The Title Team - Services

Title Insurance:
How Title Insurance Protects Your Ownership

WHY DOES YOUR REAL ESTATE NEED TO BE INSURED BY
CHICAGO TITLE & TICOR TITLE INSURANCE?

You probably have several forms of insurance already. And you undoubtedly are familiar with insurance coverage on cars, your life and medical bills. But title insurance?

When you buy a condominium, a home, any other type of building or even vacant land, you must have a complete investigation made on every aspect of the property. Or, you may discover that the property you bought and paid for is not actually yours at all!

And even after the investigation, you will need protection in the event that some point has been missed in the public records or someone makes a claim on the title to your property. That protection is a title insurance policy from Chicago Title insurance company & Ticor title insurance company.

What does it mean to insure your title to real estate? And what are the risks that make title insurance so necessary?

WHAT ARE THE RISKS THAT CALL FOR SUCH PROTECTION?

Real estate has such great value and is so basic a form of wealth that many special laws have been enacted for its protection -- laws so strict and far reaching that real estate is more strongly safeguarded than any other form of property.

As a result, the owner of land has exceedingly strong rights…and so do the family and heirs of the owner.

But other may have "rights" in the property, as well. There are mortgages and leaseholder rights… whom the owner owes money… mining, oil or air rights… and many others. Anyone who has such a claim is, in a limited way, a part-owner. He or she cannot ordinarily be deprived of their interest except by having the claim settled or released. The property may be sold -- even without their knowledge -- but the claim is still good until satisfied. As a new owner you may know nothing about these risks, but you are still vulnerable to such claims on your property. That's why you need Title Insurance.

DOESN'T YOUR DEED TAKE CARE OF GIVING YOU CLEAR TITLE?

Not at all. A "deed" is merely an instrument whereby a seller transfers his or her right of ownership, whatever it may be, to you. It is not proof that the person described as the seller is actually the owner. It does not do away with the claims or rights others may have in the property. From the deed, you cannot determine what rights, liens or claims may be outstanding against your title. The Following questions must be answered before your title can be secured by a Title Insurance Policy.

IS THE RECORD OF OWNERSHIP OF THE LAND COMPLETE FROM THE FIRST OWNER DOWN TO DATE?

You will probably buy property that has had a number of different owners over the years. The continuous record of all those transactions is called the "chain of title", and like any other chain, it is no stronger than its weakest link. Anything wrong with the title of the previous owner may very well affect your title, too.

ARE THERE ANY LAWSUITS OR CLAIMS RECORDED AGAINST THE PROPERTY ITSELF?

If the former owner had a new sink installed and failed to pay the bill, the plumber may file a Mechanic's lien claim. This stands as a claim on the property for which you, as the new owner, may have to pay in order to clear your title. Similarly, there may be suits pending affecting the property of judgments rendered against the former owner, foreclosures or bankruptcy actions, or any number of claims or legal involvements which may definitely cloud the title until they are properly settled or removed.

ARE THERE ANY SUITS OR JUDGMENT FILED AGAINST THE OWNER OF THE PROPERTY?

If a person is sued and a judgment is rendered against that person, any real estate he or she owns may become security for the debt. This means that he or she cannot sell that real estate and deliver a clear title until the judgment is paid, released or otherwise satisfactorily disposed of. Further, other suits filed against the owner of real estate -- even though not yet decided -- may result in a cloud on the title and prevent the sale of the property.

ARE ALL TAXES AND SPECIAL ASSESSMENTS PAID?

Unpaid real estate taxes are a first lien on any real property. If there has been a tax sale or forfeiture of any other objection or protest, it means that there are complications standing in the way of a clear title.

DOES ANYONE HAVE SPECIAL RIGHTS TO THE PROPERTY THAT WOULD LIMIT OWNERSHIP?

A good many such things are possible -- the right-of-way for a road or power line, an easement for a driveway, air rights, sub-surface rights and various others -- any of which may have been sold or granted to someone else by a former owner. If so, there may be restrictions on your use of the land.

IF THE SELLER IS A CORPORATION, IS IT FULLY IN A POSITION TO SELL THE PROPERTY?

You may buy a piece of property in good faith from a corporation, only to have the validity of the sale challenged by a stockholder who claims it was not properly authorized by the Board of Directors -- or that the company was not empowered under its charter or by-laws to sell the land at all. There are further complications possible if the company is in receivership, or if the firm is being dissolved.

WHAT IS AN ABSTRACT? DOESN'T IT TELL ABOUT THE PROPERTY?

