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Category Archives: Learn

State by State Sales Tax Rates

Sandy Gadow

  • This map indicates individual state sales base-line tax rates.
  •  Local sales taxes are collected in 38 states. In some cases, the local tax can rival or even exceed  the state rates. Local sales tax rates are adjusted depending on how much revenue is collected and how the tax affects the state’s economy.They can also vary from county to county within a state.
  • As of mid-2021, the five states with the highest average combined state and local sales tax rates are Louisiana (9.55 percent), Tennessee (9.547 percent), Arkansas (9.48 percent), Washington (9.29 percent), and Alabama (9.22 percent).
Posted in Learn, Taxes | Leave a reply

State By State Income Tax Guide

Sandy Gadow

As of 2021, seven states — Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming — levy no state income tax. Two others, New Hampshire and Tennessee, don’t tax earned wages. While Tennessee used to tax investment income and interest, the Hall income tax was fully repealed on Jan. 1, 2021. New Hampshire currently taxes investment income and interest, but it is set to eliminate those taxes soon. That will bring the number of states with no income tax to nine by 2024. Colorado, Illinois, Indiana, Kentucky, Massachusetts, Michigan, North Carolina, Pennsylvania, and Utah have a flat income tax.

Tennessee only taxes interest and dividend income.

Posted in Learn, Taxes | Leave a reply

Mortgage Payment Calculator

Sandy Gadow

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Posted in Learn

Real Estate Links

Sandy Gadow
  • Buyer Resources
  • Seller Resources
  • Escrow and Closing Resources
  • Real Estate Professionals
  • State and Regional Title Associations

Buyer Resources

  • American Land Title Association

    Learn how your title insurance dollar is divided up.

  • Annual Credit Report.com

    This central site allows you to request a free credit report, once every 12 months from each of the nationwide consumer credit reporting companies: Equifax, Experian and TransUnion. Find out when Free Annual Credit Reports are available in your state through this website.

  • CFPB - Consumer Finance Protection Bureau

    Government agency created to streamline the mortgage process. Created Know Before You Owe closing documents and mortgage disclosure forms.

  • Credit Central

    Help in finding a lender which best fits your special credit needs. They specialize in borrowers with credit problems or no established credit.

  • Fair Credit Reporting Act

    Look up your rights under the Fair Credit Reporting Act. Credit collection agencies are notorious for violating your rights under this law.

  • Federal Housing Administration

    Tells you about FHA programs in your local area.

  • Find Great Schools in Your Area

    Helpful tool for finding schools in your area

  • GoGetNotary.com

    Searchable nationwide notary directory. Review web pages of notaries and loan signing agents with their experience, service area, testimonials and photos. Articles and resources for consumers and industry professionals.

  • HSH Financial Publishers

    Leading publisher of mortgage and consumer loan information. Provides daily mortgage rates in your local area.

  • IRS Publication 530, Tax Information for First-Time Homeowners

    What You Can and Cannot Deduct - An IRS publication which outlines the deductible expenses or owning a home. Explains what expenses you can deduct as a homeowner, and points out expenses which you cannot deduct

  • Locate a Notary

    Find a notary professional and read articles to help you through the notarization and loan signing process.

  • MyMoney.gov

    MyMoney.gov is the U.S. government's website dedicated to teaching all Americans the basics about financial education. Whether you are planning to buy a home, balancing your checkbook, or investing in your 401k, the resources on MyMoney.gov can help you do it better. Throughout the site, you will find important information from 20 federal agencies government wide.

  • Quicken Loans

    Good source for mortgage shopping. Maintains a toll free number, 1-888-565-2488.

  • REALS

    A Comprehensive Real Estate Directory

  • Realty Times

    Read Sandy's informative articles at Realtytimes.com

  • Redfin.com

    Homes for sale and local Multiple Listings Service (MLS)

  • Title Fee Calculator

    Search for title insurance rates nationwide from First American Title Co.

  • Veterans Administration

    Information on VA loan guarantees

  • Zillow.com

    Real estate, apartments, home values by region

Seller Resources

  • Foreign Sellers

    Find and contact agents around the world to help you sell your property.

  • Homes for Sale by Owner

    Search for a home or list your home for sale

  • Real Estate Exchange

    Free listing and posting service to exchange real estate. Everything from shopping centers to single family homes may be listed. A true database for people wanting to exchange properties.

  • REALS

    A Comprehensive Real Estate Directory

Escrow and Closing Resources

  • American Escrow Association

    Association of escrow professionals, with focus on education and legislative issues.

  • American Escrow Association

    Association of escrow professionals, with focus on education and legislative issues.

  • American Land Title Association

    Learn how your title insurance dollar is divided up.

  • California Association of Realtors

    A trade association representing approximately 92,000 REALTORS statewide. The association offers its members business tools such as Research data and publications.

  • Chicago Title (subsidiary of Fidelity)

    Started in 1847, boasts more than 1,000 offices nationwide. Services for real estate web sites. Also contains helpful consumer articles and resources.

  • First American Title

    Has more than 1,200 offices nationwide, with international locations opening up. Regarded as the second largest title company in the country.

  • Loan Administration Netowork, Inc.

    Lists employment opportunities in title and escrow. They also offer a career network in the financing industry, including loan administration, mortgages, and loan servicing.

  • Qualia Software

    The industry’s fastest growing software for closing and title agents. Excellent customer service and implementation. Comprehensive system that is comprehensive yet easy to use.

  • Stewart Title

    Established in 1893, with more than 9,500 offices nationwide. Headquartered in Houston, Texas, also has offices in Latin America, Europe, Canada and Australia.

    Map of the USA with each state's designation as either Title or Lien; includes a closeup of the northeast and links to each of the 50 state's main website. A great educational tool.

Real Estate Professionals

  • Chamberlin Real Estate School

    Continuing education courses

  • ProU.net

    Offers prelicense and continuing education courses for business professionals. Easy and effective method of fulfilling professional education requirements. Courses for Arizona, California, Nevada, Oregon, Tennessee, Virginia, and West Virginia now offered.

  • Qualia Software

    The industry’s fastest growing software for closing and title agents. Excellent customer service and implementation. Comprehensive system that is comprehensive yet easy to use.

  • Software for Professionals

    Escrow and Closing Software programs, including HUD-1, Escrow Disclosures, Truth in Lending.

  • The Real Estate Professional

    An excellent magazine for real estate sales and management.

State and Regional Title Associations

  • Alaska Land Title Association
  • Arkansas Land Title Association
  • California Land Title Association
  • Colorado, Land Title Association of
  • Dixie Land Title Association
  • Florida Land Title Association
  • Illinois Land Title Association
  • Indiana Land Title Association
  • Iowa Land Title Association
  • Kansas Land Title Association
  • Kentucky Land Title Association
  • Louisiana Land Title Association
  • Maryland Land Title Association
  • Michigan Land Title Association
  • Minnesota Land Title Association
  • Missouri Land Title Association
  • Montana Land Title Association
  • Nebraska Land Title Association
  • New England Land Title Association
  • New Jersey Land Title Association
  • New Mexico Land Title Association
  • New York Land Title Association
  • North Carolina Land Title Association
  • North Dakota Land Title Association
  • Ohio Land Title Association
  • Oklahoma Land Title Association
  • Oregon Land Title Association
  • Palmetto Land Title Association
  • Pennsylvania Land Title Association
  • Tennessee Land Title Association
  • Texas Land Title Association
  • Utah Land Title Association
  • Virginia Land Title Association
  • Washington Land Title Association
  • Washington Land Title Association

 

Posted in Learn

Closing and Settlement Q&A

Sandy Gadow

“Closing” or settlement or “escrow” is listed as one of the top ten problem areas that occurs in a real estate transaction.  It is probably the least understood, and most feared, aspect in a property purchase. Misunderstandings about closing costs can result in hundreds or even thousands of dollars of needless expenses, and put seemingly solid deals at risk. This final step to your purchasing a home or property can go smoothly if you take a few precautions beforehand. Knowing what questions to ask and reviewing all documents well in advance of the closing day will prepare you for a hassle-free and smooth closing.

Can you learn how to save money at closing?

Can you learn how to control your closing?

Yes, you can.

Here are the answers to common closing and escrow questions to help make your home buying process go smoothly and perhaps to save you money in the process.


  1. What is closing or escrow and what is involved in opening escrow?
  2. What should a purchase agreement include?
  3. How long does a title search take?
  4. What are the most common ways to hold title?
  5. How should I go about shopping for a loan?
  6. Can I still get a loan with bad credit?
  7. How much will the closing costs be and what are they?
  8. What happens on the day of closing and can I move in on that day?
  9. When do I receive a copy of the deed to the property?
  10. I have a complaint against my escrow company. Who regulates escrow companies in California?

 

1. What is closing or escrow and what is involved in opening escrow?

Closing (also referred to as “settlement” or “escrow” in many parts of the country) is the process whereby an impartial third party, such as an attorney, an escrow company or a title company, is entrusted with the job of seeing that the transfer of ownership from the Seller to the Buyer takes place according to the terms of the written contract agreed upon by all parties involved. The closing agent keeps or holds any funds or documents safely until all the details have been settled and disburses them to the proper parties at the proper time. At the actual time of the closing, whereby all the parties come together to sign their appropriate documents, the seller will be asked to provide clear title to the property and the buyer will be asked to provide the funds needed to close the sale. If there is a mortgage or loan involved, the closing of the mortgage also takes place at this time.

Opening escrow or starting the closing process, simply involves visiting the office of any firm that handles closings, then handing over the deposit money and giving instructions for the transaction. Anyone who is involved in the transaction may “open escrow.” Generally, the real estate agent takes the initiative and opens the escrow. In for-sale-by-owner transactions, in which no agent is involved, either the buyer or the seller or both together may open escrow.

What law governs the payment of escrow funds to the proper party?

