Valid photo ID (drivers license or state-issued identification card, passport)
- Certified check made payable to GCS Title if closing funds are over $1,000.00
- Personal checkbook, for any charges that may arise at the closing table
- Certified documents if requested by GCS
Also, you’ll want to contact your future utility companies (electricity, energy, cable/internet, water, etc…) in advance and set up your service/account for your closing date.
- Valid photo ID (drivers license or state-issued identification card, passport)
- Certified check made payable to GCS Title if closing funds are over $1,000.00 and a personal checkbook, for any charges that may arise at the closing table
- Any Certified documents (if requested by GCS)
- Keys and garage door opener(s)
- Unless other arrangements have been made with GCS Title, if you are married, both spouses are required to attend the closing. If there is more than one owner, all owners are also required to attend closing.
Also, you’ll want to contact your utility companies (electricity, energy, cable/internet, water, etc…) in advance to cancel service and any auto-pay you may have set up.
1. Errors in public records
To err is human, but when it affects your homeownership rights, those mistakes can be devastating. Clerical or filing errors could affect the deed or survey of your property and cause undo financial strain in order to resolve them.
2. Unknown liens
Prior owners of your property may not have been meticulous bookkeepers — or bill payers. And even though the former debt is not your own, banks or other financing companies can place liens on your property for unpaid debts even after you have closed on the sale. This is an especially worrisome issue with distressed properties.
While the chain of title on your property may appear perfectly sound, it's possible that a prior deed was made by an undocumented immigrant, a minor, a person of unsound mind, or one who is reported single but in actuality married. These instances may affect the enforceability of prior deeds, affecting prior (and possibly present) ownership.
When a person dies, the ownership of his home may fall to his heirs, or those namedwithin his will. However, those heirs are sometimes missing or unknown at the time of death. Other times, family members may contest the will for their own property rights. These scenarios — which can happen long after you have purchased the property — could affect your rights to the property.
Unfortunately, we don't live in a completely honest world. Sometimes forged or fabricated documents that affect property ownership are filed within public records, obscuring the rightful ownership of the property. Once these forgeries come to light, your rights to your home may be in jeopardy.
When it comes to owning a home, three can be a crowd. At the time of purchase, you may not know that a third party holds a claim to all or part of your property — due to a former mortgage or lien, or non-financial claims, like restrictions or covenants limiting the use of your property.
You may own your new home and its surrounding land, but an unknown easement may prohibit you from using it as you'd like, or could allow government agencies, businesses, or other parties to access all or portions of your property. While usually non-financial issues, easements can still affect your right to enjoy your property.
You may have seen several surveys of your property prior to purchasing, however, other surveys may exist that show differing boundaries. Therefore, a neighbor or other party may be able to claim ownership to a portion of your property.
When a property owner dies with no apparent will or heir, the state may sell his or her assets, including the home. When you purchase such a home, you assume your rights as owner. However, even years later, the deceased owner's will may come to light and your rights to the property may be seriously jeopardized.
Common and similar names can make it possible to falsely "impersonate" a property owner. If you purchase a home that was once sold by a false owner, you can risk losing your legal claim to the property.
Play it Safe
These and other issues are often covered by an owner's policy of title insurance. When you buy a home, make sure you're protecting that investment with title insurance.
Basic Real Estate Glossary
Adjustable Rate Mortgage (ARM) - A mortgage whose interest rate over the life of the loan is not necessarily the same as the original interest rate at the loan inception. Rate changes may go up or down and are usually tied to an economic indicator and a time period. The person getting the mortgage should check to see if these fluctuations have a cap, and make sure they are comfortable with whatever that cap is. Some ARMS are convertible to a fixed interest rate after a period of time.
ALTA American Land Title Association
Annual Percentage Rate (APR) – Required by the Federal Truth-in-Lending-Act, this details the amount of money financed. The APR is the true cost of borrowing money, which includes the total finance charges added to the principal amount.
