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Home Title

September 12th, 2023 11:02 AM by Sam Kader MLO# 130505

There are several ways to hold title to your home:

  1. Sole Ownership - No other names but yours.
  2. Joint Tenancy with the right of survivorship. If one passes away, the other gets it without the property passing through probate. (The  drawback is if the surviving spouse has a lot of debt, this may not be the best way). The survivor files an affidavit saying the other titleholder is dead, attached the death certificate and gets the property.
  3. Tenancy in common. If one passes away, the property is distributed according to the deceased's will or state's law (if will is unavailable).

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:  

  1.  Your name on Title.  At the heart of every real estate venture is ownership. The first key item to check is whether your name is accurately reflected on the title commitment. This validates your rightful claim on the property and ensures that your ownership is legally recognized. 
  2.  Your Purchase or Loan Price. The financial aspect is paramount. Confirm that your purchase or loan price aligns with what you've agreed upon. This item ensures that the financial terms on your transaction are accurately recorded avoiding any surprises when it comes to settling the deal. 
  3.  Up-To-Date Title Commitment. Time can bring changes and it's essential to have the most current information. Ensure that the title commitment you're reviewing is up to date. An outdated commitment might not capture recent changes in ownership or encumbrances potentially leading to misunderstandings or complications. 
  4.  Restrictions. Properties often come with a set of limitations and conditions that affect how you can use and develop the land. These restrictions which can include zoning regulations or homeowner association rules are crucial to understandings your plans align with the property's potential.  Make sure to review this section to ensure your plans align with the property's limitations.  See below for more information.  

- 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?


Posted by Sam Kader MLO# 130505 on September 12th, 2023 11:02 AM

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