The underlying agreement between parties governs the payment of escrow funds to the proper party. The essential elements of an escrow are the irrevocable deposit of money or documents with a third person, and a valid and enforceable contract that calls for the delivery of that money or those documents on the occurrence of some condition (for example, the exchange of deed for money).

Who sets the closing date?

Either buyer or seller may set the closing date, both parties must agree to the date, and generally the buyer puts his request for a 30, 60 or 90 day escrow in the original purchase agreement. The seller may request a shorter or longer escrow, depending on his circumstances, and as long as the buyer agreed, that date will be set. Generally, a “financing contingency” is put into the offer to purchase in which the buyer is given a specified amount of time to obtain a mortgage. Once the buyer has a firm commitment from a lender, the actual closing date can usually be set. Be sure, if your are the buyer, to set the closing date prior to the expiration of your lender’s loan commitment or lock in date for your interest rate.

What happens if I need to extend the closing date?

If any party needs to extend the closing date of the escrow, all parties must sign and agree to an Addendum or Extension to the original purchase agreement contract. Be careful that the extension does not interfere with the lender’s obligation for a closing date.

Related Information
  • When is escrow opened?
  • How Prepare for Closing
  • Why the right closing date can make a difference

 

2. What should a purchase agreement include?

A purchase agreement must state clearly the terms of the sale and what must occur before the property can change hands. The agreement should state what will happen if the agreement is canceled, what personal property is to be included in the sale (be specific!), the date for the closing of escrow and what will happen if it is delayed, prorations and the date to be used for computing them, default provisions or what will happen if one party doesn’t live up to the agreement, who pays for property inspections and any deficiencies that they may uncover, financing arrangements and the occupancy date.

Related Information
  • Personal vs. Real Property: Can I Take The Chandelier?

 

3. How long does a title search take?

A title company examiner searches the records of the county recorder, county assessor, and other government taxing agencies to locate any documents which might affect the title to a given property. Depending on the number of documents the examiner must review, a title search will take anywhere from one hour to two weeks to complete. Read this search carefully and look for any hidden problems.

Please explain the value of title insurance.

Title insurance guarantees that the seller has legal and “marketable” title to the property which he is selling. A title search is performed by the title company or attorney handling the closing. This search will reveal, among other things, any liens or claims against the property and ascertain that the seller had good and clear title to the property. Title insurance will be issued for both the buyer and for the lender, if there is one. The lender’s policy will protect the lender for any defects in the title up to the amount of their loan. The buyer’s or owner’s policy will protect the new buyer against any flaws in the title. The policy will be good as long as you own the property. It covers events or circumstances that happened in the past, before you took title to the property.

Related Information
  • What its the difference between a title theory vs. a lien theory?
  • What is an attorney’s opinion of title?
  • Who determines title insurance rates?
  • Exceptions to coverage
  • Coverage and types of title insurance
  • Clouds on title
  • What title insurance will do for you?

4. What are the most common ways to hold title?

  • Joint Tenancy: The main distinguishing characteristic of joint tenancy is the right of survivorship. If one of the joint tenants dies, his interest passes automatically to the surviving party or parties instead of being tied up in lengthy probate proceedings. When two or more people own a property as joint tenants, they own an undivided equal interest in the property.
  • Tenancy-in-Common: This is so standard a form of ownership for unrelated buyers that it is generally presumed to be the way they hold title if nothing else appears to the contrary. The shares are presumed to be equal unless stated otherwise on the deed, and each of the tenants has equal rights of possession. There is no right of survivorship; each tenant-in-common should note in his will the person or persons to whom his share will pass.
  • Community Property: This type of ownership is available to married couples in nine states – Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Both husband and wife have an equal right to possess the property during their marriage, and in some states, upon the death of either spouse, the survivor automatically receives half of the community property and the other half passes to the lawful heirs.
  • Sole and Separate Property: Holding title this way means that no one else has any interest in it. If you are married and wish to take title this way, you should record a quitclaim deed from your spouse to yourself so that no community interest could be claimed at a later date (in community property states).

May I change the way I hold title after escrow closes?

Yes, at any time. You may effect the change yourself, through a written agreement, or have your escrow officer help you do it.

Related Information
  • Community Property States
  • Ending A Co-Ownership With A Quitclaim Deed
  • Unmarried Joint Tenants?

5. How should I go about shopping for a loan?

Consider banks, savings and loan offices and loan brokers: Find out what types of loans are available and ask about interest rates and loan fees. Find out how quickly the lender can make an appraisal of the property. Prepare a form that makes a side-by-side comparison of the terms being offered to you by the various lenders, and think carefully about which loan would be the best for your circumstances.

What information will I need to give the lender when I make an application for a loan?

When you visit your lender, you will be asked to fill out a Uniform Residential Loan Application form. This is a four page document that asks you about your employment, your assets, your liabilities, and your income. It is important to be as truthful and complete as possible on this loan application form. All the information will be verified. Your employer will be called and your bank accounts will be checked. Upon receipt of your completed application, the lender will give you a copy of a government publication called “Settlement Costs: A HUD Guide”. This small pamphlet will explain the closing process and describe the various closings costs which you may incur with your loan. The lender is allowed three business days after receiving your loan application to provide you with this brochure.

What are the other documents that my lender is required to give me when I apply for a loan?

The lender is required to provide you with a “Truth In Lending ” statement which will tell you the APR, or Annual Percentage rate of the loan for which you are applying. The APR will be the percentage rate quoted to you by the lender, PLUS other closings costs, such as any points and other finance charges over the term of the loan. This form must also be given to you within three business days of your loan application. You will also receive a disclosure about Adjustable Rate Mortgages, a Good Faith Estimate of itemized closing costs, various authorization forms giving the lender permission to research your credit, contact your employer, request rental or part mortgage history, and verify all your bank deposits.

Once I have completed my loan application, what else should I take in with me to speed up the loan process?

Together with your loan application, you should take in your last two years tax returns, the last 2 or 3 month’s bank statements, current W-2 forms, any trust agreement or securities account information, and letters of explanation of any credit problems you may have had. The more information you provide the lender at the time of your application, the faster your loan will get processed.

Related Information
  • Escrow Impound Accounts

6. Can I still get a loan with bad credit?

You may qualify for a loan despite past credit problems. In most cases, you can qualify for a loan with late payment histories on your credit report. You can even qualify for a loan with a bankruptcy or foreclosure on your credit history.

What rights do I have to delete incorrect information on my credit report?

Under the Federal Fair Credit Reporting Act (FCRA) you have the right to be told if information in your file has been used against you. You have the right to dispute inaccurate information and request that it be corrected or deleted. Incorrect information must be corrected within 30 days of your request.

How do I contact the various credit bureaus to report incorrect information?

The three main credit reporting agencies are Experian, P.O. Box 2106, Dallas, TX 75002-9506, (888) 397-9506, Equifax, P.O. Box 740241, Atlanta, GA 30374, (800) 685-1111, and Transunion, P.O. Box 1000,Chester, PA 19022, (800) 916-8800. Please refer to page 74 of your copy of The Complete Guide to Your Real Estate Closing for a detailed explanation on how to contest incorrect information found in your credit report.

Related Information
  • E Loans
  • Why is my FICO score so important?

7. How much will the closing costs be and what are they?

Generally, your closing costs will come out to between 4 and 5 percent of your purchase price. The closing costs will include title searches and title insurance, government taxes, notary fees, loan fees, escrow fees, recording fees, reconveyance fees, prorations and sales commissions.

How will I know how much my closing or settlement fees will be before the actual closing date?

When you applied for your loan, if you have one, you would have been given the Loan Estimate form no later than three business days after your loan application was received. This statement will have provided you with an “estimate” of what you closing costs will be.

Three business days before the actual closing, you will then be given the Closing Disclosure statement. This is the final accounting of the settlement fees you will incur at closing. It will list various fees, depending on your individual transaction, such as: the sales commission, the loan origination fee, the loan points, the appraisal fee, the credit report fee, the assumption fee, any prepaid interest, the mortgage insurance premium, the first year’s homeowner’s insurance premium, the mortgage insurance escrow account, if any, the recording fee, the transfer tax, the property survey fee, the termite report fee, any homeowner’s association fees, and any other fees specific to your particular purchase. If you do not have a loan, the closing agent will give you a settlement or closing statement to review prior to closing.

Must I check all the closing fees on the Closing Disclosure form or will the closing agent already have done that for me?

Carefully review all the fees listed on the Closing Disclosure statement before closing takes place. Check the math. Check that all the fees are what you had agreed to pay. Question any fees that you do not understand or think that may have been added without your permission. Lenders often add Courier Fees, Processing Fees, and other fees that they may not have disclosed to you at the time of your loan application.

Since my settlement or closing fees are a substantial amount of money, can I deduct them on my income tax return?

The items given to you on your Closing Disclosure statement fall into three categories relative to your income taxes: tax-deductible in the current year, capitalized (added to the price paid for the property and thereby becoming part of your base for capital gains tax purposes when you sell) or neither (personal expense). The tax-deductible items are interest, points, loan-orgination fees, any prepayment penalty, and property taxes. Those items which are capitalized are the termite clearance costs, title insurance premiums, attorney’s fees, appraisal fees, recording fees, notary fees, escrow fees, transfer taxes, and the ALTA inspection fee. The personal expense items are the first insurance premium, private mortgage insurance, and any money put into an impound account.

Reminder: In most instances, property taxes paid on your home are a deductible item on your personal income tax return. Please refer to your copy of The Complete Guide to Your Real Estate Closing for further clarification.

Related Information
  • Should I Compare Escrow Fees On-Line?

