Lender’s title insurance is a type of insurance that protects the lender from any financial losses that may incur as a result of owning a property, while you’re paying them back for the loan.

Lender’s title insurance works like a backup plan to protect the lender in case any unforeseen issues surface that were not discovered during a title search. These issues can range from an undisclosed heir to a mistake in ownership history.  These title issues may result in casting doubt on the ownership of the property and potential cause you to lose ownership of it.

Here are some common questions and answers about lender’s title insurance.

• Am I legally required to buy a policy?
• Is this the same as the owner’s policy?
• If the lender’s policy is purchased, do I still need an owner’s policy?
• How much does a lender’s policy cost?
• Who pays for the lender’s title insurance policy?
• Who picks the lender’s title insurance policy?

Am I legally required to buy a policy?

Yes, you are legally required to buy a policy, and most lenders require that the borrower (the home buyer) purchase the lender’s title insurance policy.  The lenders requires this to protect themselves in case someone lays claim to your property.  [Read more…]

An owner’s title insurance policy is protection for a homeowner against people who could try and take the deed from them.  The owner’s title policy should be purchased before closing on the property, and the policy protects homeowners from issues like clerical mistakes, liens, or money owed to contractors.  Having a policy can also protect the property owner from unknown heirs claiming the property is rightfully theirs.  There are numerous ways you could lose your house and an owner’s title insurance policy is what provides you with more security from this happening.

Now that you know what an owner’s title policy is, here are some common questions and answers you may have.  

• Is it required by law?
• What is the difference between Owner’s and Lender’s Insurance?
• Can I purchase a policy after closing?
• What does a policy cost?
• Is it the same as homeowner’s insurance?
• What does my policy protect?

Is It Required by Law?

No, you are not legally required to have an owner’s title insurance policy by law.  But it isn’t advised to go without. If someone lays claim to your property, or a mistake was made during the title search, you will more than likely be legally and financially responsible.  You may also lose your house or land.  

Is There a Difference Between Owner’s and Lender’s Policies?

The difference between the two policies is that one protects the lender if you have a mortgage, and one protects you as the homeowner.  You can learn more by reading this post about the difference between a lender’s and owner’s title insurance policy here.

Can I Buy Owner’s Title Insurance After Closing?

Yes, you can purchase a policy at any time.  But you should be aware that anything that happens in between the closing appointment and the time of purchase probably will not be covered.  You’ll have to talk to the title insurance company to find out for sure as each company is different.  

How Much Does Owner’s Title Insurance Cost?

The cost of an owner’s policy depends on the valuation and actual cost of the property at closing. Because the policy is paid in full, and at once, it does not go up or down over time, even if the value of the property you purchased fluctuates.  

Is There a Difference in Homeowner’s and Owner’s Title Insurance Policies?

The difference between homeowner’s and owner’s title insurance policies is that homeowner’s protects the items within your home, and sometimes the features on your property like a pool or a shed.  Your title insurance policy protects your ownership of the property itself. Neither are legally required, but both are highly recommended to protect your valuables and your ownership of your land and your home.  

What Does Owner’s Title Insurance Cover?

Your policy will cover everything related to the ownership of the deed.  A better way to think of this is what does your policy protect you against.  

The list can include:

• Unknown heirs and previous owners who had children out of wedlock
• Contractors who are owed money 
• Liens
• Zoning issues
• Typos, writing, filing and clerical errors from previous transactions and city records
• And more.

If you have questions about owner’s title insurance policies, we’ll be happy to help with them.  Write us at info@atgtitle.com or call 703.934.2100.

A title commitment is a document from a title company which says the property you are buying will be able to have a title insurance policy after you close the sale.  The document contains the same information that will be included in the actual insurance policy, but it is not underwritten or ratified until after closing.  This also means that a title commitment is not legally binding.

One of the reasons title commitments are not be legally binding is that title commitments will state if any conditions must be met like the homebuyer paying unpaid taxes, in order for the title company to issue an insurance policy.  If these items are not completed, the person will not be able to get an insurance policy.  Title commitments also list what the insurance policy will and will not cover once it is written. 

Those are the main differences between a title commitment and a title insurance policy.  The insurance policy is legally binding where the title commitment is not.

