Unit 9 (Title and Closing Cost)

• Title is

• ownership of parcel of property

• Title search is

• the search of records (in chain of title) of a property to determine the effect of record on the title

• Chain of title will show

• all previous owners of the property on record

• Title Closing happens on

• closing date, transferring ownership from seller to buyer

• Constructive notice

• holds buyer or lenders responsible for inspecting public records or not (info is available, up to you to check it) (what person can find out)

• Actual notice

• what the person actually knows, person who has searched the public records and inspected the property

• Abstract of title will show

• all instruments affecting a property

• Break in the chain is when

• theres missing information between original owner to present day owner

• Suit to quiet title

• establishes ownership by court

• Evidence of title may be revealed in 4 forms

Abstract of title and lawyers opinion, title insurance policy, Torrens certificate, certificate of title

• Abstract of Title ( Lawyers Opinion is)

• history of instruments (deed, liens, easements) that affect title recorded in the county record

• Abstractor

• lists each instrument in order with information about taxes, judgements, and special assessments

• Attorneys opinion of title is

• a written report by an attorney for the purchaser

• Title Insurance Policy

• protects lender and buyer against loss if owners title is challenged by anyone at anytime (paid for once, last for whole period of ownership)

• Owner title insurance policy

• protects owners and their heirs or devisees by uncovering undisclosed liens and fraud

• Lenders title insurance policy

• protects the lenders against financial loss if someone challenges title

• Torrens system is

Registration in Torrens system provides evidence of title without the need to search public records (NOT USED IN NEW YORK)

• Certificate of title (not title insurance policy, does not carry full protection)

• attorney examines public records and issues a certificate of title that states the attorneys opinion of the title status

• Marketable title is

• a title that doesn't include defects other than ones stated in sales contract, free from lawsuit

• Proper evidence of title is

• proof that title is marketable

• Coinsurance clause is

• a policy most homeowners hold that requires policy holder to maintain fire insurance coverage equal to at least 80% of property actual replacement cost

• Property owners in certain areas must seek

• flood damage insurance before they can obtain federal mortgage

• Real Estate Settlement Procedures Act (RESPA) makes sure that

• the buyer in a residential real estate transaction has knowledge of all settlement costs

• Affidavit of title is

• a sworn statement by a seller that states to the title company that since the date of the title examination there have been no judgements, bankruptcies, or divorces involving the sellers/ also no repairs or improvements that have not been paid for/ and that they posses the property

• Survey allows for

• knowledge of location, size, and legal description of property

• Survey will uncover

• encumbrances

• Satisfaction of mortgage is

• when mortgage is paid in full

• Debit is

• a charge

• Credit is

• an amount that party already paid

• Prorations are

• expenses and responsibilities divided by the seller and buyer to be paid

• Accrued items are

• owed by the seller but will eventually be paid by the buyer (property taxes, mortgage payments)

• Items accounted for fall into two categories inclosing statement

Items credited to buyer - buyers earnest money, unpaid principal balance of outstanding mortgage being assumed by buyer, etc

Items credited to seller - sales price, refund to seller of prepaid water charge, etc