Frequently Asked Questions
Real Estate Transactions can be confusing. We don’t expect any customer to know it all. We are here to answer all your questions and guide you through the entire closing process.
What is a Title Search?
Land is the basis of all wealth, and because real estate is the only asset that cannot be moved or hidden, every possible party seeks it out for lien rights; the right to put something against the title for security purposes. To build homes, factories, schools and offices, people must first acquire land. Because ownership of real estate is so basic to our entire society, special laws have evolved which deal with land. For this reason, a title search is important in the purchase of any property.
A mortgage or trust deed is a lien on real estate. If a seller of real estate has a mortgage on his property and fails to make payments as required by his mortgage and promissory note, the lender can foreclose and sell the property. A title search will disclose whether there are any unreleased mortgages or trust deeds so that a prospective buyer can make arrangements to have them paid.
Real Estate Taxes
If real estate taxes are not paid, the owner of the property can lose ownership. There are many instances where people have lost their homes because there were just a few dollars in delinquent taxes. A title search will disclose if the real estate taxes are paid and current.
When a city or parish installs streets, curbs, sidewalks, sewers, streetlights or other improvements, they have the right to levy a special assessment tax payable over a number of years. Just as with real estate taxes, non-payment of a special assessment can result in the loss of ownership of a home. A title search will disclose if there are any assessments and whether they are paid up to date.
If a person fails to pay a debt, he or she may be sued and a judgment entered against them. This judgment can become a lien on all real estate owned or acquired by the judgment debtor. An execution sale can be held and the real estate sold to satisfy the judgment. A title search will disclose if there are any judgments and whether they are satisfied.
Federal Tax Liens
The federal government has the right under the law to levy against and sell, without court proceedings, a home or property of anyone whose federal taxes are unpaid. A title search will disclose if any federal tax liens exist against the real estate.
Other Government Liens
The federal, state, parish, township, and city governments also have the right to lien and sell real estate to pay for various taxes and services. These liens include among other things, liens for inheritance tax, estate tax, income tax, sales tax, unemployment compensation contributions, old age assistance, demolition costs, cutting of weeds and removal of debris, retailer’s occupation taxes, water and sewer taxes, and others. A title search will disclose if any of these liens are present.
Mechanics Lien Claims
Any contractor who provides labor or material to a building and who is unpaid can, for a period of up to 120 days from the date of completion, file a mechanics lien as against a buyer of that property. That contractor can then foreclose and sell the house if he is not paid. The 120 day period makes this a "secret lien." A title search will disclose if any mechanics liens have been filed. A title insurance policy normally protects the buyer against the "secret lien" of mechanics’ lien claims provided Accent Title, LLC requirements have been met.
When an owner of property dies, Accent Title, LLC determines who the heirs are, whether there was a will, whether estate and inheritance taxes are paid, whether creditors claims against the estate are paid, and considers probate proceedings, if any.
There are also a multitude of court proceedings which can have an effect on title to real estate. For example: Mortgage foreclosures; decedents’, minors’ and incompetents’ estates; Partition proceedings, Condemnations and others. When encountering lawsuits, the title search will disclose the effect of the proceedings on title.
Covenants, Conditions and Restrictions
The use of land is frequently limited by deed restrictions. For example, many deed restrictions prohibit the construction of anything other than single family homes or require certain set back lines or that homes cost a certain amount. Some restrictions provide that if the restriction is violated that title revert back to the original owner. The title search discloses if there are any restrictive covenants.
A title search also discloses whether easements are present. An easement is the right to pass on another person’s land. Typical easements would include easements for utility lines, water well, joint driveways, etc.
If certain requirements are met, Accent Title, LLC will insure that no encroachments and problems of survey exist.
The Closing Process
Whether you’re purchasing your first home or your fifth, the day of closing should be a time of celebration. While you’re busy packing, ordering phone service and scheduling movers, it’s comforting to know that skilled professionals at Accent Title, LLC are busy working behind the scenes to make sure your closing runs smoothly. Your first look at the settlement process may be on the day of closing, but the process itself begins much earlier.
