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Is it better to
ask for a CERTIFIED check or a BANK check at your closings? |
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Immediate access
to money is key for all clients, especially if they're relocating outside the
area.
A BANK check clears quickly.
So does a CERTIFIED check --
unless it gets lost, misplaced, destroyed or stolen.
Therein lies the
potential problem.
You see, banks are extremely reluctant to re-issue a
CERTIFIED check and will do so only if your Title Company signs an affidavit
and agrees to take responsibility in case the 'lost' check is ever presented
for payment. Most title companies, including Signature Title, will not do so --
because of the inherent risk.
In our experience, BANK CHECKS are the way
to go.
Please contact us in advance and we can help you advise your
clients which type of check would be the best choice, whatever their individual
circumstances. |
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When is the very
WORST time of the month to schedule your closings? |
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Timing, they
say, is everything. So is our experience at literally thousands of
closings.
To save you and your clients time, money, hassle and delays,
we strongly recommend scheduling your closings EARLY IN THE MONTH, if at all
possible.
You see, the entire closing process, which involves many
separate parties, simply tends to bog down at the end of the month. Town
offices can take longer to verify information. Homeowners insurance agents can
take longer to put documents together. Moving companies and van/trailer rentals
are in shorter supply. Appointments for utilities and cable service may also be
delayed.
Even a Title Company as well-regarded as Signature Title may
not be always be able to accomodate specific closing times/locations at the end
of the month -- simply because of the increased demand and the co-ordination
time necessary to get every participant in the closing fully-ready on a
quick-time basis. It's always a good idea to make 'The earlier, the faster, the
better, the rule to remember for everyone -- at every one of your
closings. |
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When the tax
bill arrives, who owes what -- and when?
And how is the bill pro-rated
between the Buyer and the Seller? |
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This can be
tricky...
If a tax bill is due at the time of the closing or within 60 days
following the closing, the amount of the bill (or estimated bill) is usually
charged in full to the Seller.
That tax bill amount is then pro-rated
between the Buyer and the Seller. This means the Buyer is charged an amount on
the Settlement Statement -- and the Seller is credited with that same amount.
The amount charged to the Buyer and credited to the Seller represents the
Buyer's share of this bill. The actual amount of the pro-ration depends on the
tax period covered by the bill. The Buyer will owe the Seller from the day of
closing through the end of the current tax period.
NO CURRENT TAX
BILL DUE?
When no current tax bill is due at closing or within 60
days of closing, the reverse is true.
At closing, the Seller can be
charged for his or her portion of an ANTICIPATED future tax bill. At closing,
the Buyer receives a credit for the same amount. Then, when the tax bill DOES
arrive, the Buyer is reponsible for paying the bill in full -- because the
Seller will have already paid the Buyer for his or her share of the
bill.
A WORD OF CAUTION
Cities and towns can take several
months to update ownership records.
Therefore, it's very likely that the
first tax bill issued after the closing will be issued in the Seller's name.
The Seller should immediately forward any tax bill received to the Buyer for
proper payment. If the Buyer knows that a tax bill should be coming due -- and
he or she has not yet received it -- contact the appropriate city or town
office for a duplicate copy (just in case the original bill was mailed to the
Seller in error or not forwarded on to the Buyer).
Need more info? Give
us a call. |
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What must
Sellers of condos and properties with home owner associations disclose (and
Buyers know) before -- rather than after -- the closing? |
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Sellers of
condos and properties like homes in subdivisions that require membership in a
homeowners' association should provide Buyers with a copy of the association's
formal legal documents, usually filed with the State. These include: the
DECLARATION, BY-LAWS, and RULES & REGULATIONS of the association. The
Seller should also provide the Buyer with a copy of the most recent ANNUAL
BUDGET. Buyers must know of any monthly or annual dues, assessments, scheduled
expenses or contingency funds for unexpected expenses, like snow removal costs
above and beyond budgeted amounts. All of this information can also be obtained
through the Realtor for the Seller.
Need more info? Give us a call. |
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The Right of
Recission for Refinancing.
How does it affect your closing schedule? |
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The Right of
Recission is a non-waivable federal regulation that allows a borrower (and a
borrower's spouse, even if the spouse is not a borrower on the note) to cancel
a refinance decision anytime within 3 business days of the closing, excluding
Saturdays and Sundays.
The right of recission applies to every
refinancing transaction involving the borrower's PRINCIPAL residence. It does
NOT apply to any other lending transaction, such as the purchase or refinance
of an investment property or second home.
WHEN IS THE MONEY
AVAILABLE?
What this means to a borrower who is refinancing a home
for any reason is that the money from their refinancing note is NOT available
until 4th day after the closing. For closings on Thursdays, funds would not,
for example, be available until the following Tuesday.
This also means
that the payoff for the mortgage that is being replaced by the refinance will
also NOT be sent until the 4th business day after the closing.
Bottom
line? The earlier in the week you schedule your closing, the faster, the better
your closing will be.
Need more info? Give us a call. |
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Where should
your clients keep their copy of the signed HUD Settlement Statement.
And how
long should it be kept? |
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A signed copy of
the HUD Settlement Statement should be kept in a safe place -- preferably, the
same place the client keeps all other important paperwork. The Seller should
retain the HUD statement copy for AT LEAST 7 years for IRS/tax purposes. The
Buyer, however, should hold on to the HUD statement copy for as long as he or
she owns the property. There are many occasions when trying to resolve title
matters/discharge problems, when a subsequent Title Company will want to know
information about the purchase. Was a mortgage paid off? Who was the Title
Company that handled the closing? Was Owner's Title Insurance purchased?
