2. Ch.3D;Legal Issues:Title Closing & Costs

Title

Legal term for a bundle of rights in a piece of property in which a party may own either a legal interest or equitable interest.

Marketable Title

A title that a court of equity considers to be so free from defect that it will legally force its acceptance by a buyer. The title of a property has to be 'clean' and 'marketable'.

Title Search

An examination of the public records to determine the ownership and incumbrances affecting real property.

One can order a Title Report through a Title Insurance Company to ensure that the title on a property is clear and marketable.

Chain of Title

The sequence of historical transfers of title to a property. It runs from the present owner back to the original owner of the property.

Abstract of Title

A summary of all of the recorded instruments and proceedings which the title to property, arranged in the order in which they were recorded

Title Insurance

A policy of insurance which indemnifies the holder for any loss sustained by reason defects in the title.

When buying a Co-op,

…the buyer is purchasing a share in the corporation that owns the building.

A 'proprietary lease' NOT a 'deed' is…

…the document used to prove the owner's right to occupy a specific unit in a Cooperative building.

CATTL

Checks

ACRIS

Title

Transfer

Loan

The management company plays an important role when buying into a…

…Cooperative building. Typically the closing will take place in their office.

Closing Statement

A document commonly used in real estate transactions, detailing the fees, commissions, insurance, etc. that must be transacted for a successful transfer of ownership to take place.

It is recommended that the…

…agent conduct a walkthrough of the property with the client prior to the closing.

The walk-through…

…allows the client to observe any changes in the condition of the property, that may be the owner's responsibility to fix.

As an agent,

1…it is recommended that you inform your client's attorney what the commission may be in the transaction.

And 2…it is recommended that you share your knowledge of the closing costs with the attorneys in the transaction.

Each party…

…will have their own closing statement pertaining to their own issues.

HUD-1 Statement

A document that provides an itemized listing of the funds that are payable at closing.

RESPA

Real Estate Settlement Practices Act

Constructive Notice

Information or knowledge of a fact imputed by law to a person because the person could have discovered the fact by proper diligence and inquiry.

Actual Notice

Notice delivered in such a way as to give legally sufficient assurance that actual knowledge of the matter has been conveyed to the recipient.

Purchaser's Closing Costs:

• Immediate upkeep cost

• Mortgage principal

• Mortgage interest

• Common charges

• Maintenance charges

• HOA dues

• Appraisal fee

• Inspection fee

• Title insurance

• Mortgage recording tax

• Move-in deposits

• Escrow deposits

A Recording Tax is…

…paid on a condominium or house but NOT a Co-op.

As an agent, you should keep track of…

…all the items that must be paid by the buyer to the seller (or vice versa) and any items that need to be refunded.

RESPA

Real Estate Settlement Procedures/Practice Act