8. What happens on the day of closing and can I move in on that day?

The actual day of your closing will be the day in which the buyer deposits any remaining money due into escrow and signs his escrow and loan documents and it is the day in which the seller will sign the deed and closing statements and receive a check for the money due to him. In some parts of the country, the buyer and seller go into the closing agent’s office separately. In other parts of the country, the buyer and seller go in together. Either way, closing is the day in which the deed is exchanged for the sales proceeds money. “Recording” will take place on that day, which means that the deed and any mortgage documents are taken to the county court house and recorded in the official records. These documents are them made of “public record” for anyone to see. The actual day that you can move in will be determined by local practice and the terms of your purchase agreement. It may be the day of closing, or it may be a day or two after the closing.

Why must I bring identification with me to the closing?

You will be required to sign certain documents which must be acknowledged before a Notary Public before the closing can be finalized. A notary can only accept an official identification, such as a driver’s license, passport, or other form of authoritative ID.

I have heard that closing can take hours. How long does the closing usually take?

The actual closing can take anywhere from one hour to several hours, depending on the situation. If both buyer and seller are in full agreement of all the terms of the sale, and the buyer and seller both understand all the documents they will be signing, the closing should go quite quickly. The closing agent will present the buyer with any loan documents to sign, notarize all the required signatures, and give the seller the deed and any closing documents for him to sign. If an explanation of each document is required, then the closing will take longer. This is the most important last step of your property purchase, so do not be rushed at the closing. Ask questions about any documents which you sign that you may be unsure of their content. All the documents you sign at the closing will become legally enforceable contracts and documents and bind you to certain obligations.

Is there anything I should do before I go to the closing?

Prior to your actual closing day, there are several things you should have done to prepare for the closing: You should have reviewed the letter of commitment from your lender and read and understood all the terms of the loan they are proposing to give you. You need to be sure that all inspections have been done on the property, and that you have inspected to see that any work (such as termite repair, roof repair, plumbing repair or the like) has been done. You should have read the title search report and reviewed the survey, or plot plan of the property. The survey will confirm the property’s boundaries are exactly as described in your purchase agreement. You should have obtained a homeowner’s insurance policy and provided this information to the closing agent. You should have performed a final walk-through inspection to examine the property within the last 24 hours before closing. You will want to make certain that everything is in the condition that it was in when you made your offer to purchase. You should have your certified or cashier’s check payable to the closing agent to cover the closing costs and the balance of funds due. If you are well prepared for your closing, everything should go smoothly and quickly.

Do all closings occur at a formal closing meeting?

Depending on your area of the country, the closing may be a formal meeting at an attorney’s office, escrow or title company, with all parties attending or it may be an informal signing of papers at an escrow or title company. In some areas, escrow agents process all the paperwork and arrange for all the documents to be signed, often by the buyer and the seller separately. The escrow agent then disburses the required funds to the seller.

Will I receive more documents to take home with me from the closing?

After the closing has taken place, you will be given copies of various documents. Some of these documents will be the HUD-1 Settlement Statement, which the buyer and seller will be asked to sign, the Truth In Lending Statement, the Promissory Note to the lender, binding you to pay a certain amount according to the terms of the loan, including the dates on which your loan payments are due and the location where they must be sent, a copy of the mortgage or deed of trust, which is the document which secures the note and gives the lender the legal right to make a claim against the property in case you were to default on the terms of the note.

I still do not understand why I have to sign a mortgage or deed of trust on the property if I have already signed a promissory note?

The promissory note is your promise to pay the lender a certain amount of money over a specific period of time, but the mortgage or deed of trust gives the lender an actual “ownership interest” in the property. Until the loan has been paid in full, the lender will retain this ownership interest in the property for his protection. The mortgage document restates the basic information found in the note and spells out your responsibilities to pay principal and interest, taxes, insurance on time, and to maintain insurance on the property and to properly maintain the property and not allow it to fall in disrepair. Please refer to your copy of The Complete Guide to Your Real Estate Closing for further explanation.

Are there any tax tips and after closing advice that you can give me.

Remember that several of your closing costs may be taken as deductions on your tax return. These include any prepaid mortgage interest, property taxes, points, and other fees. Remember that under the new federal tax rule, a single taxpayer is allowed up to $250,000 ($500,000 for married couples) of gain if the property has been owned for at least two of the last five years and had been the owner’s primary residence. Please refer to page 191 of All About Escrow and Real Estate Closings for additional questions which might be of concern to the buyer and seller after the close of escrow.

Related Information
  • Final Walk Thru
  • How do I prepare for closing?
  • When can we move in?
  • Closing escrow when you are out of town
  • Why the right closing date can make a difference

9. When do I receive a copy of the deed to the property?

The deed will be mailed to the buyer from the recorder’s office after it has been documented (recorded) in the county official records.

Related Information
  • Must I record my deed?

10. I have a complaint against my escrow company. Who regulates escrow companies in California?

An escrow company in California is subject to the provisions of the Financial Code and the California Code of Regulations under the Business, Transportation and Housing Agency in the Department of Corporations. Address your complaint to the Department of Corporations at 3700 Wilshire Blvd. #600, Los Angeles, CA 90010 or telephone them at (213) 736-2751.

How do I start an escrow company in California?

Any person who desires to engage in business as an escrow agent in California must be a corporation organized for that purpose. In addition, there are several criteria which must be met:

  1. you must have a $50,000 tangible net worth and $25,000 in liquid assets,
  2. you must obtain a surety bond of at least $25,000
  3. the manager of the company must have at least 5 years experience of responsible escrow experience,
  4. you must be a member of Escrow Agents Fidelity corporation and pay them an initial member ship fee of $3,000,
  5. all officers, directors, stockholders, managers, and employees will be required to file fingerprints with the initial application, and
  6. you must pay a filing fee of $625 and an investigation fee of $100.

Real estate brokers, banks, savings and loan institutions, attorneys and title insurance companies are exempt from licensure.

Persons licensed by the Department of Corporations as an escrow agent are subject to the provisions of the Escrow Law (Division 6 of the California Financial Code (FC) and the Escrow Regulations (Title 10, Chapter 3, Subchapter 9 of the California Code of Regulations (CCR). Copies of the California Financial Code may be purchased from Barclays Law Publishers, 400 Oyster Point Blvd., South San Francisco, CA 94080.

How can I find out who regulates escrow in my state?

The Complete Guide to Your Real Estate Closing includes a state-by-state guide to escrow procedures. Order a copy online.

Related Article: How Closings are Handled since COVID-19

Posted in Learn

Title Insurance Glossary

Sandy Gadow

Also see the Loan Glossary

A

Abstract of Title
A summary of the public records affecting the title to a particular piece of land. An attorney or title insurance company officer creates the abstract of title by examining all recorded instruments (documents) relating to a specific piece of property, such as easements, liens, mortgages, etc.
Abut
to touch or border upon. For example, a piece of land bordering on a street or an adjoining property is said to abut such street or property.
Accretion
a natural increase of land along the shores of a body of water.
Acknowledgment
a formal declaration before a notary public or qualified officer that the person signing a document is doing so voluntarily and using his or her legal name and signature; popularly called notarizing.
Actual notice
Information that can be observed, heard, or otherwise sensed.
Administer
to pay the debts and finalize up the business of a deceased person’s estate.
Adverse Possession
acquisition of title to real property through continued occupation over a period of time (usually five years); title acquired in this way is not considered marketable until established by court proceedings against the owner of record.
Affidavit
a written statement or declaration that is sworn to or affirmed before somebody who has the authority to administer an oath or affirmation.
Agreement
a legally binding contract made between two or more persons.
Allodial Tenure
the absolute ownership of real estate which is subject to inheritance by the owner’s heirs or to disposition by the owner as he sees fit, as contrasted with the feudal system of ownership. Allodial tenure is characteristic of ownership in the United States.
Alluvion
the increasing of land, especially along river banks, caused by the natural deposits and build-up of sediment. Such sediment is called alluvian.
Appurtenance
anything incidental or belonging to land that might be considered part of the property, such as an improvement or an easement for ingress and egress.
Appurtenant
belonging to.
Arbitraries
“ARBS” a word used in the title industry which refers to simplified forms of land descriptions arbitrarily used in indexing in title plants in lieu of the more involved and complex descriptions contained in deeds, mortgages and other real estate instruments.
Assessed valuation
value placed on property by the count assessor; used as a basis for computing property taxes.
Assessment bond
an obligation to pay for costs of local improvements such as sidewalks, sewers, or street lighting.
Assignee
the person who receives ownership of a contract by transfer by another
Assignment
a transfer in writing of one’s interest in something, as to assign an interest in a promissory note and deed of trust.
Attach
the act of a sheriff or other court officer in taking possession of a person or property under the authority and direction of a write or order issued by a court.
Attorney in fact
one who holds a power of attorney from another allowing him or her to execute a legal document, such as a deed, mortgage, on behalf of the grantor.
Attorney’s Opinion
the written statement of an attorney setting forth what he believe to be the condition of a real estate title.
ALTA
American Land Title Association
ALTA Title Insurance Policy
American Land Title Association combination of various policies and endorsements that lenders usually require when making a loan; expands normal coverage to include unrecorded mechanic’s liens, unrecorded physical easements, facts not revealed by a physical survey, water and mineral rights, and the right of parties in possession such as buyers who have recorded claims and tenants.
Avulsion
a change or shift in a water boundary resulting in loss of land by an owner and the acquiring of such land by another.
Aztec Recognition Agreement
An agreement a bank draws up to give its lien first priority over the co-op’s lien in case the shareholder defaults. Also, the co-op corporation promises to notify the lender if the owner fails to pay maintenance or other fees to the co-op.