Now that you know what a title commitment is, you may be wondering if there are other differences between this document and your actual insurance policy.  If it is required by law, or if it is just for a peace of mind. Look below to learn everything about title commitments and the home and land buying process.

Is a Title Commitment Required By Law?

No, title commitments are not required by law, but if you are buying a home, your agreement with the seller will probably require that the seller provides you with a copy of their title insurance policy.  Also, if you are taking out a mortgage, the lender may require you get a title commitment before they sign the final documents to give you the loan. 

The document will contain all of the items that your title insurance policy will not cover.  This is what the lender will want to see.  They need to protect their investment when they loan you money, and this is another reason why title commitments are important for you to have if you want a successful and easy closing. 

Is a Title Commitment the Same as Title Insurance?

No, title insurance is the legally binding agreement that you get after the closing of a property sale.  A title commitment just says that the title company will agree to provide you with a policy. There are also two types of title insurance policies.  You can read about the difference between a lender’s and owner’s title insurance policy here. 

Is it the Same as a Marketable Title?

A title commitment is different than a marketable title in that it does not guarantee there will be zero issues with the deed to the property you are buying.  Instead, this document only says that you will be able to have an insurance policy on the property, and only if you’ve cleared all requirements by the title company before closing.  

What is the Title Commitment Form and What Should I Look For?

This is the form that is normally provided by ALTA.  It is a standardized document that all title insurance companies will be able to access and provide you with.  You can download a sample form here.

The most important things to look for on the form are what is not covered, and what potential issues could arise.  The issues themselves are what can cause a deal to fall through, or if it is from the seller, what potential issues you may inherit.  These issues can include encroachments, claims on your property, liens, debts owed, incorrect boundary lines, improper zoning and easements to name a few. 

If you have any questions about title commitments, or need help with a closing, contact us using the phone number or email at the top of this page and we will be happy to help.  

When buying a home you’ll hear about property surveys.  Each type of property survey has a direct impact on the land and home you’re buying.  The information could include the history of the land, the topography, and the types of insurance and protections you’ll need if you buy it, build on it or invest in it.    

The 9 Types of Property Surveys Include:

• Property line (also known as the boundary line survey) – These map out the lines of your property, how far your home is from the edge of the land, and this one is given to you by the title company.  
• ALTA – This covers all characteristics and features of a survey.  
• Location – These are done to help make sure that the property you are buying is properly zoned.  
• Construction – These help to determine each of the structures that exist on the property.
• As-built – This one will outline property lines and also determine where there could be flaws and ways to fix or improve on them.  These recommendations may include features that cross onto a neighbors property like a driveway.
• Topographic – This one will help you to learn about the topography of your property.
• Site-planning – These are performed to help determine the way to utilize the space whether it is for residential or commercial use, and how to design the plot of land.
• Mortgage – This option will show the property lines as defined for what will be covered in a mortgage.
• Sub division – these are used to help divide the land into smaller plots.

The most common property surveys are the location and the boundary line surveys.  They will more than likely be requested by the title company so be prepared to have them done.  The other types of property surveys are normally only requested under specific circumstances, so you probably do not need to worry about them.

Who Does Property Surveys?

Property surveys are typically done by the National Society of Surveying Professionals.  However the property surveying company you use does not always have to be associated with this organization. When selecting a title company, they’ll be able to recommend a property surveyor that they trust, so you know you’ll be in good hands. 

How Much Does a Property Survey Cost?

Property surveys can range from $100 to $1,000+.  It all depends on the history of the property, the structures that exist, and the type of survey you need done.  You are paying for the surveyor’s time, not a flat fee for a specific project.  

Where Can I Find Previous Property Surveys of My Home?

The title company who worked with you when you bought your home, or whomever sold you your title insurance policy will have access to any surveys done on the property.  That is where you should start. If nobody has a record, you may want to contact the closest title company to you and ask who they would recommend for a survey.  

Why Are Property Surveys Important And Which Do I Need?

Property surveys are important because they help you to determine what you own, what may become public property in specific situations, if you’re zoned properly, and to help settle land disputes with neighbors.  

