What happens in the closing process?
The closing process is where all funds are collected and then disbursed, closing paperwork is prepared, title deeds are prepared and notarized. The closing is usually handled by a title company or an attorney. Among their many responsibilities are:
Cashing the buyer's deposit check and holding the money in the escrow trust account.
Coordinating paperwork between the parties: buyers, sellers, agents, lender, title underwriter.
Preparing and notarizing deeds and documents.
Coordinating the funding of the loan.
Paying off the seller's loan.
Preparing the HUD-1 closing cost settlement statement for all the parties.
Disbursing the sellers’ check and the agent's commissions.
Prorating the annual property taxes and any other obligations
Clearing any title exceptions so that the buyer has good title
This is just a brief overview of the many responsibilities that the closing agent performs.
What are Closing Costs?
Closing costs are incurred by the buyer and the seller. Closing costs vary from state to state. Typical closing fees you might find in a real estate purchase or sale include: recording fees, notary fees, commissions for listing and selling agents, mortgage payoff balance, bank processing fee, origination fee, appraisal fee, tax servicing fee, flood certification fee and title insurance.
What should I bring to a closing?
Photo ID (Ex: Driver's Licence, Passport, Military ID).
Funds - a cashier’s or certified check made out to Southland Title & Escrow (This is if a wire transfer has not been made).
Any other documents that your lender, Realtor or your processor has requested.
What is a Title?
A title is the evidence or right that 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 a Title Search?
The process of investigating official county records to determine whether an owner's rights in real property are good. A title search is conducted to find if there are any defects in the ownership of a particular tract of land.
What is Title Insurance?
Title insurance is a contract to protect an owner against losses arising through 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 terms 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 of that information and much more. For while he or she may own the property, others may also have rights in that same real estate. When a house is built, there are many workers and providers of construction materials involved in the construction. All of those people have “lien” rights against the property if they have not been paid.
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 in the same city. Then, add to this the possibility of human error at a multiplicity of points. Yet what is not in the public records often causes title problems. For all these reasons and many more, a property owner needs the protection afforded by title insurance.
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 of the hidden 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 the grantor's consent; invalid, suppressed, erroneous wills, missing heirs, unsettled estates.
Liens and other rights - Lien workers and/or materials furnished, 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 does Title Insurance cover?
There are two types of Title Insurance: Basic Coverage and Enhanced Coverage.
Basic Coverage includes protection against:
Another party owning an interest in your title
Another party claiming to have rights affecting your title arising out of forgery or impersonation
Another party having an easement on your land
Another party having the right to limit your land usage
Enhanced Coverage includes all of the basic protection plus:
Subdivision Law Violation Coverage
Coverage where subdivision laws have been violated prior to the purchase and as a result, the homeowner is unable to obtain a building permit.
Building Permit Violation Coverage
Coverage in the event the insured is forced to remove or remedy existing structures because any portion was built without a building permit.
Coverage in the event that the insured is forced to remove or remedy existing structures because they violate an existing zoning law.
C C & R Coverage
Insures against the loss of title to the land due to a violation of a CCR prior to the acquisition of title.
Coverage in the event that the insured is forced to remove existing structures because they encroach on a neighbor’s land.
Enhanced Access Coverage
Coverage if access to and from the land is not available for both pedestrians and vehicles.
Water & Mineral Rights Coverage
Coverage for damage to existing improvements because of the future exercise of a right to use the surface of the land for the extraction or development of minerals, water or other substances.
Supplemental Assessments Coverage
Coverage with respect to supplemental real estate taxes not previously assessed against the land for any period
Map & Address Coverage
Coverage is provided to the insured when the map, if attached, does not show the correct location of the land, according to public record, and that a residence with the address shown in Schedule A is located on the land.
Continuous Coverage & Additional Insureds
Coverage remains in force forever and covers the insured as well as his or her heirs, the trustee of a trust created by the insured.
The amount of insurance automatically increases at the rate of 10% per year for five years following the policy date with a maximum of 150% of the original amount without payment of an additional premium.