B

Back Title Letter
Also called “Back Title Certificate” in some areas, and “Starter” in others. When title have been previously examined up to a certain date by reliable examiners, title companies sometimes give subsequent examiners of such titles a letter which sets forth the condition of the title at the time of the previous examination and authorizes them to begin their subsequent examination with the terminal date of the previous examination.
Bargain and Sale Deed
also called “Fee Simple Deed.” A deed of conveyance which presumes that the grantor holds title, but which makes no warranty with respect to the title.
Beneficiary
a person who is eligible to receive funds or property under the terms and provisions of a will or trust or insurance policy.
Bill of Sale
the instrument by which title to personal property (not real property) is transferred.
Binder
written confirmation of insurance coverage provided by an insurer prior to issuance of the actual policy.
Bond
a written promise to pay to the bearer or owner a stated sum of money at a specified time, with interest usually represented by interest coupons attached to the bond. Also a written commitment assuring the payment of a stipulated sum of money. A certificate of debt issued by a government or corporation guaranteeing payment to bearer of a specified sum of money, plus interest, on a specified future date.
Book and page
the location of a recorded document in an office of records referenced by separate book number and page number, and within that book, documents are listed chronologically and alphanumerically. Frequently replaced by document number or official records.
Bundle of Rights
a framework designed to help understand the concept of liens, encumbrances, and rights in title to real estate, and how they are separate but interrelated.

C

Certificate of Title
Written opinion by an attorney that ownership of a particular property is as stated in his or her certificate.
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.
Chattel
personal property.
Claim
a right to assert a demand for payment of money due; or the surrender or delivery of possession of property or the recognition of some right.
Clear Title
title that is free of liens or legal questions as to ownership of the property
Closer
an attorney or other person responsible for orchestrating a closing, often including drafting legal documents, receipting and explaining documents, handling funds, and meting terms of the purchase agreement, lender requirements, and Title Company.
Closing
In some areas called “settlement” or “escrow.” Process of completing a real estate transaction during which deeds, mortgages, leases and other required instruments are signed and/or delivered, an accounting between the parties is made, the money is disbursed, the papers are recorded, and all other details such as payment of outstanding liens and transfer of hazard insurance policies are attended to.
Cloud on Title
An irregularity, possible claim, or encumbrance, which, if valid, would adversely affect or impair the title.
Commitment of title
similar to preliminary title report; guarantees that a title company will issue title insurance.
Common Areas
all the areas in a condominium or planned unit development that are not specifically reserved for the individual owners; includes walkways, parking lots, and yards.
Competent
legally qualified.
Concurrent escrow
occurring simultaneously, at the same time; real estate exchanges often must be recorded concurrently.
Condemnation
the taking of private property for public use.
Conditions
specifications detailed in a deed; they may cover such things as setbacks, types of dwellings, etc.
Confirmation of sale
court approval of the sale of property by an executor, administrator, guardian, or conservator Contiguous- being in actual contact; adjoining or touching.
Constructive notice
notice given to the general public by the county records.
Co-op
A unit in a large building operating as a cooperative corporation.  Individual units are leased exclusively to purchasers. Buyers are issued shares in the corporation rather than receiving a deed to the property.  Special restrictions limit the terms of purchase and use of the unit.
Co tenancy
ownership shared by more than one person; tenancy in common and joint tenancy are both co tenancy arrangements.
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.
Conveyance
the transfer of title to property from one person to another.
County Assessor
one who sets value of property for taxation purposes.
County Records
a system for recording documents in permanent books or records at the county court house; maintained by each county and provided by law. Open to public examination.
Covenant
a formal agreement or contract between two parties in which one party gives the other certain promises and assurances, such as covenants of warranty in a warranty deed.
Covenants, Conditions, and Restrictions
often associated with condominium documents. Limitations sometimes put on the use and enjoyment of real property. This is done by agreements contained in deeds and other documents.
Curtesy
a right which a husband has in his wife’s property at her death. It does not prevail in all states.
Cut Out
the term applied when a parcel or a portion of the property is taken or “cut-out” from a larger parcel on an arbitrary map.

D

Decree of Distribution
The final declaration of the rights of heirs to receive the property of an estate.
Dedication
the setting aside of certain land by the owner and declaring it to be for some public use, accompanied by the acceptance of such use by the public. For example: streets, sidewalks, or parks.
Deed
a written document that transfers title to property; there are several different types; a grant deed, the most common, is simply used to convey property; a gift deed is used to make a gift of property; a quitclaim deed is used to transfer an interest owned in a property and contains no warranties; a tax deed is used to convey title held by the state, and a deed of reconveyance is used to convey legal title back to the borrower from the trustee.
Deed of Reconveyance
a legal instrument that conveys title from a trustee back to the borrower under a mortgage once the mortgage has been paid off.
Deed of Trust
security for a property loan; deed the property to a third party (trustee0 to hold until the loan is paid.
Deed Restriction
a restriction contained in a deed which limits the use or occupancy of the real estate or the type, size, purpose and location of improvements to be constructed on it.
Deemer period- refers to the way a state regulates rate filing by title companies, in other words, how approval is obtained for rate filings by the regulatory authorities.
Default
failure to make good on a promise, such as failure to make payments on a note or to live up to the terms of a contract.
Defect
a blemish, imperfection or deficiency. A defective title is one that is irregular and faulty.
Deficiency Judgment
a personal judgment in a foreclosure action for whatever amount remains owing after the foreclosure sale of an encumbered property.
Description
a reference to certain maps, plats, and other instruments that are recorded with the county and serve to make positive property identification.
Devise
to give property by will; a devisee is the beneficiary to whom the property is willed and the devisor (more commonly called the testator) is the deceased person through whom the property is devised. A gift of real estate by a will.
Dispossess
to deprive one of the possession and use of real estate.
Divest
to deprive of a right or title.
Documentary Stamps
tax applicable to property transfers and affixed to the grant deed; varies from county to county, city to city; sometimes called a transfer tax

.Dominant Estatethe property for the benefit of which a right-of-way easement exists across another’s adjoining piece of land is said to be the dominant estate. The land across which the easement runs is said to be the servient estate.Dowera right which a wife has in her husband’s property effective at the time of his death.

E

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.
Easement Appurtenant
created for the benefit of a parcel of land; belong with the land.
Easement in Gross
an easement that is not appurtenant to any one parcel; for example, public utility easement.
Egress
A means for departing from one’s own property without trespassing on another person’s property, as applied to an easement.
Eminent Domain
the government’s right to acquire private property for public, or quasipublic use through condemnation; requires full compensation.
Encroachment
extension of an improvement onto the lane of another.
Endorsement
addition to or modification of a title insurance policy, which expands or changes the coverage of the policy, fulfilling specific requirements of the insured
Equitable Rights
rights established primarily by court decisions based upon principles of fairness, honesty, justness and morality, and not upon enacted law or common law.
Equitable Title
title of the purchaser under a contract of sale or the right to acquire the legal title.
Erosion
the wearing away of land surfaces by forces of nature such as wind and water.
Escheat
The government’s right to take property when someone dies with no will and no heirs.
Estate
the degree, quantity, nature and extent of a person’s interest in a property.
Estate by Entireties
an estate or interest in real estate predicated upon the legal fiction that a husband and wife are one person. A conveyance or devise to them vest title in them as one person. Upon the death of either husband or wife, full title passes to the survivor.
Estoppel
a legal restraint which stops or prevents a person from contradicting or reneging on his previous position or previous assertions or commitments.
Et Al
and others.
Et UX
abbreviations of Latin “et uxor” meaning “and wife.”
Et Vir
a Latin term meaning “and husband.”
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.
Examiner
the title examiner.
Exception
a conditional item listed on a preliminary title report and affecting the title; would be excluded from coverage by a title insurance policy.
Exclusion
also known as an exception. The deduction or subtraction from inclusion.
Execute
to give validity by signing documents so that an intention may be completed.
Executor
a person named in a will to carry out its provisions.

F

Fee Simple
the greatest interest one may hold in real property; usually means ordinary ownership of real estate and is sometimes called fee title.
Fiduciary
someone entrusted with financial responsibility in someone else’s behalf.
Filing
relates to the delivery of real estate instruments to a recorder for recordings.
File and Use
title insurers in most states file rate schedules, policy forms, and endorsement forms with the state insurance department; they may then use those rates and forms after a specified waiting interval; rates so filed are mandatory.
First Mortgage
a mortgage having priority as a lien over any other mortgage or lien on the same property.
Fixture
personal property which is permanently attached to real estate such as plumbing fixtures.
Foreclosure
a legal process that deprives a mortgagor of his or her interest in a property because he or she has failed to comply with the terms of the mortgage.
Forfeiture of title
common penalty for the violation of conditions or restrictions imposed by the seller upon the buyer in a deed or other proper document.
Forgery
the fraudulent signing of another’s name to an instrument such as a deed or mortgage or check.
Freehold
a life estate or a fee simple estate.
Front Foot
a unit of measurement, one foot in length, along the front boundary line of a piece of property which measurement, when assigned a dollar value, is a factor in determining the total value or sale price of the tract.

G

General Plan Restrictions
restrictions on the use of property imposed for the benefit of more than one parcel of property, usually a tract containing many lots.
General Index
an index (kept in the plant) of all matters affecting persons or corporations and their rights to do business and all matters of a general nature which cannot be entered on the Lot Books because no specific property is mentioned.
General Lien
A lien filed against the name of an individual, corporation, that attaches to all properties owned by the individual, both real and personal.
General Warranty
a warranty provision in a deed or mortgage or other real estate instrument containing all of the common law items of warranty.
Gift Deed
a deed granted out “of love and affection” rather than any material consideration.
Grant
to convey title of property by means of a deed; a grantor conveys a property to a grantee.
Grantee
one to whom a grant is made.
Grantor
a person who transfers by a written instrument, an interest in land.
Guaranty
an agreement in which a guarantee or assurance of a set of facts or the performance of an objective or obligation is given.
Guardian
a person who is legally responsible for the care and management of the person or property of one who is legally incompetent to manage his own affairs.

