September 12th, 2023 11:02 AM by Sam Kader MLO# 130505
There are several ways to hold title to your home:
Type of Deeds:
Statutory Warranty Deed has a warranty that is defined by the statute. That warranty is: I own the property and I’m conveying it to you, free and clear of any interest, lien, restriction, etc…that would limit your right to use the property, subject to governmental powers.
Special Warranty Deed is like a Statutory Warrant Deed except the seller typically limits the time frame of the warranty to only that time while the lender was in title to the property. Matters attaching before the current seller gained a vested interest in the property would be excluded from the warranties.
Bargain & Sale Deed contains no warranties, except the seller warrants that they own the property.
Quit Claim Deeds promise nothing. Not even that the person conveying has any interest to the property at all. For instance, I could Quit Claim Deed the Space Needle to you, but that doesn’t mean that I have any interest in the Space Needle.
It is common to order Preliminary Commitment early on during the process. The preliminary commitment is a
device that lets the soon-to-be insured know what the title company will insure
and what it will not. The title insurer performs a “title search” of public
records pertaining to the subject matter property. The preliminary commitment
lists liens, easements or other encumbrances of public record. Ensure that the number of liens and vesting match with what was told by your client. Once the new lender and loan number have been ascertained, the final Title Policy will be issued. The final Title Insurance Policy is a a contract of indemnity effective
as of the transaction closing date against these items.
Issues to look out for in a Preliminary Title Report when you are a buyer:
- Easements: Check for any shared driveways/special access and/or accessibility for specific use(s).
- CC&R’s: Review this document carefully. Depending on the neighborhood restrictions, owners may find themselves unable to fully use the property as they intend. Some examples are:
- Can it be used as farm property? Are there limits as to the type or quantity of animals allowed?
- Can RVs and/or boats be stored in view of the street?
- Are there limits on visibility for a home business ? Is the property in Open Space and will you be continuing the current use?
Issues to look out for in a Preliminary Title Report when you are a seller:
- Exhibit A - Legal Description: Check the legal description to verify it is the correct property (A best practice is to compare w/the deed and w/plat map to verify they match).
- Monetary Encumbrances: Are there Mortgages, judgments, liens, any monies owed? Or has something been paid but not showing paid?