Property line or boundary surveys are the most important and most common.  You need them to determine where and how far you can extend your home.  You’ll need to have one completed if you want to build a fence and need to know where the posts and border should be.  This survey also helps to settle arguments with neighbors if they feel you’re driveaway or the structures on your land cross over to their property.  With that said, the others are important too.

Floodplain and topographical property surveys will let you know if you should buy flood insurance, or what could potentially happen with a natural disaster.  Site planning will give you the information to properly design the space of your property whether you’re adding a pool, building an addition or tearing down a home and rebuilding it from scratch.  

Property surveys are an important part of buying a property and it can be risky to not have them done.  If your property is not zoned correctly, if you have the wrong structures, or if your structures cross over onto your neighbors property, you could have someone lay claim to your home or get fined.  That is why it is important to have them done. It is a peace of mind you won’t want to pass up.  

Stratified real estate markets may sound confusing, but don’t let terms like stratification scare you.  It is simply taking an area like a city or region and dividing it out into similar or equal sections.  For real estate, you can take a city or neighborhood and break it out by the value of houses or specific house types.

The reason you want to do this is to help determine if you are about to enter into a buyers’ market or a sellers’ market.  By looking at your target area in stratified segments, it can help you to make a decision on whether it is time to buy or sell a home, or wait until the market changes to your favor.  Ready to learn more?  Here is how to stratify your area and determine what you should do if you’re looking at buying or selling a home.

What is a Stratified Market in Real Estate?

A stratified market in real estate is when you take a city and divide it into classes based on home value and type.  Because homes in many cities can have drastic differences in price (they can range between $20,000 and $1,000,000+), the buyer base and housing availability for that base can change making it harder to determine when to buy or sell.  The same can be said if you have condos vs. homes for families with kids, and what types of home buyers are moving in and out and at what pace.

To get a stratified market, start by looking at what the value of the home you want to buy or sell is.  Next take a random sampling of houses that match both the price range and type (single family, row houses, condos, beach homes, etc…) and look to see how many are on the market.

Now look to see how long they’ve been on the market, if the prices keep going up, stay steady, or have been getting marked down.  Now you know if the type of property you’re looking to buy is in demand (a sellers’ market), or if there are more for sale then there are home shoppers (a buyers’ market).

Using Stratification To Determine When to Buy or Sell

Once you have the area you want to buy or sell a property in broken out into groups, you can determine if you live in a buyers’ market or sellers’ market like we outlined above  If you are looking to buy a single family home for $250,000, but keep hearing it’s a sellers’ market, check first to see what is actually selling and what isn’t moving much.

It could turn out that there is demand for luxury homes over $750,000 that are on a golf course or the beach.  Within that same area, the homes which are close by the beach but not directly on the water, and that are in your price range may not have moved.  That means the luxury real estate market is for sellers and the regular price range is a buyers’ market.  That is why you may hear one real estate agent say it’s a sellers’ market and another say it’s a buyers’ market.  Both may be true, depending on the real estate market stratification.

By creating stratified groupings, it turns out that the luxury markets are for sellers because you have overseas investors buying them up, wealthy people moving to your area for work, or any number of reasons.  But a nice home that is within your price range, and stratified group, is a prime investment and now is the perfect time to buy.

These types of examples are more common along the coastal cities in Florida or California where it is easier for people in other countries to buy properties as investments in the USA and let them sit.  They want the land on the coast where their money can be stable while other people are looking for a place to live that is safe and has desirable amenities like schools, dog parks, and all of the things which would cause someone to want to live there.  But it also occurs in the midwest, the south and other regions of the United States.

If you’re looking to find out whether you should buy or sell, start by using stratification.  Once you have a stratified real estate market, it’ll be easier for you to determine what your next move should be.  Buy or sell a home, or wait for the right time when you can get the best bank for your buck based on your needs.

Staging a condo seems easy enough, but how can you use the space to turn more lookers into offers?  We’ve got you covered.  Below you’ll find nine unique tips to stage a condo (or home).  By using these unique strategies, you may be able to turn more lookers into offers on your listings.

• 9. Remove All Allergy Related Decor.