H

Habendum clause
the provision in a deed which begins with the words “to have and to hold” and which, in effect, defines the quality of the estate or interest which is being conveyed to the grantee.
Heir
a person who inherits or who is entitled to inherit real estate by provisions of law or under the provisions of a will.
Hereditaments
any kind of estate, interest, or rights in real estate which can be inherited.
Hiatus
a separation, gap or unaccounted for area. For example, usually a strip of land between two tracts where the two tracts do not adjoin because of faulty descriptions.
Homeowner’s endorsement
an addition to a policy of title insurance that extends the normal policy to cover items other than those stated in the standard policy; may include such items as mineral rights and mechanic’s liens.
Homestead
property designated by the head of a family as his home, which is protected by law from forced sale to pay debts. Land claimed by a settler under the National Homestead Act.
Hypothecate
to give a thing as security without giving up possession.

I

Implied
presumed or inferred, rather than expressed.
Improvement Liens
liens imposed by municipalities on real estate which has been directly benefited by municipal improvements such as the construction of streets, sidewalks and sewer lines. Such liens secure payment of the proportionate costs of such improvements.
Inchoate
immature or not fully developed. Incomplete. An inchoate right of dower held by a wife matures and becomes exercisable only upon the death of her husband.
Indemnify
To agree to make payments for a loss.
Indemnity
insurance against possible loss or damage. A policy of title insurance is a contract of indemnity.
Indenture
a deed or other real estate contract executed between two or more parties.
Index
an alphabetical listing in the public records of names of parties to recorded real estate instruments together with the book and page number of the record. The listing in abstract and title plants of recorded real estate instruments in groups according to land descriptions, known as a geographic index. The alphabetical listing in abstract and title plants, by names of the parties, of all recorded instruments which affect but do not describe particular real estate, such as judgments, powers of attorney, will and probate proceedings. Such indexes are known by various names such as General Index, Judgment Index, and Name Index.
Inflation endorsement
coverage that may be added to the standard owner’s policy of title insurance; it adjust the amount of coverage according to the cost-of-living index.
Ingress
a means for entering one’s own property without trespassing on another person’s property, as applied to an easement.
In gross
an easement created for the benefit of an individual apart from the ownership of the land; a public utility easement is one example.  It is not assignable or inheritable.
Instrument
a written legal document such as a contract, a promissory note, a deed, or a grant.
Insurable Title
a property title that a title insurance company is willing to insure.
Insured closing letter
A letter issued by a title underwriter to a lender or buyer accepting responsibility for certain closing (nontitle) issues.
Intermediate theory state
a state in which the security for the mortgage is based on the title theory or deed of trust, but that requires the lender to foreclose to obtain legal title.
Inter vivos trust
a living trust; inter vivos is a Latin expression meaning “among the living.”
Interval ownership
same as time share ownership, or partial ownership.
Intestate
someone who has died with no will; the estate reverts to the next of kin.

J

Joint Protection Policy
a title insurance policy insuring the interest of both owner and lender.
Joint Tenancy
one way for several persons to hold title; joint tenants own an undivided equal interest and have equal rights to use the entire property; they are said to have the right of survivorship, that is, they inherit the property automatically upon the death of the other joint tenant; this right if the principal distinction between a joint tenancy and a tenancy in common.
Judgment
a court’s final decree, generally resulting in a lien; may encumber the sale of a property and must be satisfied before it can be sold.
Judicial
of or pertaining to courts of law or the administration of justice
Judicial foreclosure
type of foreclosure that requires court proceedings; mortgage foreclosure requires court proceedings while deed-of-trust foreclosures generally do not; state laws dictate.
Junior Lien
Any lien or mortgage that has less priority than another. May be a judgment or a second or third mortgage filed after another lien.
Jurat
certificate of an officer, such as a notary public or magistrate, who has witnessed someone’s signature to a sworn document; also, that part of an affidavit stating by whom, where, when, and before whom it was sworn.
Jurisdiction
the right and power of courts to interpret and apply the law. Also, the legal power of control over persons and property.

L

Leasehold estate
an estate created by a lease for a certain period of time; in contrast to a fee simple estate, it is a lesser interest.
Legal description
a description of land recognized by law and based on government surveys, spelling out the exact boundaries of the entire piece of land; should so thoroughly identify a parcel that it cannot be confused with any other.
Lien
A legal claim upon property for the payment of a debt; a money encumbrance; such as, a mortgage lien, a judgment lien, or a mechanic’s lien.
Lien theory states
states in which the mortgagor (borrower) retains legal title to the property; lender (mortgagee) has a lien on the property as security for the debt.
Lien waiver
A document provided by a contractor, subcontractor, or materialman, showing that they have been paid for their work and are waiving rights to file a lien.
Life Estate
use of property only during a person’s lifetime; this interest may be sold, encumbered, or leased, but only for the term of the life estate.
Lis Pendens
legal notice that litigation is pending on a certain property and that anyone obtaining an interest in the property after the notice date may be bound by the judgment.
Littoral rights
rights to shoreline property on a large body of water, such as an ocean or lake.
Loss
as referred to in the title industry, damage suffered by a person resulting from defects or liens upon his title to real estate. Also could be money paid by a title insurance company in settlement of policy claims.
Lot book report
a short title company report providing the property owner’s name, the vesting, the property’s legal desrip5ion, and a plat map.

M

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.
Market Value
an average between the highest price which a buyer, willing, but not compelled to buy, would pay and the lowest price a seller, willing, but not compelled to sell, would accept.
Mechanic’s Lien
a lien that s subcontractor, laborer, or supplier of materials may put on a property after furnishing labor or materials to improve the property without being paid.
Meeting of Minds
the state that exists when all parties to a contract agree to the exact terms thereof.
Metes and bounds
A description of land by measures and distances. It must have a known point of beginning, define the perimeter of a parcel, and return to the point of beginning to be legally acceptable.
Mineral Rights
ownership of minerals found on a property.
Minor
a person under 18 years of age.
Mortgagee Policy
a policy of title insurance insuring the hold of a mortgage against loss caused by the impairment or invalidly of the lien of such mortgage or because of defects in, superior liens upon, or unmarketability of the title.
Mortgage insurance
insurance required to be paid for by the borrower to protect the lender in the event payment s are not made on time; most often required when the loan amount exceeds 80% of the purchase price.
Muniments of Title
deeds and other original documents showing a chain of title.
Mutual Consent
approval of both parties to terms of a contract.

N

Negligence
the omission of or failure to use reasonable precaution, care or action
Negotiable
capable of being assigned or transferred by endorsement’ checks, drafts, and notes are all negotiable.
Non-recurring closing costs
fees and costs that are paid only once, usually at closing, such as title insurance or points.
Notary Public
person who acknowledges oaths, such as the signing of a grant deed or deed of trust; must be duly appointed by the property authorities.
Notice of completion
document recorded to give constructive notice that a building job has been completed
Notice of Default
a formal recorded declaration that a default has occurred; starts foreclosure proceedings.
Notice of Nonresponsibility
notice recorded by an Owner of real property that he will not be responsible for payment of mechanics’ liens for work contracted by another.

O

Official Records
a master set of books kept by the county recorder in which copies of all recorded documents in that county are stored; may be microfilmed.
Offset statement
a statement by an owner or a lien holder concerning the liens against a property
Opinion of title
an attorney’s written evaluation of the condition of title to real property, based upon a careful examination of the abstract of title.
Owner’s Policy
a policy of title insurance usually insuring an owner of real estate against loss occasioned by defects in, liens against, or unmarketablility of the owner’s title.

P

Parcel
land fitting in a single description
Parcel Map
A map of a given area, designed, drawn, and labeled for the purposed of identifying parcels and distinguishing them from one another in a given area. May be called a subdivision map or a plat map
Partial reconveyance
the release of part of someone’s interest in real property secured by a mortgage or deed of trust
Partition
a lawsuit between joint owners of real estate in which the court either divides the property between them or orders the property sold and divides the proceeds between them
Party wall
a wall built long the boundary line of adjoining properties and shared by the respective property owners or tenants
Perimeter
the boundary lines enclosing a tract or land. Also the length of the boundary lines enclosing a tract of land.
Personal property
which is not real property; curtains, furniture, appliances, and other items not attached permanently to the property.
Personalty
personal property
Plat Book
one in a set of books in the public records in which maps, plats, and copies of surveys are recorded.
Plat map
map of a land subdivision or housing development
Possession date
day when the buyer actually moves into the property; may be different from the close of escrow or recording date.
Power of Attorney
the authority given one person by another to act on his or her behalf.
Preliminary Certificate
same as a Binder Certificate
Preliminary Report
a report showing the current status of a property and the condition under which a title company is willing to insure title as of a specified date
Prescription
doctrine by which easements are acquired through long, continuous, and exclusive use of possession of property
Priority
taking place in rank or order; taking precedence over; in real estate transaction, priority is established by the order in which documents affecting a property are recorded and also by the language contained in those documents.
Public Records
the transcriptions in a recorder’s office of instruments which have been recorded, including the indexes pertaining to them
Public Trustee
a public official to whom title to real setae may be conveyed by trust deed to be held by him as security for repayment of a loan.
Purchase Money Mortgage
a mortgage given by a purchaser to a seller on the subject property to secure payment of part of the purchase price.

Q

Quasi
to some degree, almost, partially, somewhat.
Quiet Enjoyment
One of the common law warranties. Also, assurance that one’s title, possession, or use of real estate will not be disturbed or disrupted by a legitimate cause or adverse right.
Quiet Title Suit
a lawsuit brought by an owner of real estate for the purpose of canceling, wiping out, putting a quietus upon supposedly immaterial, inconsequential, and unenforceable claims and interest which cloud his title
Quietus
final disposition, settlement, or elimination of a claim of debt.
Quit Claim Deed
a deed in which the grantor releases any claim he or she may have on a property; most commonly used between spouses and in partnerships; it contains no warranties.

