What do I need to bring
to settlement?
First
and foremost you need to bring a smile. Our goal at Diamond Title
Corp is to ensure that you leave with a smile too. You will also
need to bring a valid government issued picture ID such as a
Driver's License, Passport, or Military ID. Additionally, if you are
bringing money to the settlement these funds will need to be
"certified funds." Certified funds can come in the form of a
cashier's check, teller's check, money order, or certified personal
check. Cash is only acceptable in small amounts. Please call our
office in advance if you intend to bring cash to settlement. You may
also be required to bring additional documents which our office will
inform you of in advance.
How long will the
settlement take?
While
the time of a settlement can vary greatly, typically a refinance
will take between 30 and 50 minutes and a purchase will take 45
minutes to 1 1/4 hours.
How far in advance should I contact
Diamond Title Corporation to handle my
settlement?
If
purchasing, you should contact Diamond Title Corp as soon as you
have a signed contract. By contacting us as early as possible, you
allow us adequate time to obtain a title abstract on the property
being purchased and clear any outstanding "clouds" on title prior to
your contracted settlement date. Additionally, we can better
coordinate the settlement with all parties involved including the
sellers, purchasers, real estate professionals, and lenders.
If re-financing, you should contact us after you submit your
loan application. Do not wait for final loan approval, as the time
between your loan approval and settlement is often only a few days.
By scheduling with us early, you allow us time to obtain the title
abstract and clear any issues with your title, obtain payoffs from
your current lender, and coordinate closing with your new lender.
What if I can not
attend settlement?
In
certain circumstances, a "power-of-attorney" can be prepared for
you. A "power-of-attorney" is a legal instrument which allows
another to sign legal documents on your behalf. Please give one of
our attorneys or settlement officers a call to see if this is an
option that would work for you.
Who attends
settlement?
At a
"purchase settlement", typically the sellers, purchasers, and their
real estate professionals will attend the settlement which will be
conducted by one of our competent and experienced attorneys or
settlement officers. At a refinance settlement usually only the
borrowers and our attorney or settlement officer are present.
Who does Diamond Title
Corporation represent at settlement?
In a
purchase transaction, the title company "represents" the contract.
The title company does not negotiate the terms of the transaction;
rather we facilitate the execution of the terms of the transaction.
We do not act for, advice, or "represent" any one party. In a
refinance closing, we are there to follow your lender's instructions
and to explain the documents to you and verify that they are
properly executed.
When can I find out how
much money I need to bring to settlement?
Because
we rely on third parties such as lenders to provide us with
instructions, information, and figures for your settlement, we often
can not furnish to you the exact amount you need to bring to closing
until the day before, or, sometimes, even the day of settlement.
However, you should be able to rely on your lender's or your
realtor's good faith estimate for the approximate amount of money
you need to bring with you. If you happen to bring too much money to
settlement, we refund back to you any excess amount upon completion
of the closing.
How should I hold
title to my new property?
There
are several ways that property can be owned:
·
Sole owner
This is
obvious; you own the property in your own name.
·
Tenants in
common
Two or
more people own property together. Under a tenant in common
arrangement, each owner has a divisible interest in the property.
Although most tenant in common ownerships are split equally (i.e.,
50-50 ownership), there is no legal requirement that it has to be
this way. Often, there are financial or other considerations that
dictate a different ownership split -- for example, 90-10 or 75-25.
In a
tenant in common ownership, on the death of one owner, the deceased
person's percentage ownership is part of his or her estate. The
property interest does not transfer to the surviving owner. If there
is a will, that portion of the property is distributed in accordance
with the instructions in the will. If the person dies without a
will, called intestacy, the laws of the jurisdiction where the
person lived controls the distribution.
·
Joint
tenants
The
parties jointly own the property. Although some states require
language to the effect that the property is held as joint tenants
with right of survivorship, the majority of the states consider the
property as being jointly held even if this magic language is not
included in the deed.
Under a
joint tenancy arrangement, on the death of one owner, the property
automatically transfers to the surviving joint tenant. This is
called a transfer by operation of law.