  Empty windows and tables with no accents or decor are dull.  But during allergy season, someone who suffers needs an escape from all plant life.  Instead of flowers which can be associated with sneezing, itchy eyes and being uncomfortable, think about things that create a calming and homelike feel.  Window ledges are perfect to stage a place to sit or as a space for books.  You could even place  a small table in front where you display a statue.  Dining tables can use candles and tasteful sculptures as a substitute instead of a bouquet of flowers or a plant.  The best part is these can be saved and reused where a plant will die and need replaced.

• 8. Use Window Blinds to Display a View and Close Off a Wall.

  Recently I was helping a realtor stage a condo, and the living room had two giant windows.  One with an open view and one with a partially blocked one.  Both windows were wide open which to me made the space feel smaller and less friendly.  I recommended we close the partial view window and place a large piece of furniture or changing screen by it so that as the buyer moves through, they see the view from the unobstructed window and not focus on the window which was half blocked by a brick wall.

  Potential home buyers were not discouraged from seeing the partial view, but we made sure to close the window blinds after they looked so when the next person comes in, and as the current potential buyer leaves, both see and remember the best of the condo and that is what sticks with them.  Not a partial brick wall and a partially obstructed view.

• 7. Use Mirrors and Open Doors.

  City life can feel claustrophobic and condos aren’t always the largest spaces.  By changing out some artwork for mirrors, you can help people feel like there is more space and they are less closed in.  The same goes for doors.  Keep them open, even the bathroom doors, can open the flow of the room.  But make sure to turn on the lights.  When the traces of light come in and out, you make the space appear to have more flow which can create a feeling like there is more room than there actually is.

• 6. Prevent the appearance of sloped, curved or slanted floors.

  It’s a bit awkward, even if there are zero foundation issues, to see floors which look or feel slanted and sloped.  I was walking through a condo with a real estate agent a couple months ago and notice the floors appear to travel down at an angle, but they actually weren’t.  By placing a large area rug at an angle, a couch not against the wall, and creating a sitting area that was not following the lines of the walls we got rid of the effect making the space feel more comfortable for potential buyers.

• 5. Do Not Overpower the Space.

  Condos and some houses have very limited space.  If the furniture and artwork you use to stage the rooms take away from the actual area, insteading of bringing the buyers eyes to the room itself, the deal could fall through.  Use decor and furniture to complement the area, not the other way around.

• 4. Use artwork and interesting items to hide flaws.

  No property is perfect.  Some units or rooms have flaws that can be easily fixed once the home is purchased like a scratch in a floor or broken piece of molding.  There is nothing wrong with adding something that has visual appeal to distract from these temporary and easy-to-repair flaws like an interesting lamp or conversation piece.  Just make sure it doesn’t also distract from the selling points like we mention in the tip above.

• 3. Use the Weather Outside to Create a Welcoming Atmosphere.

  If it is raining outside or chilly, provide hand warmers, paper towels to dry the visitors wet face or hands with, and some hot cocoa at the entrance to the unit.  If it’s sunny, place cold bottles of water, iced tea or lemonade with a bucket of ice, or other cool and refreshing consumables at the entrance.  If it is spring or fall and allergies are bad, have small packets of tissues the visitors can take with them that also have your business card.  By doing this you help to create a happy and welcoming feeling for the potential shopper as they enter their new home.  As they consider and remember what they saw, they’ll remember how warm and inviting it was from the time they entered to the time they leave.

• 2.  Remove Any Signs of Pets.

  From photographs on the walls to pet beds on the floor, pull them out.  This isn’t just about allergies, it is about potential buyers assuming there are pet smells even when there aren’t.  Our minds and senses play a lot of games with us.  If the potential buyer is not an animal lover, they could assume there is a smell that actually isn’t there and that could kill the deal.

• 1.  Bake Cookies.

  You can bring your own batter, or simply buy premade and sliced from the store.  Once you get to the condo, bake the cookies.  Not only does this create a pleasing smell, but it may help to drive a warm, happy and cozy feeling to a potential buyer.  Much like the pets creating fake smells, and city life feeling busy and claustrophobic, a warm childhood memory and the pleasant smell of a freshly baked cookie creates a lasting feel as the person leaves and could help to tip the scales into your listings favor when they make a decision on which home to buy.

Staging a condo is an art form.  You have limited space and you’re competing against a ton of other properties.  Instead of simply throwing in decor with mass appeal, think about how you can create a welcoming and happy experience that causes the potential buyer to feel at home.  By doing this you may be able to convert more lookers into full offers.