R

Real Property
Term used to describe land and that which is permanently attached to the land; includes surface, subsurface and air rights.
Reconveyance
transfer of title from the trustee back to the real owner of property; occurs when a loan has been paid in full; releases the trustor (borrower) from any further liabilities for that debt
Recordation
process of placing a document on file with the county recorder for everyone to see; said to give constructive notice of the document’s existence; claims against property usually are given a priority on the basis of the time and date when they are recorded.
Recurring closing costs
costs and fees that will be paid monthly or annually, such as fire insurance, interest, property taxes and mortgage insurance.
Redemption
reclaiming real property from someone who has taken legal title to it.
Redemption period
period of time in which borrower may redeem his or her property.
Release Clause
a stipulation allowing for the release of a specific piece of property from a blanket lien that covers it and other property in exchange for a specific payment
Release of Dower
the deed or other instrument by which a wife releases her inchoate dower rights in land.
Release of Lien
the instrument by which a lien is released from the real estate which it encumbers.
Remainderman
person who holds a future interest that exists in favor of a party other than the grantor or his or her successors, as in a life estate relationship.
Reservation
a particular right withheld by a grantor when conveying property.
Restrictions
provisions in a deed or other instrument whereby an owner of land prohibits or restricts certain use, occupation, and improvement of the land.
Reversion
the return of an estate or interest to a grantor or lessor after the grant or lease has expired. Or, the interest retained by a fee simple owner of real estate after granting a terminable estate or interest in such property to another. For example, when a fee simple owner gives a lease to a tenant, the interest which the owner has left is known as the reversion. May also be a provision accompanying restrictive covenants in a deed, which provision stipulates that in the event the restrictions are violated, title to the property shall revert to the grantor.
Right of Survivorship
a right created by joint tenancy that states that, upon the death of one owner, the other immediately becomes the owner of the property.
Right of Way
the right to cross or pass over a parcel of land; may be a right to use a road or driveway, a right to construct power lines through the property, or a right to put pipes underground.
Right, Title, and interest
term used in deeds to denote that the grantor is conveying all claims to a property.
Riparian Owner
one who owns the upland bordering on a stream or other body of water.
Riparian Rights
the many rights of a person in, to, and over the banks, bed, shallows, shore and water of a stream or body of water upon which his land border.

S

Satisfaction
the payment of a debt or fulfillment of an obligation. May be an instrument executed by the holder of a lien, debt or obligation which acknowledges payment or fulfillment
Search
a careful exploration and perusal of the public records in an effort to find all recorded instruments relation to a particular chain of title.
Security
property pledged to ensure payment of a debt; collateral
Seisin
an old English term meaning legal possession or the right to legal possession of real estate under a freehold title.
Separate Property
property that is held singly by either a husband or wife, described on a deed as “sole and separate property.”
Servient Estate
incident to an easement, the property upon or across which an easement exists.
Servitude
a right or interest in a piece of real estate, which right or interest serves or benefits another unrelated property. For example, an easement across one piece of property which serves another piece of property is said to constitute a servitude regarding the property upon which it is located.
Setback
the minimum distance a building or other improvement must stand from property lines, in accordance with local zoning ordinances and deed restrictions.
Settlement
time at which property purchase is finalized, closing costs paid, deed exchanged and money disbursed; also called closing and close of escrow.
Settlor
one who creates an inter vivos or living trust
Specific Lien
A lien filed against a specific piece of real estate that does not impact other real estate or personal property of the lienee. For example, a mortgage or deed of trust, or a mechanic’s lien.
Specific performance
a legal doctrine that enables a court to compel someone to perform according to his or her agreement. Statement of Identity- form often required by title company from buyer and seller to ensure that items found in the title search apply to the individuals in question
Statue of limitations
law specifying time limits for initiating enforceable legal action.
Subjacent
a term applied to land or property lying contiguous to, but at a lower level than, another piece of property
Subject to
to take title without paying off the existing loan or deed of trust; original borrower remains ultimately responsible for repaying the loan; the buyer (new borrower) does not make a formal agreement with the lender.
Subordination agreement
a written agreement that changes the priority of documents, making for example, one deed of trust subordinate to another.
Subdivision
an area of land lay out and divided into lots, blocks and building sites, and in which public facilities are laid out, such as streets, alleys, parks, and easements for public utilities
Subrogation
the legal doctrine under which the law substitutes one creditor or claimant for another. When a title insurance company pays a claim under a title insurance policy, it is entitled to step into the shoes of the insured with respect to any rights the insured may have against parties who warranted the title to him.
Surety
a person who agrees to be responsible for a debt or obligation of another. Or, the pledge or agreement by which one undertakes responsibility for the debt or obligation of another.
Survey
the map or plat drawn by a surveyor which represents the property surveyed and shows the results of a survey. Shows the location, boundaries, area, or the elevations of land and structures upon the earth’s surface by means of courses in relation to the North Pole, and the measuring of angles and distances by using techniques of geometry and trigonometry.

T

Tacking On
beginning a subsequent title examination, in point of time, at the end of a previous title examination
Take Off
an abbreviated copy of the principal features of recorded instruments, required for the purposes of indexation in an abstract plant or for purposes of making abstracts or examining titles
Tax Deed
the instrument of conveyance when a government body sells a property to pay for arrears of taxes
Tax Deferred Exchange
a method of postponing capital gains when disposing of real property by trading one property for another of like kind
Tax Lien
the lien which is imposed upon real estate by operation of law which secures the payment of real estate taxes.
Tax Sale Number
a number assigned to a property when property taxes are not paid on time; identifies that property on the delinquent tax roll.
Tax Service
a reporting service that notified the lender in the event the borrower does not keep the property taxes current
Tenancy in Common
a form for taking title when two or more people buy property and own it together with either equal or unequal shares; if any one of the tenants in common dies, his or her interest passes to his or her heirs, not to the remaining tenants.
Tenant at Sufferance
one who continues to hold possession of real estate after his authorized term of occupancy has expired
Tenancy at will
a tenant who occupancy of real estate is subject to the will of the owner
Testate
having made a legally valid will and leaving it at death
Third Party
usually applied to persons who are not principal parties to a contract or other instrument, but who have some right, interest or duty which such contract or instrument affects. For example, where a sale contract between buyer and seller provides for the money and comments involved to be deposited with a title company pending the closing of the transaction, the title company becomes a third party in the deal.
Time-sharing
partial interest in a property allowing exclusive use for a specific time period.
Title
evidence of a person’s right to property
Title Agent
A representative of a title underwriter, one who “writes” the policies of the actual insurer or underwriter.
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 Covenants
covenants inserted in conveyances and in transfer of title to real estate for the purpose of giving protection to the purchaser against possible insufficiency of the title received.
Title Defect
any possible or patent claim or right outstanding in a chain of title which is adverse to the claim of ownership. Or, a material irregularity in the execution or effect of an instrument in the chain of title.
Title Insurance
A policy of indemnity issued by a title insurance underwriter or its agent that insures a buyer or lender against monetary loss or damage due to errors in the title as described in the policy and undeterminable facts that affect title such as fraud, forgery, unrecorded documents, unknown heirs, and many other factors.
Title Insurer
a company which insures the title to real estate
Title Plant
a geographically filed assemblage of title information which is to help in expediting title examinations, such as copies of previous attorneys’ opinions, abstracts, tax searches, and copies or take-offs of the public records.
Title search
a search and perusal of the public records for recorded instruments which affect the title to particular piece of land.
Title Searcher
one who searches titles
Title Underwriter
The title insurer who holds a statutory premium reserve and is responsible for claims on title under a title insurance policy.
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
Trust Deed
an instrument in the nature of a mortgage which secures the payment of a debt. Distinguished from a mortgage in that the title is transferred to, and held by, a trustee for the benefit of the holder of the debt.

U

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.
Underwriting
the analysis completed by a lender to determine the worthiness of a requested loan.
Undivided interest
unsegregated interest of a co-owner in a whole property owned in common.
UPC
identification number for a specific property; also called assessor’s tax parcel number, account number, or folio number.
Usury
charging an interest rate above the maximum allowed by state law.

V

Vendee
the purchaser under a sale contract of real estate.
Vendor
the seller, one who disposes of something.
Vest
to bestow or confer upon, as in the expression, “Title shall vest in …”
Vestee
current recorded owner
Vested Interest
an interest that if fixed or determined.
Vesting
the manner in which title to real property is held.
Voluntary Lien
Any lien placed on property with consent of, or as a result of, the voluntary act of the owner.

W

Waiver
the release of a right to require something to take place, such as the waiver of a contingency found in the purchase agreement.
Warranty Deed
deed with written guarantees of title.
Warehousing
the temporary funding and holding by a lending institution of mortgages originated by a mortgage broker until such time as the mortgage market improves or until the mortgage broker accumulates a sufficient amount of mortgages to interest a permanent mortgage purchaser.
Way of Necessity
an easement for a roadway which the owner of a landlocked tract is entitled to acquire across adjoining land in order to provide a means of ingress and egress with respect to landlocked property.
Writ
a formal legal document issued by a court ordering or prohibiting the performance of some action.
Writ of Execution
a direct command from the court to the sheriff to carry out the action required by the write.

Z

Zoning
city or county regulations governing the use of property.
Zoning Ordinances
laws passed by local governments regulating the size, type, structure nature and use of buildings. Often referred to as zoning laws and zoning regulations, and divided into those which regulate the height or bulk of buildings within certain designated zones or districts and those which prescribe the type of buildings which may be constructed, and the use to which buildings within certain designated zones or distracts may be put.

This article may not be resold, reprinted, resyndicated or redistributed without the written permission from Escrow Publishing Company.

