Answers to Frequently Asked Settlement Questions
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 and many lenders are asking for a second ID such as a debit card, credit card, social security card or work ID. Additionally, if you are bringing money to the settlement, these funds will need to be wired from your bank to our bank. Please only get the wire instructions directly from our office.
Cashiers checks are only acceptable in small amounts. Please call our office in advance to see if a cashiers check would be acceptable in your case.
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.
If purchasing, you should contact Diamond Title Corp as soon as you have a executed/signed contract. By contacting us as early as possible, you allow us adequate time to obtain a title search abstract on the property being purchased and time to clear any outstanding "clouds" on title prior to your settlement date. Additionally, we can better coordinate your settlement with all parties involved including the sellers, purchasers, real estate professionals, brokers, consultants and your lender.
If taking out a new loan, 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 search abstract and clear any issues with your title, obtain payoffs from your current lender, and coordinate closing with your new lender.
In certain circumstances, a "power-of-attorney" can be prepared for you. A "power-of-attorney" is a legal instrument that allows another person you choose to sign legal documents on your behalf. Please give our office a call to see if this is an option that could work for you.
Prior to Covid, 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. Today we coordinate Purchasers and Sellers to be the most convenient time and location for all parties.
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, advise, or "represent" any one party. In a refinance closing, we are there to follow your lender's instructions, to explain the documents to you, and verify that they are properly executed.
Because we rely on third parties such as lenders to provide us with instructions, information, and figures for your settlement, we often cannot furnish to you the exact amount you need to bring to closing until a couple of days before your closing, or, sometimes, even the day of settlement.
However, your lender or our office can give you a good faith estimate for the approximate amount of money you need to send to closing. If you happen to send too much money to settlement, we refund any overage after your closing.
There are several ways that property can be owned:
- Sole owner
This is where you own the property in your own name.
- Tenants in common
Two or more people own property together. Under a tenant in a common arrangement, each owner has a divisible interest in the property. Although most tenants 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, 60-40 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 control the distribution.
- Joint tenants
The parties jointly own the entire property. Although some states require language to the effect that the property is held as joint tenants with the commonlaw rights of survivorship, the majority of the states consider the property as being jointly held even if the additional language is not included in the deed as long as it states that the property is being held as joint tenants.
Under a joint tenancy arrangement, on the death of one owner, the property 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 the 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. If one party deeds to another party or takes a loan in only his/her name and pledges their property interest, then the property will change to tenants in common.
- Tenants by the entireties
This is the title reserved for husbands and wives. This means that on the death of one spouse, the surviving spouse 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 sue to 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 the 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 the title is owned can be very important. Be sure to call Diamond Title if you have any questions.
NOTE: Persons are advised to check with an accountant or tax attorney to verify eligibility and details regarding any tax information on this website.
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) and it was your principal resident. 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 principal residence home for at least 2 years (the use test).
- Acquired the home through a normal purchase and not a 1031 exchange.
Diamond Title will give you a 1099-S form at closing which along with a copy of your signed settlement statement or closing disclosure can be provided to your accounting profession for preparing your tax returns for that year.
Before answering "what is title insurance", it might be best to first answer "What is a title?" "Title" is the ownership of 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, the title is transferred by a deed which is recorded in the land records of the county in which the property is located. Generally, when a property is sold, an attorney for the Buyer or a title examiner goes to the Courthouse and searches the land records for any title defects. A title defect is anything in the history of ownership of a piece of real estate which may encumber or be a lien on 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 that title insurance protects against. In short, if you have an owners 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 potential title defect.
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; whether an unknown heir of a previous owner had a valid claim against the property; or whether fraud has been committed. Without your owner's title insurance, you may have no avenue of recovery for these types of problems.
In almost every instance, a lender will require you to purchase a 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 the record bear the substantial risk of the damage and legal costs of defense. The owner’s title insurance will protect you against any covered loss from the failure of title up to the full amount of the policy which most times is your full purchase price.
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:
- Fraud in connection with the 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 the date of the will
- Inadequate surveys
- Incorrect legal descriptions
- Nondelivery of deeds
- Unsatisfied claims not shown on the 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 the grantor
Yes. There are three different types of Title Insurance. A Lender's Policy, Basic/Commercial Owner's Policy, and the Owner's Residential or Enhanced Policy. Lender's Coverage is required by most all 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 Basic/Commercial ALTA 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 Residential Enhanced Policy covers you, the owner against all that is included in a standard ALTA Basic/Commercial policy but with additional and enhanced coverage only available for residential properties. For an estimate of costs for title insurance, please see our underwriters title insurance rate calculator. (https://ratecalculator.fnf.com/) Subject to limitations, some of the benefits of an Owners Residential Enhanced Policy include:
- Mechanic’s lien coverage is provided for work done prior to the date of your policy.
- Zoning coverage is now provided, ensuring 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 your property without permission.
- Coverage is provided for forgeries affecting your ownership after the date that your title insurance policy is issued.
- Deed to a purchaser by an unlawful seller who sold the same property to more than one buyer.
- Federal estate or state inheritance tax liens. (may attach without recorded notice
- Building Permit Violation