaches. If you make a payment immediately before the closing, we will probably not receive a payoff letter from your lender that reflects the payment. We must collect the amount specified in your payoff letter, (ordering a new payoff letter will often result in a $15-$50 charge from your lender). Please note, if you don't make your payment and the closing is on the 12th-15th day of the month, you may be charged a "late fee" by your lender.

9. Mortgage Payoffs

We will use an overnight delivery service or local carrier to make your mortgage payoff, which will usually occur on the business day after closing.

NOTE: If you have a VA\FHA mortgage, check with your lender before scheduling a closing. These loans accrue interest monthly, so if a payoff is not made on the first of the month you will owe interest for the whole month!

10. Taxes

If your property taxes (November 30) are due at or near the time of closing, you will need to bring the tax bill or paid receipt to closing. The tax collector may not be able to promptly post payments, so it is often impossible to verify the status of property taxes near their due dates. If we can not confirm your payment of taxes, we will have to withhold the amount of the taxes from your proceeds until we can verify payment.

 

Tips for Buyers

1. Bring Picture Identification
Everyone who signs documents (buyers, sellers or people acting on their behalf) must have identification. A drivers license or a passport are the most acceptable. Believe it or not, "impersonation" claims cost our industry more than $1,000,000 per year. You really do need I.D.!

2. Bring a certified check or cashiers check
No personal or money market funds. As a buyer you will probably need to bring funds to the closing. Have the check made out to Liberty Title Agency. This will help protect you in case it is lost or stolen. If your closing figures are not finalized and you have to go to your bank, you can estimate the amount you will need. Our staff will be happy to assist you with an estimate. Any difference will be returned at the closing.

NOTE: Checks from a stockbroker or fund manager are not acceptable at closings. If you are using such funds, deposit them into a bank account a week before your closing so you can obtain the proper funds in time.

3. Bring a copy of your homeowners insurance and a one year paid receipt
Almost every buyer needs to furnish proof of insurance and a paid receipt at the closing. Check with your lender and insurance agent regarding the specifics of the policy. In most cases, the policy must cover the amount of the mortgage and also contain a mortgagee's loss payable clause. If you are purchasing a condominium, verify that the homeowner's association has arranged to provide proof of insurance (this is also a good time to check on any homeowner association fees that you will need to pay at the closing).

 

4. Verify the time and location of the closing
If you are closing at Liberty Title Agency, we will provide you with the time and our office location. However, some closings occur at the Buyer's lender, a real estate sales office, or an attorney's office. Take a few minutes to check.

5. Consult your attorney
If you have been working with an attorney, please let us know. You and your attorney will need time to review documents and closing figures, especially if your attorney does not intend to come to the closing. Do not assume we know an attorney is involved. We will only contact an attorney and provide him/her with documents after we have received your instructions. We respect your privacy.

6. Review Lender Requirements
Lender requirements are usually well detailed on your "Mortgage Acceptance/Confirmation" letter. If you see a requirement that you have not discussed with your loan officer, DO NOT assume that it is no longer required. Your lender will typically require that you bring pay stubs, verification of funds, documents from the sale of your previous home, gift letters, and additional tax forms. The closing is not the time to negotiate with your lender on these items.

7. Bring your spouse
If you are selling property and are married, your spouse may have certain rights and may need to sign certain documents. If your spouse is not planning on attending the closing, please let us know.

8. Consult your Realtor regarding outstanding contingencies and final walk-through
Closings have been delayed or cancelled by failure to remove contingencies, or by failure to clear items that were outstanding from the contractor's inspection or final walk-through. The sellers should plan to vacate the home the day before the closing. This will allow time to prepare the home for the "walk-through" that occurs prior to closing.

9. Schedule moving services properly
Buyers should not expect to meet their moving van until 12-24 hours after the closing. In almost all sales agreements, possession remains with the seller until after the closing is over. A night spent in a motel or in sleeping bags may be well worth the anxiety of timing the arrival or departure of the moving van with the closing. You may want to use the time to line shelves, touch-up paint or celebrate!

 10. Hire a babysitter
A sale/purchase closing generally takes an hour. Liberty Title Agency tries to accommodate children at the closing with toys on hand; however, the closing of your home is an important transaction. Having watched many tired and distracted parents trying to understand and sign important legal documents, we recommend using a babysitter. If you do not yet have a home at which to leave your children and their babysitter, feel free to contact our closing staff

 

The Closing Process

Real estate closings should be a stress-free experience for all involved. The Seller is receiving money, the Purchaser is acquiring a new home and the professionals handling the sale are getting paid. Our years of combined experience at OIG Title can help make sure your closing is a smooth one.

The keys to a smooth closing are good communication and preparation. Your title company plays a key role in both areas, by acting as a clearinghouse for information and as an independent third party to handle the funds, prepare many documents and manage the closing process.

The following sections offer a brief idea of the closing process, explain closing costs, and offer some tips for a smooth closing.