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Loan Glossary

Sandy Gadow

Also see the Title Insurance Glossary

Adjustable Rate Loan or Adjustable Rate Mortgage (ARM)
A loan with an interest rate that changes during the term of the loan. The payments generally increase or decrease with the interest rate. Rate is based on one of several “index” options.
Amortize
Payoff off a debt in installments which includes both principal and interest.
Amount Financed
A required Truth in Lending Act disclosure for consumer loans. It is calculated by starting with the full amount borrowed (principal) and subtracting out the dollar amount of prepaid finance charges (finance charges the borrower is paying in advance).
Application Fee
A fee charged by the lender or broker for the loan application.
Appraisal
A report that estimates the value of real estate.
Appraiser
A person typically hired by a lender to provide an appraisal.
Annual percentage rate (APR)
A required Truth in Lending Act disclosure for consumer loans. It is a calculation of the cost of credit as a yearly rate and shown as a percentage. It is often higher than the interest rate because it incorporates prepaid finance charges that are not interest.
Arbitration
A privately conducted trial to resolve a dispute. Arbitration can be binding (in which case there is no appeal), or non-binding, in which an appeal may be possible.
Aztec Recognition Agreement
An agreement a bank draws up to give its lien first priority over the co-op’s lien in case the shareholder defaults. Also, the co-op corporation promises to notify the lender if the owner fails to pay maintenance or other fees to the co-op.
Back End Ratio
A ratio used in Fannie Mae mortgages which indicates a borrower’s ability to make mortgage payments. Total monthly debt, including expenses such as mortgage payments (made up of PITI), credit-card payments, child support and other loan payments are divided by gross monthly income. Lenders use this ratio in conjunction with the front-end ratio to approve mortgages.
Balloon payment
A scheduled payment due at the end of a loan term that is substantially greater than the regular monthly payments. This may be a very large payment. It is designed to occur when the regular payments do not pay off all interest and principal owing (not fully amortizing) on the loan over the term of the loan.
Borrower
A person who receives funds in the form of a loan with the obligation to repay the loan in full.
Broker Agreement (Mortgage Broker Agreement)
A contract between a borrower and a mortgage broker. It describes what the broker will do for the borrower, and the terms of the agreement, including compensation.
Broker Compensation or Fee
The amount of money the broker will receive for finding a loan for a borrower. This may be an amount paid by the borrower, an amount paid by the lender or a combination of the two.
Cash-out Refinancing Loan
A loan that refinances a prior mortgage and that provides additional cash to the borrower. funds.
Closing Costs
A general term to describe the fees that a borrower will pay at closing. Sometimes called “settlement fees.”
Conforming Loans
Loans which conform to Fannie Mae guidelines.
Co-op
A unit in a large building operating as a cooperative corporation.  Individual units are leased exclusively to purchasers. Buyers are issued shares in the corporation rather than receiving a deed to the property.  Special restrictions limit the terms of purchase and use of the unit.
Courier Fee
This is a fee that may be charged to send documents or payments by courier, messenger or overnight mail service to various parties involved in the loan transaction.
Credit Report
This is a report which is generated by a credit reporting agency (such as Trans Union, Experion or Equifax). It is supposed to show accurately the history of your on-time and late payments on mortgages, credit cards, rent, utilities, and other debts. It may also show how much you owe on your various debts and whether you have taken the maximum amount of credit available to you through credit card borrowing. Your credit reports are used, with other information, to generate a credit score that is supposed to reflect how good a credit risk you are.
Credit Score
This is a number that is supposed to show the lender how likely you are to repay a loan–whether you are a good or poor credit risk. This score can be a very big factor in determining whether you will get a loan, from whom, and what interest rate and fees you will be charged for your loan. The score is generated by a mathematical formula that considers your credit reports and other factors. It may also be referred to as FICO score (Fair Isaac Company) or Beacon score or some other name-these are companies that create credit scores. (See Chapter 6 in The Complete Guide to Your Real Estate Closing.)
Deed of Trust
In some states loans are secured by means of a document called a deed of trust, instead of a mortgage document.
Document Preparation Fee
An amount of money that you may be charged for the preparation of mortgage loan documents. This charge will be shown on the HUD-1 Settlement Statement.
Equity
This is the dollar amount of your home that you really own. You can calculate your equity by taking the market value of your home and subtracting out the debt that is secured by your home. For example, if your house is worth $150,000 and you owe $65,000 on a first mortgage and $15,000 on a home equity line of credit. You would take $150,000 – $80,000 (65,000 + 15,000) to arrive at $70,000 in equity.
Fees
This is money you pay or is charged to you up front to get a mortgage loan. You may pay fees in cash or finance them (or a portion of them) as part of the loan. If you finance fees, your loan balance will be higher and your equity will be lower. The fees appear on the Good Faith Estimate and HUD-1 Settlement Statement. Many of these fees are negotiable or can be reduced if you shop around.
FICO
Credit scores calculated by Fair Isaac Company are often referred to as FICO Normally an average of credit scores taken by 3 national credit bureaus.
Finance Charge
The finance charge is a disclosure that appears on the Truth in Lending Act Disclosure Statement. It is intended to show the cost of your loan as a dollar amount. It includes (1) interest that will be charged over the life of the loan and (2) some up front fees (prepaid finance charges). Prepaid finance charges include such items as mortgage broker fees; lender fees; points; and some closing agent fees. Any closing fees that are unreasonably high should also be included. You may also be required to pay other fees that will not be included in the finance charge.
Finance Companies
These are companies that make loans which are generally at higher rates than are available from banks or credit unions.
Fixed Rate Loan
A loan where the interest rate does not change during the term of the loan.
Flood Certification Fee
A fee charged to determine if the property lies in a flood zone and whether flood insurance is required.
Foreclosure
The legal procedure by which a lender holding a mortgage on your house forces a sale of your house to obtain repayment of your loan. Foreclosure proceedings are typically started by a lender when you do not pay your loan on time. It might also be started if you fail to pay property taxes or insurance or keep other promises.
Foreign National
Term used to describe a person who is not a citizen of the country in which they may be visiting or residing. Used for U.S. taxation purposes to mean someone who is not a U.S. citizen.
Front End Ratio
A ratio used in Fannie Mae mortgages which indicates a borrower’s ability to make mortgage payments.  It is calculated as an individual’s monthly housing expenses divided by monthly gross income and is expressed as a percentage.  Lenders use the front-end ratio in conjunction with the back-end ratio to approve mortgages.
Fully Amortizing
This describes a loan where the balance owed at the scheduled end of the loan is zero if all regular monthly payments are made as scheduled.
Good Faith Estimate
This document lists the estimated fees you will have to pay to get the loan. It also identifies who is expected to provide services and receive fees in connection with your loan, such as credit bureaus, appraisers, and closing agents.
Government Recording Fees and Taxes
Fees and taxes required to be paid to the local government where your mortgage documents are filed.
Home Equity Loan
A loan made to a current homeowner that is secured by the equity in the home.
Homeowner’s/Hazard Insurance
Homeowner’s or Hazard Insurance is insurance required to protect the mortgage lender against possible damage to your home. It can also protect the borrower. A borrower must obtain this insurance and bring proof of its existence to the loan closing.
HUD
The U.S. Department of Housing and Urban Development
HUD Special Information Booklet
This is a booklet published by HUD that describes important terms and provides information about the home buying and mortgage loan process.
HUD-1
Also called a “Settlement Statement” of all costs and fees in your closing.
Indorsement
1. the act of signing one’s name on the back of a check or a note, with or without further qualification.
2. the signature described above.
Installment note
a note which provides that payments of a certain sum or amount be paid in more than one payment on the dates specified in the instrument.
Installment sale
also known as an agreement of sale or a land contract. This is a method of reporting capital gains by installments for successive tax years to minimize the impact of capital gains tax in the year of the sale.
Institutional lender
a lender which makes a substantial number of real estate loans, such as banks, savings and loan associations, and insurance companies.
Interest Rate:
Cost of borrowing money expressed as a percentage of the amount borrowed.
Introductory Rate
Some loans have a lower introductory interest rate, which is in effect for a limited time. At the end of the introductory period, the interest rate will increase. It is also known as a “teaser rate.”
Jumbo Loans:
Loans which exceed the Fannie Mae guidelines for loan size and amount. Jumbo loans may have different guidelines from a “conforming” loan.
Late Charge
A penalty you will have to pay if you do not make your loan payment on time. This usually is calculated as a percentage of the payment amount or a minimum dollar amount, such as 5% of the late payment, or $25.
Lender
A company or person that makes mortgage loans, such as a mortgage banker, credit union, bank, or savings and loan. Your lender’s name will appear on your promissory note.
Lender Paid Compensation to Broker
This is also called the Yield Spread Premium. Fee which the lender pays to the mortgage broker for obtaining the loan for his client.
Lien
A claim (legal interest) against a home. Common types of liens include a mortgage, tax lien or judgment lien.
Line of Credit
Also called an “open line of credit” secured on your home. Often there are no closing costs involved, or the lender offers to pay all closing costs. Use like a checking account, borrowing credit over time up to your credit limit.
Loan Approval/Commitment
A lender’s agreement to make a loan on particular terms, including interest rate, fees and charges.
Loan Term
Length of time until your loan is due and payable.
Mediation
A process of dispute resolution in which an impartial third party, a mediator, intervenes in a dispute with the consent of the disputing parties and helps them negotiate an agreement. The role of the mediator is to assist the disputants define and clarify issues, help reduce obstacles to communication, explore possible solutions, and reach a mutually satisfactory agreement.
Mortgage
A mortgage is a promise in which you agree to put up your home as security for a loan. The mortgage is the instrument which secures the Promissory Note, in which you promise to repay the loan at a certain date. The mortgage document allows the lender to force a sale of your home (foreclosure) if, for example, you fail to make payments, to pay property taxes or insurance, or keep other promises. In some states the mortgage document is called a “deed of trust.” Refer to your copy of The Complete Guide to Your Real Estate Closing for full details of these two documents.
Mortgage Banker
A lender, other than a bank, credit union, or savings and loan, that specializes in making residential mortgage loans.
Mortgage Broker
A person or company that obtains a mortgage loan for the borrower from another lender. A mortgage broker will not always be representing the borrower and will not necessarily be looking after the borrower’s best interests.
Mortgage Insurance (PMI or MI)
Insurance that may be required when a loan is greater than 80% of the value of the home. This insurance protects the lender in the event a borrower fails to make his or her loan payments. The borrower ordinarily pays the cost of MI or PMI, in the form of monthly premiums added to the mortgage payments.
Notice of Right to Cancel
Under federal law, you may be permitted to cancel or “rescind” a mortgage loan within a specified time, generally three days, after you have signed loan documents in a refinance, second mortgage or other mortgage loans which do not involve the purchase of a home. . The lender is required to give the borrower notice in writing of this right to cancel or rescind and the deadline to cancel. (read full details in The Complete Guide to Your Real Estate Closing.)
Open-End Loan
A loan that permits the borrower to draw money from time to time up to a credit limit. A home equity line of credit (HELOC) is an open-end loan secured by a home.
Payment Schedule
This information on the Truth in Lending Disclosure Statement shows the amount of the first loan payment, the amount and number of the regularly scheduled payments (usually monthly), the amount of the final payment, and when all those payments are due. The actual payment due may be greater for a number of reasons, including taxes and insurance. If the loan has an “adjustable rate,” the actual payments will differ from the payment schedule.
Points
A fee charged by the lender as additional compensation for making the loan. One “point” is equal to 1% of the principal amount of the loan.
Prepayment Penalty
The charge which can be imposed if you pay off your loan before maturity. The Truth in Lending Disclosure Statement will show whether a loan has a prepayment penalty.
Prime Loan
A loan offered to borrowers with better credit history (sometimes called “A” loans). Prime loans generally are priced lower and cost the borrower less.
Private Mortgage Insurance
Private Mortgage Insurance (PMI or MI)- Insurance required to be paid for by the borrower to protect the lender in the event payments are not made on time; most often required when the loam amount exceeds 80% of the purchase price.
Processing Fee
A fee charged by lenders or brokers to prepare a complete loan application file. A processing fee may be charged to the borrower and shown on the Settlement Statement (HUD-1).
Promissory Note
A legal contract in which the borrower promises to pay back the loan. The “promissory note” sets forth the terms and conditions that apply to the loan repayment, such as interest rate, when payments are due, where payments are made, what happens if payments are not made, etc.
Purchase Money Loan/Mortgage
A loan for the purpose of purchasing a home.
Rate Lock (Lock in the Rate)
Refers to the agreement between the borrower and the lender or broker that as long as the loan is closed within a certain period of time (for example, 30 or 60 days), the interest rate on the loan will be set (locked) at an agreed- upon rate. A “rate lock” agreement must be in writing or it will be unenforceable.
Recording Fees
Fees charged by the local government to record loan documents (for example, the mortgage). These fees will be charged to the borrower and shown on the Settlement Statement (HUD-1).
Refinance
To repay one or more existing mortgage loans by getting a new mortgage loan.
Rescind (also Right of Rescission)
Literally means “to take back” or “cancel.” If a borrower rescinds a mortgage loan, it is as if the mortgage loan never existed. Some borrowers have by law a right to “rescind” certain mortgage loans. Note: A Borrower is entitled to a refund all fees paid in connection with the loan if the Borrower exercises his right of rescission.
Secondary Mortgage Loan
A mortgage loan that is in addition to a mortgage that already exists on the home.
Settlement
The time when loan and mortgage documents are formally signed and the loan transaction is completed. Sometimes called “Closing.”
Settlement Agent (may also be called closing agent or settlement attorney)
The person who organizes and is in charge of the loan closing. The settlement agent is the person who can explain any document the borrower must sign.
Settlement Statement
A mortgage loan closing form required by HUD that is often called a HUD-1. It provides details of all charges and payments made in connection with your loan, and shows to whom they are distributed.
Sub prime Loans
These loans are priced higher than prime loans, often much higher. Loans to borrowers whose credit is less than perfect will almost always be subprime loans. There are also other circumstances that lead to subprime loans, including high outstanding debt, unproven income, etc. Even borrowers with good credit may receive subprime loans for a variety of reason, including fraud, discrimination, failure to shop around, etc.
Survey
A drawing or map showing the precise legal boundaries of a property and other physical features, prepared by a registered land surveyor
Term
The period of time during which loan payments are made. At the end of the loan term, the loan must be paid in full.
Transfer Tax or Charge
This is a government tax or charge that is usually based on a percentage of the property value or loan amount and imposed by state or local law. Many states do not require this charge for a refinance loan, but almost all require it for a home purchase. A transfer tax will be shown on the Settlement Statement (HUD-1).
Truth in Lending Act (TILA)
This is a federal law designed to protect borrowers and to give them enough information to comparison shop for loans. TILA requires certain disclosures about the loan and when they must be given to the borrower. TILA also provides additional protections and prohibitions.
Truth in Lending Disclosure Statement
This is a very important document that federal law requires for all consumer loans.] It provides key information to enable borrowers to shop around and compare loan terms from various lenders.
Underwriting Fee
This is a fee charged by the lender to evaluate whether the borrower qualifies for a mortgage loan. An underwriting fee may be charged to the borrower and shown on the Settlement Statement (HUD-1).
Up Front Costs
These are costs or fees which are charged to the borrower at or before closing of the mortgage loan, such as loan application fees, appraisal fees, points, broker fees, credit report fees, real estate taxes, etc. Up front costs can be paid in several ways: (1) they can be paid by the borrower in cash; or (2) they can be added to the loan amount and financed over the life of the mortgage.
Yield Spread Premium (YSP)
This is a payment made by a lender to a mortgage broker in connection with a borrower’s mortgage transaction. It is shown on the Settlement Statement (HUD-1), but often in a way that is difficult to understand. For example, a $1,000 yield spread premium may be shown as “YSP POC 1000.” Borrowers are often unaware that the YSP payment is being made. The payment of a YSP by a lender affects the interest rate charged to the borrower.