Let's look
at this example: A and B own property as joint tenants with right of
survivorship. A dies with a will that specifically gives A's share
of the property to C, his child. However, since the property is
jointly held, B will end up with full ownership. C has no claim to
the property.
Joint
tenancy ownership can be unilaterally changed by one of the joint
tenants. Let's go back to our example. While A is alive, he decides
to give his share of the property to C. He prepares a will to this
effect. But he also asks his attorney to prepare a deed, changing
title to reflect that A and B hold title as tenants in common.
Although B should be informed of this transaction as a matter of
courtesy, B has no control over what A does with his share of the
property. Now, when A dies, his interest will be distributed to his
child C, in accordance with the terms of the will.
·
Tenants by
the entireties
This is
title reserved for husbands and wives. Although some married couples
will hold title as joint tenants with right of survivorship, the
more common arrangement is to take title as tenants by the
entireties. This means that on the death of one spouse, the
surviving spouse automatically (by operation of law) becomes the
owner of the entire property.
Title
ownership is important in life as well as in death. If, for example,
there is a creditor who holds a judgment against one of the joint
tenant owners, that creditor can force the sale of the property in
order to satisfy the judgment.
Let us
assume that the judgment creditor is owed $50,000 by one of the
joint tenants, and the jointly held house is worth $300,000, with a
$200,000 mortgage. The judgment creditor can get a court order
requiring that the house be sold. The first mortgage lender will get
its $200,000. The remaining $100,000 will be divided so that the
judgment creditor will get his $50,000 and the joint tenant who did
not owe any money will get the difference.
When the
husband and wife hold title as tenants by the entireties, however, a
judgment creditor of only one of the parties cannot force a sale to
satisfy the debt. This can be done only if both husband and wife owe
the money.
Thus, the
way title is owned can be important, whether you are alive or dead.
Your
mother now owns the property, since it was held as tenants by the
entireties. The land records, however, still show ownership in both
names. While it is not critical to have the title placed solely in
the name of your mother, it is not expensive to update the records,
and it may solve problems that could arise later.
Your
mother will need a certified copy of your father's death
certificate. This means that the certificate will have an imprinted
seal from the government office that issues such certificates. She
will then have to record a document, called a confirmatory deed, in
the office of the Recorder of Deeds in the jurisdiction where the
property is located. There should be no recordation or transfer tax,
and the filing fee should be nominal, perhaps $20 or $30. Some local
jurisdictions may require some additional documentation, such as an
affidavit of exemption from tax.
Why should
your mother make sure that title is in her name? Peace of mind is
perhaps the most important factor. Additionally, many years later,
you may not have your father's death certificate and there may be
delays in attempting to locate one quickly, should the need arise to
sell or refinance the property.
I sold my primary residence
this year. What form do I need to file?
NOTE:
Persons are advised to check with an accountant or tax attorney to
verify eligibility and details regarding any tax information on this
web site.
If you meet the ownership and use tests, you will generally
only need to report the sale of your home if your gain is more than
$250,000 ($500,000 if married filing a joint return). This means
that during the 5-year period ending on the date of the sale, you
must have:
- Owned the home for at
least 2 years (the ownership test), and
- Lived in the home as
your main home for at least 2 years (the use test).
If you
owned and lived in the property as your main home for less than 2
years, you may still be able to claim exclusion in some cases. The
maximum amount you can exclude will be reduced. If you are required
to report a gain, it is reported on Form 1040, SCHEDULE D, Capital
Gains and Losses.
What is title
insurance?
Before
answering "what is title insurance", it might be best to first
answer "What is title?" "Title" is the ownership in real property.
Among other things, it means that you have the legal right to
possess, occupy, peacefully enjoy and sell your property without
interference from others, subject only to restrictions imposed by
governmental authorities or previous owners. In most cases, title is
transferred by deed which is recorded in the land records of the
county in which the property is located. Generally, when property is
sold, an attorney for the Buyer or a title examiner goes to the
record room and searches the land records for any title defects. A
title defect is anything in the entire history of ownership of a
piece of real estate which may encumber the owner's rights under the
title. A title defect may cause the owner of real property to lose
all or part of his land to a superior ownership interest or claim of
another. This is the type of loss which title insurance protects
against. In short, if you own a title insurance policy, the title
insurance company will defend you, without cost, against an attack
or claim upon your ownership interest in your property as insured
and you will be protected against financial loss caused by a title
defect.