When you find the right home, or know what you’re looking to spend, you’ll need to find a mortgage lender.  But before you can get approved for a loan, you have to find the home that you want to buy.  This is when you’ll want a lender to provide you with a Good Faith Estimate (GFE).  A good faith estimate is a form that includes all of the fees, payments, and financial information that you will be provided with by that specific lender.

The Good Faith Estimate Process

The eight steps in the process for a good faith estimate include:

1. First you need to get prequalified by the lender
2. Now you can go house shopping
3. Next you put a contract on the house
4. Once the contract is in place, you submit the pre qualified letter
5. Now the contract is ratified (approved)
6. After ratification, you’ll fill out a 1003 (Loan Application)
7. Next you should get approved
8. Three days after approval, you must receive a GFE from the lender

Now that you know the process, here is some more information to help answer any additional questions you may have about good faith estimates.

You Can Get Multiple Good Faith Estimates

You are not limited to only one good faith estimate.  You can acquire a good faith estimate from numerous lenders and banks so that you can shop for a loan that helps you buy the property that you want and aligns more closely with your wants or situation.

If the first lender gives an estimate, but it won’t cover the home you want, you can get a good faith estimate from another lender who will cover the cost of the property and closing.  You can also use this document to prove that you’ll be able to purchase the property once you are ready to begin closing the deal.

What Fees Are Covered and Not Covered by a GFE

One common question is if a good faith estimate covers closing costs.  A good faith estimate does not contain all of the closing costs, but it may have an estimate.  If you already have the property you’d like to buy picked out, the estimate should be more accurate than if you are still shopping for a property.  Because you can choose your own closing agent, the price could vary which is why you get an estimate and not an exact number.

A good faith estimate does include the costs of the loan, the terms of the loan, and almost all other finances for buying a home and using a lender.  Other fees which will not be included in your GFE include a title insurance policy, additional inspections, and other miscellaneous items.

Talk to your real estate agent, or the closing and settlement agent to find out any additional fees which may not be covered by the lender or in the GFE.

Bonus tip: You get to choose your own title, closing and escrow companies.  By shopping around you can find a great deal and sometimes lower some of the expenses when buying a home.

In some cases, and depending on how you negotiate when shopping, the seller of the house may be willing to pick up some of the costs outlined in the GFE, but that will depend on how quickly the seller wants to sell and your specific situation.

Where to Download a Sample GFE Form

As mentioned above, the GFE is a form you are provided with.  You can find a sample and download a good faith estimate form on the HUD website by clicking here.  The good news is you do not have to fill this out yourself.  It is handled by the lender.

A good faith estimate is not as scary as it may look when you first see it.  Your real estate agent and closing company look at these regularly and should be able to assist with any questions you have.  If you don’t feel comfortable asking them, we are happy to help.  Contact us at info@atgtitle.com and one of our professional closing agents will be happy to alleviate any worries you have, and walk you through how we can help you with a hassle-free closing.

When buying a home, whether it’s your first or third, you’ll be asked if you want a title insurance policy, and probably be looking at homeowner’s insurance policies too.  Although they may sound the same, especially both the lender’s and owner’s title insurance when combined with the homeowner’s insurance, they each serve very different purposes.

• A homeowner’s insurance policy can protect your home and your belongings in case of damage, but only based on what you agree to when signing. It could be natural disasters, malfunctioning appliances, or losing your home and valuables to fire or burglary.
• A title insurance policy protects your ownership of the house itself, but not the property, land or the items inside. Just your ownership.  But there are two kinds of policies.
  • Lender’s title insurance – this plan protects the lender if you have a mortgage or took out money to buy the property.
  • Owner’s title insurance – this option protects you and your investment in case someone lays claim to the property.

Am I Legally Required to Buy Homeowner’s & Title Insurance?

No, you are not legally required to buy a homeowner’s or title insurance policy.  But there are many things which can go wrong, and if you want to have your house and your land protected, you will want to consider both policies.  With that said, it is also not legally required to get a lender’s title insurance policy either, but it may be required by the lender if you want their money.