Appraisal - A professional determination of value. Mortgage companies usually require an appraisal of the property by a licensed, disinterested party before agreeing to loan money on the property. Methods of determining value may be based on many things, such as comparable sales in the area, the cost approach, the income approach, or the highest and best use of the property.
Assessed Value - The value used by the governing authority (i.e. either the local government or the condominium association) by which to levy a tax or fee on the property owner.
Balloon – A mortgage where there are payments over a period of time but the final payment is a lump sum which is quite large, compared to the previous payments.
Bill of Sale – A document that serves as written proof for the transfer of title. Real estate is transferred by a deed. Personal property is transferred by a Bill of Sale. Mortgage companies will not make loans on personal property, and a Bill of Sale may be included with a real estate contract to outline what personal property is being transferred to the new owner.
Certificate of Title - A statement verifying who has the rights and responsibilities of ownership in a property. This may be ascertained by a public record search but does not guarantee that any other parties may not stake a claim to the property. Title insurance protects against claims that may arise against the title.
Chain of Title The history of ownership of a parcel of real estate; each deed or other instrument transferring the title is called a link and all of these links make up the chain of title.
Clear Title - Ownership that is free of liens, defects and encumbrances, beyond those which the the owner agrees to accept.
Closing Costs – The expenses incurred in obtaining the property and transferring title to the new owner. This may include, but is not limited to attorney’s fees, points, title charges, credit report fee, document preparation fee, mortgage insurance premium, inspections, survey, appraisals, prepayments for property taxes, deed recording fee, and homeowners insurance.
Cloud on Title An irregularity, possible claim, or encumbrance, which, if valid, would adversely affect or impair the title.
Contract for Deed – (land contract) An agreement to sell and purchase under which the legal title is withheld from the purchaser until such time as the required payments to the seller have been completed.
Contingency - A condition that must be met before a contract is legally binding, or before a sale is to be completed. The contingency provides an out or an escape from performing if the condition is not met.
Conventional loan or conventional mortgage - A real estate loan, which is not insured by the government agency FHA nor guaranteed by the Veterans Administration. Typically subject to the terms of their particular institution, the conditions may be more flexible, as the lender is not required to follow federal guidelines. The lender looks to the credit of the borrower and the security of the property to insure payment of the debt.
Conveyance - The passing or transfer of title from one party to another.
Easement a right of one person to make limited use of another’s property, for example, the right to cross a property and maintain a road or right-of-way to install and maintain public utility services.
Eminent Domain – The right of local or state government to purchase private property for public use. Owners receive compensation based on fair market value and sometimes additional funds for the inconvenience of moving. This is legal under the Fifth Amendment of the United States Constitution. Reasons for eminent domain can include schools, roads, parks, hospitals, public safety and other public buildings.
Encroachment extension of an improvement onto the lane of another.
Escrow – A neutral third party holds other people’s funds in a secure account for future use. An earnest money deposit is held in a real estate broker’s escrow account. It is the broker’s account, but he is holding the buyer’s funds in the account for safekeeping until closing. In the case of a mortgage, the total monthly mortgage payment may include funds to pay for future taxes and insurance paid in addition to the principal and interest. This escrow is held by the lender until taxes and insurance are due, at which time the mortgage company pays the taxes and insurance on the borrower’s behalf. After the taxes and insurance are paid, the lender may re-adjust the total monthly payment to insure sufficient funds for future escrowed items.
Examination as used in the title industry means to study and interpret the instruments related to the chain of title of a property and to determine their effect and condition in order to reach a conclusion as to the status of the title.
FHA - An agency of the U.S. Department of Housing and Urban Development (HUD) that was established in 1934 under the National Housing Act to encourage improvement in housing standards, to provide an insurance for mortgages, and to exert a stabilizing influence on the mortgage market as a whole. FHA was the government's response to a lack of quality housing available at the time, excessive foreclosures and a building industry that had collapsed during the Depression. FHA’s main activity is the insuring of residential mortgage loans made by banks and private lenders. The FHA sets standards for construction and underwriting but does not lend money or construct housing.
Grantee - The individual to whom interest in real property is conveyed.
Grantor –The individual conveying the interest in real property to another person.