If my title has been
examined for defects, why do I need
Insurance?
There
are many defects which even the most meticulous search of the land
records will not uncover: For instance, it is impossible for an
examiner to know whether the marital rights of all previous owners
have been relinquished; whether all deeds, mortgages and judgments
affecting the property have been properly indexed in the land
records; whether all signatures are valid; or whether an unknown
heir of a previous owner had a valid claim against the property.
Without owner's title insurance you may have no avenue of recovery
for these types of problems.
If I am required to
purchase lender's insurance, why do I need owner's coverage as
well?
In
almost every instance, a lender will require you to purchase
lender's title insurance protecting it up to the value of its loan
on the property. This coverage only protects the lender, not you,
and the coverage diminishes as the loan is paid off. As you build
more equity in the property, you expose yourself to a higher risk of
loss occasioned by a title defect. In this situation the protected
lender will suffer no loss while you as the owner of record bear the
substantial risk of the damage. Owner’s title insurance will protect
you against any covered loss from failure of title up to the full
amount of the policy.
What are some reasons or
examples of why I should have Owner's Title
Insurance?
Owner's
Title Insurance will protect you against those hidden risks which
would not be disclosed by even the most meticulous search of the
public records. Some examples of those hidden risks
are:
- Forgery
- Fraud in connection
with execution of documents
- Undue influence on a
grantor or executor
- False impersonation by
those purporting to be owners of property
- Incorrect
representation of the marital status of
grantor
- Undisclosed or missing
heirs
- Wills not properly
probated
- Mistaken
interpretation of wills and trusts
- Mental incompetence of
grantor
- Conveyance by a
minor
- Birth of heirs
subsequent to date of will
- Inadequate
surveys
- Incorrect legal
descriptions
- Non-delivery of
deeds
- Unsatisfied claims not
shown on record
- Deeds executed under
expired or false powers of attorney
- Confusion due to
similar or identical names
- Dower or curtsey
rights of ex-spouses of former owners
- Incorrect
indexing
- Clerical errors in
recording legal documents
- Delivery of deeds
after death of grantor
Are there different
types of title insurance?
Yes. There
are three different types of Title Insurance. A Lender's
Policy, Standard Owner's Policy and the Owner's
Enhanced Policy. Lender's Coverage is required by all
corporate lenders as a condition of the purchaser's loan. This
covers only the lender for the amount of the loan they are making to
a borrower. The Lender's Policy that the lender is provided
with is the standard ALTA 1992 Loan Policy. It provides coverage to
the Lender against such title encumbrances as fraud in
connection with the execution of document, incorrect representation
of the marital status of grantor, wills not properly probated, and
many other circumstances that might jeopardize the Lender's security
in the property.
The
Standard ALTA 1992 Owner’s Policy protects you as the
owner of real property against fraudulently executed documents,
incorrect representations and improperly probated wills as well as
any unsatisfied claims that may not appear in the County land
records.
The
Owner’s Enhanced Policy covers you, the owner against
all that is included in a standard ALTA 1992 policy but with
additional and enhanced coverage. For an estimate of costs for title
insurance please see our
cost
calculator. Subject
to limitations, some of the benefits of an Enhanced Policy
include:
- Mechanic’s lien
coverage is provided for work done prior to the date of your
policy.
- Zoning coverage is now
provided, insuring that your land is properly zoned for a
single-family residence.
- Subdivision coverage
is now provided in the event your land is a portion of an
improperly created subdivision.
- Coverage is provided
if you as the owner are forced to remove an existing structure,
other than a boundary wall or fence, due to a previous owner’s
failure to obtain the necessary building
permit.
- Coverage is provided
if an adjacent builder builds onto the homeowner’s property
without permission.
- Coverage is provided
for forgeries affecting your ownership after the date that
your title insurance policy is
issued.