An abstract, which is used in come parts of the country, is a history of the title to property as revealed by the public records. Deeds, mortgages, other instruments and legal proceedings which have affected property through the years are all included in the abstract.

If something is revealed in the abstract which might stand in the way of a clear title, it is up to the owner and the owner's attorney to clear it away. If they cannot do this, it must be accepted as a limitation on your right of ownership. Also, it is not infrequent for matters which seriously affect the title to be omitted in an abstract, because they are not shown in the public records.

DOES AN EXAMINATION OF THE ABSTRACT REVEAL ALL DEFECTS IN THE TITLE?

It may not…simply because the public records, form which an abstract is made, may not show everything which affects the title. For example: statements in the record may be incorrect or may fail to give important facts. There may be fraudulent or improperly executed documents on the record. And, there may even be ordinary clerical mistakes which could seriously endanger the title.

In fact, a title would appear to be clear, after the examination of the abstract, only:

If the search made in preparing the abstract has been thorough;
If the facts revealed in the abstract have been correctly interpreted;
If no clerical errors have been made in public records;
If claims or rights of others have been disposed of.

Even after all these possible hazards are eliminated, there still remain some of the most serious sources of risk…hazards which by their very nature simply cannot be uncovered.

WHAT ARE SOME OF THESE HIDDEN RISKS?

Some of the most serious risks which are not revealed by the records or by an examination of the abstract but covered by a Chicago Title and Ticor Insurance Policy are:

Marital Status of Owner Incorrectly Given

Under the law, one spouse may have an interest in property owned individually by another spouse. An owner may say that he or she is single, although secretly married or perhaps divorced in another state -- resulting in a claim by a spouse or former spouse whose existence was not suspected.

Undisclosed Heirs

When an owner dies and there is no will, the courts must decide who the rightful heirs are. But even then, such a decision by the court may not be final or binding on any heir who was not notified of the proceeding. Even under a will, the court may have to settle questions of interpretations of the will. Cases of this kind include children born after the date of the will and heirs overlooked due to incorrect probate proceedings.

Mental Incompetence or Minors

A transfer of property by a minor or a person adjudged to be mentally incompetent raises special problems. To be valid and binding on a minor or incompetent, the transaction must be made by guardians or appointed by the court. If a deed or release was executed by a person who was a minor or under mental disability at the time, the transaction may be viodable or invalid.

Fraud and Forgery

The owner may have been fraudulently impersonated. Deeds, releases, or other documents may be forgeries.

Defective Deeds

A deed may have been delivered without consent of the owner or after his or her death. A document may have been executed under an expired power of attorney. The name of the grantee may have been inserted in the deed after its delivery. The officer of a corporation may not have been properly empowered to act. In any such case, the action may result in loss of title.

Confusion Due to Similar or Identical Names

Despite a careful investigation to prevent it, some confusion of identity is possible. For example, a person's title to his or her land, established thirty years ago, may be under the name Jansen and the taxes may still be paid under that name -- but the lawsuits, marriages, divorces, wills and other actions may be under a simplified family name, such as Johnson, Johnston, Jonson, or even Jansen. Or two members of the same family might have the same name, as in the case of the father and son -- and the title may be in one while the deed is executed by the other having no title.

Errors in Records or Clerical Work

A document may be missed in searching. Entries or indexing in records may be in error. Clerical mistakes are infrequent, but they do happen.

IS THERE ANY WAY TO BE PROTECTED AGAINST THESE RISKS?

Yes, with Chicago Title Insurance Or Ticor Title Insurance Policy. Under the terms of a title insurance policy, you are protected against risks and insured against loss. If your title as insured is ever attacked, The Title Insurance Company stands ready to defend it in two ways:

If it is necessary to enter a legal defense of your rights under the policy in any suit or proceeding adversely affecting the title as insurance, Chicago Title Insurance and Ticor Title Insurance employ legal counsel to take such action for you… completely at our own expense.
If a loss is sustained, you are protected up to the full amount of your policy, which usually is equal to the full purchase price you paid for the property.

MY LENDER HAS A MORTGAGE TITLE INSURANCE POLICY ON MY PROPERTY. WHY ISN'T THAT ENOUGH?

Any person or financial institution that lends money on real estate wants that investment protected. Title Insurance provides mortgage title insurance policies to assure the lender that the mortgage is a valid first lien protected against hidden as well as known defects in the title as insured. Such a policy affords the only way a lender can be certain about the title which may be acquired in the event of a foreclosure.

Unfortunately, this does not benefit the owner in the event of a claim, for a mortgage title insurance policy protects only the lender's interest in the property, not the current owner. That's why the Title Insurance Company provides owners title insurance policies to protect the owner's interest in a piece of property. Purchasing your owners title insurance policy at the same time that the lender orders the mortgage title insurance policy can result in cost savings to you.