The Closing Process

This begins with the signing of the Purchase Agreement. This document states what the Seller and Buyer have agreed to and sets out a timeline for the closing process. This agreement will identify the property address, purchase price, and determine closing costs.

At the same time they sign the Purchase Agreement, the Purchasers will usually give an earnest money deposit to either the real estate broker or title company to secure their performance under the Purchase Agreement. Both Purchaser and Seller then proceed to remove contingencies and prepare for the closing. On the Purchaser's side this usually means finding financing and hiring inspectors. On the Seller's side, this means hiring a title company, obtaining payoff information on the existing mortgage and making any repairs required by the Purchase Agreement. As a "one stop shop" Liberty Title Agency will handle all termite inspections, surveys, and obtain payoff information.

When all the requirements are removed, the Seller and Purchaser work together with the title company and Purchaser's lender to establish a time and place for a closing that meets the parameters established by the Purchase Agreement. Liberty Title Agency has 5 offices and is growing, and we gladly host closings at any of our locations. We also know in today's busy times that getting places can be difficult, so we also provide mobile closings and will be glad to come to you!

Once a closing date and time have been established, the title company will coordinate the activities of the Seller, Purchaser, Purchaser's lender and other parties involved in the closing. 

Closing documents are distributed by the title company to the parties, their counsel and/or the real estate agents for review. This often happens very shortly before the closing, so do not be surprised if you receive your final closing figures the day before   documents are signed and funds are exchanged.

Closing Costs

Closing Costs is a term that refers to the costs and expenses involved in closing a real estate transaction. These costs are determined by the contracts between the parties, applicable laws and local customs.

The following explanation of costs is based upon a "typical" transaction and assumes typical mortgage closing expenses:

Seller Closing Costs.

1. Doc Stamps on the Deed which are paid to the Clerk of Court for the transfer of the real estate.

2. Owner's Policy (Title Insurance) - A Seller normally purchases a title insurance policy for the benefit of the Purchaser. The amount is based on the purchase price, so please contact our office for a specific quote. A re-issue credit can also be issued if you are able to produce the current owner's policy for the property.

3. Closing Fee - This is a general transaction management fee. It includes handling all aspects of the closing documents, acting as the escrow agent, and preparing the documents. This fee is on average $150.00.

4. Title Search and Examination - This cost is usually paid by the Seller because they must show marketable title to the Purchaser. The search fee varies by county but will be between $65.00 - $250.00. The title examination fee for simple title examination can be $100.00. For complicated transactions and commercial transactions this figure will be higher.

5. Real Estate Commission - If a real estate broker or agent is involved in the transaction, the Seller will normally pay a commission of approximately 6% of the sale price. This cost will be determined in the Purchase Agreement.

6. Mortgage Payoffs - Payoff statements will be obtained by our title company, the payoffs will be collected on the Settlement Statement at closing, and over-nighted to that specific lender. The Seller should be careful to not use their home equity credit line prior to closing and will need to bring in all unused home equity checks and debit cards to closing.

7. Payment of delinquent taxes - All delinquent taxes will need to be paid to allow recording of the Deed.

8. Miscellaneous - Any attorney's fees if the Seller obtained an attorney and courier fees to Airborne Express will be paid by the Seller for loan payoffs.

Seller Credits

Sellers can also expect to receive credits that will supplement the Purchase Price. The largest credit is the "tax pro-ration" which is a reimbursement to the Seller by the Purchaser for a portion of the property taxes paid by the Seller in the year preceding the closing. Credits may also be given for homeowners association fees.

Purchaser Closing Costs.

Sale Costs
1. Tax Pro-rations - The tax pro-ration is a reimbursement to either the Seller/Buyer for a portion of the prior year's real estate taxes. 

2. Closing Fees - This is a general transaction management fee. It includes handling all aspects of the closing documents, acting as the escrow agent, and preparing the documents. This fee is normally $150.00.

3. Inspection Costs - This includes the termite inspection and survey of the property. This will vary depending on the companies used and the size of land for the survey.

4. Recording Fees - Recording fees for doc stamps and intangible taxes on the mortgage as well as the recording of the mortgage itself, is the responsibility of the Purchaser.

Loan Closing Costs
Loan costs will vary based upon the type of loan and whether or not a Purchaser is paying "points" to "buy down" the interest rate of the loan. Typical loan related fees include an appraisal ($250-$300); credit report ($15-$50); document preparation ($100-$150); underwriting ($100-$400) loan closing fees ($300-$400) and courier fees ($50-$100).

In addition to these loan closing costs, the Purchaser will also need to pay the prepaid interest and escrow deposits. The prepaid interest is a charge by the lender to cover the interest accruing on the loan for the remainder of the month during which the closing takes place. Escrow deposits are the funds given to the lender so that they can pay for the property taxes, homeowner's insurance, and if applicable, private mortgage insurance (PMI).