Because of the time-sensitive nature of real estate closings, the faster the
old HUD statement is produced, the faster the Title Company can begin to work
on addressing problems. |
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Prepaid
interest? Transfer taxes? Tax stamps? Points? What closing costs can a Buyer
tax-deduct? |
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As a general
rule, when you purchase a primary residence, the only costs you can deduct are
prepaid interest, points, and certain real estate taxes. These items can be
deducted for the tax year in which you buy the house IF you itemize your
deductions. For more specific tax advice, we recommend checking with your tax
advisor. |
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If a Power of
Attorney is appointed to attend a closing and sign the closing documents, can
this create problems that might jeopardize the closing? |
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Yes, it can!
Especially if the Title Company is not informed ahead of time. Some Lenders may
not allow the Buyer to appoint a Power of Attorney under any circumstances.
Most Title Companies will not allow a Seller to appoint a Power of Attorney to
sign the deed.
There have been many occasions where a Power of Attorney
is rejected because the Buyer/Seller tries to appoint a Power of Attorney using
a standard form found on the Internet, generated from a computer program, or
purchased from an office supply/stationery store. Such forms may not contain
the requisite state law/statutory language, or may not be specific enough to
the particular transaction to satisfy Lender requirements (if a Lender is
involved). As a result, a Power of Attorney form that may be acceptable for
other purposes (Estate Planning, for example) may not be accepted for a real
estate closing.
If the Title Company has ample warning that a Power of
Attorney may be used, and can review the signed Power of Attorney prior to the
closing, the Title Company can usually identify and resolve most problems. In
other words, the more notice we are given, the more likely that your closing
will proceed smoothly. |
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Why is NOT
having Owner's Title Insurance so risky? If the Buyer already has paid for
Lender's Title Insurance as part of the deal, isn't more insurance simply
redundant? |
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Sometimes, what
seems logical can wind up leading you and your clients into "The Danger Zone".
Here's why:
1) Lender's Title Insurance protects the Lender
not the Buyer -- as the insured policy holder. Without OWNER'S Title Insurance,
Buyers are at risk, since they have no rights to make claims under the Lender's
Insurance Policy.
2) The Lender's policy insures the balance the
Buyer owes on the mortgage. Without an OWNER'S Title Insurance policy, the
Buyer's equity in the property is completely unprotected.
3) The
Lender's right to make a claim against the policy begins when the Lender
suffers a loss -- which normally would not occur until after the mortgage has
been foreclosed on.
4) Most importantly, in any situation where
severe title issues occur, the Lender's Title Insurance Company could decide to
payoff the Lender and buy the mortgage -- leaving the Buyer out in the cold,
having lost the property while still being responsible for making payments on
the borrowed money.
Owner's Title Insurance is the sole safeguard
that protects the property interests of Buyers. Lenders, Realtors and closing
agents should recommend it as a matter of course. In fact, Lenders, Realtors
and closing agents who make any statements to the effect that Owner's Title
Insurance is unnecessary open themselves up to the risk of being sued by a
Buyer who elects not to buy the coverage -- but winds up needing it. |
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Can a Buyer
"negotiate" the cost of an Owner's Title Insurance policy? |
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Sorry, no
negotiation. In NH, the insurer has no authority to negotiate rates. Rate
tables & schedules, which are filed with NH State insurance department
offices, are public information, and are adhered to by all title insurance
companies.
In Maine, for properties valued at $1 million or more,
there may indeed be "negotiation room" on rates, as some title insurance
companies have negotiated rates on file with the State for million-dollar-plus
transactions. If this describes your client and property, be sure to ask. |
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Why on earth
does anyone need Owner's Title Insurance if a Title Search has already been
done? |
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Owner's Title
Insurance and a Title Search are like apples and oranges -- they're two
entirely different things. And both are necessities.
A Title Search
is only as good as the records kept in any County Registry of Deeds and Probate
Court. If a problem does not appear in the records, or appears before the
established cut-off date for the search, you, not the Title Company, are at
risk and liable to resolve any problem(s).
In stark comparison,
Owner's Title Insurance protects you against the unforeseen -- the many HIDDEN
RISKS which can affect a property title, EVEN IF a professional, meticulous and
accurate Title Search is performed.
For example: looking at records
in a Title Search will rarely uncover forged documents, documents signed by a
minor or someone under duress. Just as important, there can be mortgages,
liens, easements and restrictions on a property -- NOT found due to data entry
or indexing errors in the County records.
Any one of these problems could
prove financially costly -- unless you're protected by Owner's Title Insurance,
which safeguards your vital interests (and your peace-of-mind). |
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Which title
works best for your clients: Tenants-in-Common or Tenants with Rights of
Survivorship? |
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When two (or
more) people take title to a property, what happens when one of them dies?
If your clients take title to a property as JOINT TENANTS or JOINT
TENTANTS WITH RIGHTS OF SURVIVORSHIP, the surviving owner(s) inherit -- without
the need for probate.
If your clients take title to a property as
TENANTS-IN-COMMON -- or if the deed does not state any 'condition of tenancy',
the surviving owner(s) must go through the probate process. This may take
considerable time, since either a Will (or if no Will exists, state law)
determines who gets the deceased person's share of the property.
Avoiding probate can save time and money.
But there may indeed be
situations where Tenants-In-Common is the best way to file.
When in
doubt, call us -- we'll help you determine which title is best in any given
situation. |
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WHEN YOU HAVE ANY QUESTION AT ANY TIME,
CALL US AT 1-800-655-0013
FOR
FAST HELP |
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