IS TITLE INSURANCE EXPENSIVE?

The cost of title insurance on any piece of property you may decide to buy is very small when compared with the benefit and security it gives. And, unlike other forms of insurance, there are no annual payments to keep the policy in force -- you pay only one premium. The original premium is your only cost as long as you or your heirs own the property!

Please Contact Us at The Title Team if you have any questions or if we can be further assistance.

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Closing Service: A Closing is defined as the final procedure in which documents are executed and or recorded, and the sale (or loan) is completed. It can also be defined as a selling term meaning the point at which the client or customer is asked to agree to the sale or purchase and sign the contract.

At The Title Team we have provided closing services for many real estate transactions. We have closing agents that are very professional who have a great deal of experience.

If The Title Team can answer any other questions you may have please Contact Us. Or you may contact someone on our Closing Team.

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Escrow Services:

What Is an Escrow and Why Is It Needed?
An escrow is an arrangement in which a disinterested third party, called an escrow holder, holds legal documents and funds on behalf of a buyer and seller, and distributes them according to the buyer's and seller's instructions.

People buying and selling real estate often open an escrow for their protection and convenience. The buyer can instruct the escrow holder to disburse the purchase price only upon the satisfaction of certain prerequisites and conditions. The seller can instruct the escrow holder to retain possession of the deed to the buyer until the seller's requirements, including receipt of the purchase price, are met. Both rely on the escrow holder to carry out faithfully their mutually consistent instructions relating to the transaction and to advise them if any of their instructions are not mutually consistent or cannot be carried out.

An escrow is convenient for the buyer and seller because both can move forward separately but simultaneously in providing inspections, reports, loan commitments and funds, deeds, and many other items, using the escrow holder as the central depositing point. If the instructions from all parties to an escrow are clearly drafted, fully detailed and mutually consistent, the escrow holder can take many actions of their behalf without further consultation. This saves much time and facilitates the closing of the transaction.

Who May Hold Escrows?
The escrow holder may be any disinterested third party (although some states require that certain escrow holders be licensed).

There are two important reasons for selecting an established, independent escrow firm, an attorney, or an escrow officer with a bank, Savings Bank or title insurance company. One is that real estate transactions require a tremendous amount of technical experience and knowledge to handle smoothly. The other is that the escrow holder will generally be responsible for safeguarding and properly distributing the purchase price.

Escrow officers with established firms generally are experienced and trained in real estate procedures, title insurance, taxes, deeds and insurance.

Impartiality
An escrow officer must remain completely impartial throughout the entire escrow process. He or she will normally adopt a courteous but rather formal manner when dealing with parties to the escrow, keeping conversations to the matters at hand in the escrow. This formal behavior is meant for the benefit of all concerned, since the escrow officer must follow the instructions of both parties without bias.

Escrow Instructions
Escrow instructions are written documents, signed by the parties giving them, which direct the escrow officer in the specific steps to be completed so the escrow can be closed.

Typical instructions would include the following:

The method by which the escrow holder is to receive and hold the purchase price to be paid by the buyer.
The conditions under which a lapse of time or breach of purchase contract provision withal terminate the escrow without a closing.
The instruction and authorization to the escrow holder to disburse funds for recording fees, title insurance policy, real estate commissions, and any other closing costs incurred through escrow.
Instruction to the escrow holder on the payment of prior liens and charges against the property and distribution of the net sale proceeds.

Since the escrow holder can only follow the instructions as stated, and may not exceed them, it is extremely important that the instructions be stated clearly and be complete in all details.

What Each Party Does in the Escrow Process
The Seller

Deposits the executed deed to the buyer with the escrow holder.
Deposits evidence of pest inspection and any required repair work.
Deposits other required documents such as tax receipts, addresses of mortgage holders, insurance policies, equipment warranties or home warranty contracts, etc.

The Buyer

Deposits the funds required, in addition to any borrowed funds, to pay the purchase price with the escrow holder.
Deposits funds sufficient for home and title insurance.
Arranges for any borrowed funds to be delivered to the escrow holder.
Deposits any deed of trust or mortgages necessary to secure loans.
Approves any inspection reports, title insurance commitments, etc. called for by the purchase and sale agreements.
Fulfills any other conditions specified in the escrow instructions.

The Lender (If Applicable)

Deposits proceeds of the loan to the purchaser.
Directs the escrow holder on the conditions under which the loan funds may be used.