Just like how you want to protect your property, money and yourself; lenders including banks and investors want to protect their companies and their assets.  By loaning you money, a lender’s title insurance policy provides them with a security blanket in case something goes wrong.  Many lenders add a stipulation to the loan that you must purchase a lender’s title insurance policy, but it is not a legal requirement.  However, if you don’t get it, they may not give you the money to buy the property.

Now that you know why they are both important, there is another frequent question that comes up.  Can the insurance policies transfer to someone else?

Whether it is a significant other, a child, a friend or a family member, your title insurance policy cannot transfer over, but they can purchase a new policy during the closing when they inherit or purchase the home from you.  Homeowner’s insurance on the other hand may not need to be repurchased depending on the situation.

If the other person’s name is already on the property, you can also have them sign or be added to the policy.  Now if the worst happens, you won’t have to worry.  The other question is about transferring the two policies.

Title insurance cannot be transferred to a new home if you move or buy a new house.  It only protects the deed on the property it was meant to cover.  Your homeowners insurance policy however could be applied to a new home.  The insurance company that wrote the policy may need to adjust it, but the process is pretty simple.

There are a lot of similarities in the names owner’s title and homeowner’s insurance, but as you can see they are very different.  One covers your home and the items inside, the other covers your ownership of the land and house.  Neither one is legally required, although this could change at some point, but they are both recommended.

When you find the right home, or know what you’re looking to spend, you’ll need to find a mortgage lender.  But before you can get approved for a loan, you have to find the home you want to buy so that you can find out if you’ll be approved for enough to cover the cost of the home.

Sounds like a double edged sword huh?  Don’t worry, it’s actually pretty easy because you can have a lender provide you with a Good Faith Estimate (GFE) as long as you have a reasonable idea of what you are willing on a house or property at a maximum.  It is a fairly painless and quick process.  Having a Good Faith Estimate or GFE also lets sellers know you’re serious and will have the capital to purchase the property.  This is especially important in competitive markets.

The Process of Getting a GFE is:

1. Get prequalified thru lender
2. Shop for and find house
3. Submit contract (k) for sale
4. K gets approved
5. Fill out loan app (1003)
6. Lender approves 1003
7. Lender has 3 days after approval to issue to borrower GFE
8. Covers estimated closing and most importantly estimated monthly payment

But what happens if you don’t get approved for the amount you need, or the loan estimate doesn’t seem fair, you don’t have to worry.  You are able to get multiple GFEs from multiple lenders.

What is a GFE and What Does it Look Like?

A good faith estimate is a form that includes all of the fees, payments, and financial information that you will be provided with by a lender. As stated above, you are not limited to only one good faith estimate.  You can acquire a good faith estimate from numerous lenders and banks so that you can shop for a loan that helps you buy the property you want and meets your specific needs.

Which Fees Are Covered and Not Covered by a GFE

One common question is if a good faith estimate covers closing costs.  Yes, your good faith estimate is inclusive of closing costs, the loan, the terms of the loan and almost all other finances for buying a home and using a lender.  Some of the fees may be an estimate if you do not already have the property picked out, but if you do, it should be close to accurate.

However, title insurance, additional inspections, and other miscellaneous items may not be included.  You’ll want to talk to your real estate agent, or the closing and settlement agent to find out if there will be any additional fees that may not be covered by the lender or in the GFE.  This is because you can choose who your title, closing and escrow companies are.  By being able to choose you can potentially save money, and because you may not have one picked out when getting the GFE, the lender will only be able to estimate based on industry averages.

In some cases, and depending on how you negotiate when shopping, the seller of the house may be willing to pick up some of the costs outlined in the GFE, but that will depend on how quickly they want to sell, and also on your specific situation.

Where Can You Download a Sample GFE Form?

As mentioned above, the GFE is a form you are provided with.  You can find a sample, and also download a good faith estimate form on the HUD website by clicking here.  The good news is you do not have to fill this out yourself.  It is handled by the lender.

A good faith estimate is not as scary as it may look when you first see it.  Your real estate agent and closing company look at these regularly and should be able to assist you with any questions or concerns you have with the good faith estimate form.  If you don’t feel comfortable asking them, we’re also able to assist.  Contact us at info@atgtitle.com and one of our professional closing agents will be happy to alleviate any worries you have, and walk you through how we can help you with a hassle-free closing.