Once an order is received, the countdown to closing begins. Timing is essential, to make sure all the ingredients for a successful closing are in place for your arrival. When the contract or escrow agreement is received, the settlement agent will review it for completeness and accuracy. If an earnest money or deposit check is received, the settlement agent will see that it is promptly deposited into an escrow account, where the funds will remain until the time of closing.
One of the first things the settlement agent does, upon receipt of an order is to request preliminary title work. Accent Title, LLC searches and examines the title and prepares a title commitment or other form of title evidence. This is then forwarded to the settlement agent.
Upon receipt of the title commitment, the settlement agent checks the information for completeness and accuracy and makes note of any requirements which must be satisfied. The agent compares the commitment to other documents, such as the contract and loan closing instructions, making sure all information is consistent.
While the title evidence is being prepared, the settlement agent is busy coordinating other matters. If the contract calls for a prior mortgage to be paid off, the agent will order payoff figures from the existing lender. If the buyer is assuming the loan, an assumption package will be ordered showing the current status of the loan.
While each closing is as unique as the people attending it, much of the behind-the-scenes work leading up to the closing is fairly commonplace for the skilled professionals at Accent title, LLC performing it. Ordering property inspections, surveys and termite reports are typical of what’s happening behind the scenes at this point in the settlement process.
The settlement agent brings any problems or discrepancies which may be discovered to the attention of the appropriate parties so that they can be corrected. It is his or her job to facilitate cooperation, coordination and compliance between all settlement service professionals involved with the transaction. Everyone working together helps make the closing a cause for celebration!
Once the preliminary work is complete and all information on the contract, loan closing documents and title commitment has been compared and complied with, the settlement agent is ready to prepare the HUD-1 Settlement Statement. All costs must be shown on the HUD-1. This includes costs paid at closing as well as pre-paid costs, such as earnest money deposit or loan application fee. If you are a buyer and are obtaining a loan to purchase residential property, your lender has three days from the time of the loan application to provide you with a Good Faith Estimate of your loan costs. Within those three days you should also receive a copy of the HUD-1 Booklet, "Buying Your Home," which outlines the settlement process.
As closing day approaches, the settlement agent orders any updated information which might be required. Once the settlement agent is satisfied that the paperwork is in order, he or she confirms the date, time and location of the closing with all the parties involved.
The closing is where it all happens. Everything done behind-the-scenes leads up to this day. It’s time to close the transaction and transfer ownership of the property from the seller to the buyer.
What is Title Insurance?
Title insurance guarantees that no errors have been made in the title search and that there are no errors in the public records. Title insurance also protects against undisclosed title defects, which, no matter how thorough a search is made, cannot be discovered from the public records.
• Forged signatures.
• False impersonation.
• Instruments executed under expired or revoked powers of attorney.
• Delivery of a conveyance after the death of the grantor.
• Homestead rights of a spouse.
• Undisclosed heirs.
• Deeds by minors or persons of unsound mind.
• Deeds by a corporation without proper legal authority.
• Misrepresentation of marital status.
• Errors of recording officials.
• Fraud or duress in obtaining signatures.
Title insurance allows national lenders to make mortgages. An out of town lender may not be familiar with local title practices and title insurance gives the lender the security it requires.
For the seller title insurance assures quick and easy closings. He must prove to any buyer that he has a good title to his house with no liens. By furnishing a title search and insurance to the buyers in the amount of the sales price, he proves this title and our company guarantees it. Our work allows many prospective parties to buy his home with confidence. When you have an insured title you eliminate delays and technicalities when passing your title on to someone else. In the event of an attack on the title the rights of the insured are protected even if it means going to court; and if the claim is established, the LOSS IS PAID up to the limits defined in the policy.