The Escrow Holder

Opens the order for the title insurance
Obtains approvals from the buyer on the title insurance report, pest and other inspections.
Receives funds from the buyer and/or any lender.
Prorates insurance, taxes, rents, etc.
Disburses funds for title insurance, recordation fees, real estate commissions, lien clearance, etc.
Prepares a final statement for each party, indicating amounts to be disbursed for services and any father amounts necessary to close escrow.
Records deed and loan documents, delivers the deed to the buyer, loan documents to the lender and funds to the seller, closing the escrow.

Closing the Escrow
Once all the terms and conditions of the instructions of both parties have been fulfilled, and all closing conditions satisfied, the escrow is closed and the safe and accurate transfer of property and money has been accomplished.

Division of Charges
The method of dividing the charges for the services performed through escrow or as a result of escrow varies from place to place. The fees and service charges to be divided might include, for example, the title insurance policy premium, escrow fee, any transfer taxes, recordation fees, and cost in connection with any loan being obtained. Unless there is some special agreement between the buyer and seller as to how these charges are to be paid, local custom will generally be followed in drafting the instructions to the escrow holder as to how they are to be divided.

In Summary
The escrow process was developed to help facilitate the sale or purchase of your home. The escrow holder accomplishes this by:

Acting as the impartial "stakeholder", or depository of documents and funds.
Processing and coordinating the flow of documents and funds.
Keeping all parties informed of progress on the escrow.
Responding to the lender's requirements.
Securing a title insurance policy.
Obtaining approvals of reports and documents from the parties as required.
Prorating and adjusting insurance, taxes, rents, etc.
Recording the deed and loan documents.
Maintaining security and accountability of monies owed and owing.

It's Not Always This Simple
The examples and explanations on this website are designed to acquaint you with the escrow process and are based on relatively simple escrows. Every escrow is unique and most are more complex than explained here. If you have questions about the escrow process, we suggest you contact an escrow officer or attorney to obtain detailed advice and further explanation.

Further Assistance:
If you have any questions or would like to find out more on how The Title Team can help you with Escrow Closing Service. Please click here to Contact Us or Contact someone on our Closing Team that can assist you further.

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1031 Tax Deferred Exchange Services:

A 1031 tax deferred property exchange is an exchange in which capital gains tax deferral is available to real estate owners who sell their investment, rental, business or vacation real estate, and reinvest the net proceeds in other real estate. Real estate held for these purposes are called like-kind/1031 properties. A section 1031 real estate exchange is simply a method by which a real property owner disposes of one property and acquires another without having to pay capital gains tax on the transaction. In addition, there is a 25% depreciation recapture. This can be significant for properties that are fully depreciated. In an ordinary sale transaction, the property owner is taxed on any gain realized by the sale of the property. In a section 1031 real estate exchange, the tax and recapture on the sale are deferred indefinitely.

Property owners may sell like-kind properties and defer taxes on the sale's profits by meeting the requirements of Internal Revenue Code (IRC) 1031 exchange. The purpose of the 1031 Exchange is to allow sellers of like-kind property to buy replacement property of like-kind within a specific time period and defer taxes.

Steps for 1031 Tax Deferred Exchange

Before closing on the relinquished property (property to be sold):
1. Get exchange documents from The Title Team.
2. If earnest money is to be deposited with The Title Team, please state in the exchange agreement and deliver the earnest money check, signed exchange agreement and direction to invest funds to The Title Team.

At Closing on Relinquished Property:
1. Exchanger and purchaser to sign exchange agreement.
2. Have seller on HUD show as "The Title Team as Escrow Intermediary for…".
3. Have net proceeds check made payable to The Title Team.

Immediately after closing:
1. Deliver check and direction to invest form to The Title Team.
2. Bring signed original exchange agreement to The Title Team. A representative will sign and provide a copy for you.
3. The Title Team will invest the funds in a money market account of your choice.

Within 45 Days of The Closing Date on The Relinquished Property:
1. Mail, deliver or fax a replacement property identification notice to The Title Team. This notice must be received by The Title Team within 45 days of closing and must be property specific.

When Purchasing the Replacement Property:
1. Amend the Offer to Purchase to substitute The Title Team, as intermediary, as the purchaser. You may use the form of amendment provided by the company.
2. Within 3 working days before the closing, contact The Title Team regarding the closing date on the replacement property. Advise how you wish to have funds disbursed (check or wire) and to whom the check or wire needs to be payable. A HUD statement must be provided prior to closing for our signature and to verify the amount of funds being used for the purchase.

For Further Information
Please contact The Title Team if you need further information or you may Contact Kim Eglar of Our Closing Team.

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