HUD- The U.S. Department of Housing and Urban Development. This is the agency responsible for enforcing the federal Fair Housing Act. Among HUD’s many programs are urban renewal, public housing, reabhilitation loans, FHA subsidy programs, and water and sewer grants. The Office of Interstate Land Sales Registration, the Federal Housing Administration (FHA) and the National Mortgage Association (GMNA) are all under HUD.
Joint Tenancy- A legal way for parties to co-own real property with equal rights to the real estat. Should any of the joint tenancy owners die, no interest in the property can be transferred by will as the remaining joint tenant(s) acquires all ownership.
Legal Description - The written description of a piece of land giving all pertinent information such as land lot, subdivision name, Block, parcel, acreage, etc. that comprises a legal and sufficient description of a particular property. For a real estate contract to be binding it must include an accurate legal description.
Lien - A monetary claim against a property that must be paid off when a property is sold in order for the new ownership to be legally recorded in county records.
Marketable title A “good” title, one where there is no reasonable doubt as to the interest held in land; one that can be readily transferred to another party.
Mechanics Lien - A financial claim created to enforce payment for work performed and materials provided on either building, repairing or improving a structure.
Metes & Bounds - Land measurement of real property described by using directions, angles, and distances. To properly describe the subject property it begins and ends at the same point and is usually done by a licensed surveyor.
Mortgage Insurance Premium – ( MIP) - The monthly insurance paid by the borrower to offset any potential loss in case of foreclosure.
Mortgagee - The lender originating and closing the mortgage loan in their name prior to selling to a broker for investor purchase.
Mortgagor - The borrower signing the note in a mortgage loan process.
Plat – A map that is drawn to scale of a specific piece of land that shows the shape, acreage, etc. The plat illustrates the geographic boundaries of the property.
Quit Claim Deed - A document by which one property owner releases his or her claims, rights and interest in a particular property.
Settlement Statement - The form showing all fees, charges and monetary transfers involving the buyer, seller, and all parties involved in the transaction.
Special assessment - A tax or levy against real property for improvements. The fee is not necessarily imposed on all residents of a community, but to the owners of specific properties. Also, condominium owners may have a special assessment imposed for specific improvements.
Survey - The measurement of a parcel of real estate by a licensed surveyor. It shows the specific details about the measurement, shape, size and location of the property.
Tenancy in Common - A type of ownership in which two or more people have an undivided interest in property, without the right of survivorship. Upon death of one of the owners, his or her interest passes, not to the co-owner(s) but to whomever they have chosen as their heir.
Title Commitment A document that reflects all of the title research done on property. Its purpose is to inform all parties of any encumbrances affecting the property and to commit to insure property, subject to certain stated requirements.
Title Insurance - An insurance policy that may be purchased to protect the new owner from any liens or clouds against the title. In order to issue title insurance, the issuer will perform a title search in the county records. Since title is searched at the time of closing, title insurance is usually less expensive at the time of closing, rather than if a buyer called the title company at a later time, as an additional title search would have to be performed prior to issuing the insurance.
Title Search - A review done by the title company’s representative of all records available to determine if the title is indeed clear of all liens and claims.
Torrens System a governmental title registration system that uses certificates of title issued by a public official (the registrar of title) as evidence of title
Transfer Tax - A tax that is collected at closing for the transfer of ownership of real property.
Underwriter an insurance company which issues insurance policies either to the public or to another insurer. The actual company that holds reserves to pay losses on title policies, as opposed to an agent, who sells the policies of the underwriter. Also, can be the person responsible for evaluating risk of title defects and determining conditions to the commitment to insure.
Warranty Deed - A deed warranting that the grantor has clear title and promises he has the right to convey the property to the buyer.
Over the years things like tax liens, easements, and property lines may cause confusion over who has rights to the property. That’s where title insurance comes in. When purchasing a home, title insurance confirms there are no disputes over who has rights to the new property.
The one time cost of an Owner’s Title Insurance Policy is a small price to pay for the protection and peace of mind! Lenders require title insurance, that’s how important they think it is.