Smith&wilson

We complete over 100 real estate transactions each year ranging from family transfers to contracts for over a million dollars, from vacant land to commercial properties.

As you should be aware, there are many complexities that can develop in real estate transfers. There are several issues that can be addressed on a general level that all the parties should be cognizant of.

NOT UNDERSTANDING THE LENGTH
OF THE BUYING/SELLING PROCESS

You know what happens when you make decisions based on optimism, time-on-the-market averages and generous promises -- ‘Murphy's Law’ kicks in. The home-selling process is often more drawn out than you think, from the early planning, to arranging financing, to difficult negotiations, to final inspections, to oft-delayed closings. Knowing that you may need to give yourself extra time to complete the deal is a valuable thing to keep in mind.

Several real estate sales over the years come to mind that had minor issues, yet the sale was almost lost over something that may have cost $500. When you are selling your home, keep the big picture in mind rather than allowing yourself to get hung up on something small. Is it really worth loosing your sale over something small or over an inexpensive repair? Being inflexible or unwilling to compromise is not the answer. Sometimes it is necessary to be flexible when it comes to the sale of your home. If you’re not willing to budge about the date you move out, price, necessary or requested repairs, etc., the buyers can become discouraged or even angry. Seeing the other side of the coin is often a good way to gain perspective. Agreeing to a repair that might cost a couple of hundred dollars might actually save you much more on interest on your home loan in the long run. While I’m not suggesting that you should give away hard-earned equity; often sellers must look at the overall savings involved.

NOT UNDERSTANDING THE COSTS

Be prepared for closing costs – For the buyer, in addition to the down payment, recording fees, mortgage tax and tax adjustments, you will be required to pay other fees and other closing costs at the time of the final transaction. Closing costs typically range from 2 percent to 6 percent but will be dependent upon your situation. Lenders must provide you with a "Good Faith Estimate." The "Good Faith Estimate" will breakdown all costs so that you may know what to expect at closing.
For the seller, in addition to the broker/agents fees, you will be responsible for the cost of the abstract report, tax and other searches, transfer tax, mortgage pay-offs, tax adjustments, surveys (although this may be negotiable).

Our office will provide you with a detailed closing statement outlining all costs and expenses of your sale or purchase.

WHY THE BUYER NEEDS TITLE INSURANCE

Title Insurance is oftentimes required for the following reasons: Without a title insurance policy, you may not be fully protected against errors in public records, hidden defects not disclosed by the public records, or mistakes in examination of the title of your new property. As a result, you may be held fully accountable for any prior liens, judgments or claims brought against your new property. However, your title insurance policy insures that if such an occasion arises, you will be defended free of charge against all covered claims and paid up to the amount of the policy to settle valid claims. With a title insurance policy you need never worry that your new property's history will tarnish your bright future.

How Much Does it Cost?

A title insurance policy is more cost-effective than some other kinds of insurance you have had to purchase. For a single, one-time-only fee, we provide a title policy that remains effective until the property is sold to a new owner - even if that transaction does not take place for decades.

What if some matter arises affecting
the past ownership of the property?

The title insurance company would defend and protect the interest of the lender. The purchaser, however, would have to assume the financial burden of his or her own legal defense. If the defense is not successful, the result could be a total loss of title. The title insurance company pays the owner's loss.

How can there be title defect if the title has been searched
and a loan policy issued?

Title insurance is issued after a careful examination of copies of the public records. But even the most thorough search cannot absolutely assure that no title hazards are present, despite the knowledge and experience of professional title examiners. In addition to matters shown by public records, other title problems may exist that cannot be disclosed in a search.

What title insurance protects against.

Here are just a few of the most common hidden risks that can cause loss of title or create an encumbrance on title:

• Forged deeds, releases or wills, Misinterpretations of wills, or Undisclosed or missing heirs
• Instruments executed under invalid or expired power of attorney
• Mistakes in recording legal documents
• Deeds by persons of unsound mind or Deeds by minors
• Deeds by persons supposedly single, but in fact married
• Liens for unpaid estate, inheritance, income or gift taxes
• Fraud

What protection does title insurance provide
against defects and hidden risks?

Title insurance will pay for defending against any lawsuit attacking the title as insured, and will either clear up title problems or pay the insured's losses. For a one-time premium, an owner's title insurance policy remains in effect as long as the insured, or the insured's heirs, retain an interest in the property, or have any obligations under a warranty in any conveyance of it. Owner's title insurance, issued simultaneously with a loan policy, is the best title insurance value a property owner can get.