This article may not be resold, reprinted, resyndicated or redistributed without the written permission from Escrow Publishing Company.

 

Posted in Learn

State by State Closing Guide

Sandy Gadow

This summary is merely a general reference guide. Local practices within your city or county may differ. Contact a local title company or real estate attorney for specific information.

This is not intended as a legal advice, but merely as a general reference guide.” For further explanation and an in-depth resource guide for your state refer to The Complete Guide to Your Real Estate Closing, available at www.amazon.com or sandygadow.com/order.html.

 

Please choose a state:
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ALABAMA

Attorneys and title companies handle closings. Conveyance is by warranty deed. Mortgages are the customary security instruments. Foreclosures are non-judicial. Foreclosure notices are published once a week for three weeks on a county-by-county basis. The foreclosure process takes a minimum of 21 days from the date of first publication. After the sale, there is a one-year redemption period. Alabamans use ALTA policies to insure titles. Buyers and sellers negotiate who is going to pay the closing costs and usually split them equally. Property taxes are due and payable annually on October 1st.

ALASKA

Title companies, lenders, and private escrow companies all handle real estate escrows. Conveyance is by warranty deed. Deeds of trust with private power of sale are the customary security instruments. Foreclosures take 90-120 days. Alaskans use ALTA owner’s and lender’s policies with standard endorsements. There are no documentary or transfer taxes. Buyer and seller usually split the closing costs. Property tax payment dates vary throughout the state.

ARIZONA

Title companies and title agents both handle closings. Conveyance is by warranty deed. Whereas deeds of trust are the security instruments most often used, mortgages and “agreements for sale” are used approximately 20% of the time. Foreclosure depends upon the security instrument. For deeds of trust, the foreclosure process takes about 91 days. Arizonans use ALTA owner’s and lender’s policies, standard or extended, with standard endorsements. The seller customarily pays for the owner’s policy, and the buyer pays for the lender’s policy. They split escrow costs otherwise. There are no documentary, transfer, or mortgage taxes. The first property tax installment is due October 1st and delinquent November 1st; the second half is due March 1st and delinquent May 1st. Arizona is a community-property state.

ARKANSAS

Title agents handle escrows, and attorneys conduct closings. Conveyance is by warranty deed. Mortgages are the customary security instruments. Foreclosure requires judicial proceedings, but there are no minimum time limits for completion. Arkansans use ALTA policies and endorsements and receive a 40% discount for reissuance of prior policies. Buyers and sellers pay their own escrow costs. The buyer pays for the lender’s policy; the seller pays for the owner’s. The buyer and seller split the state documentary tax. Property taxes come due three times a year as follows: the third Monday in April, the third Monday in July, and the tenth day of October.

CALIFORNIA
Not only do escrow procedures differ between Northern and Southern California, they also vary somewhat from county to county. Title companies handle closings through escrow in Northern California, whereas escrow companies and lenders handle them in Southern California. Conveyance is by grant deed. Deeds of trust with private power of sale are the security instruments used throughout the state. Foreclosure requires a three-month waiting period after the recording of the notice of default. After the waiting period, the notice of sale is published each week for three consecutive weeks. The borrower may reinstate the loan at any time prior to five business days before the foreclosure sale. All in all, the procedure takes about four months. Californians have both ALTA and CLTA policies available. In Southern California, sellers pay the title insurance premium and the transfer tax. Buyer and seller split the escrow costs. In the Northern California counties of Amador, Merced, Plumas, San Joaquin, and Siskiyou, buyers and sellers share title insurance and escrow costs equally. In Butte County, sellers pay 75%; buyers pay 25%. In Alameda, Calaveras, Colusa, Contra Costa, Lake, Marin, Mendocino, San Francisco, San Mateo, Solano, and Sonoma counties, buyers pay for the title insurance policy, whereas sellers pay in the other Northern California counties. Each California county has its own transfer tax; some cities have additional charges. Property taxes may be paid annually on or before December 10th, or semiannually by December 10th and April 10th. Annual taxes are set at no more than 1 percent of the property’s base value or purchase price. Each year following this, a two percent increase is permissible. (Proposition 13). A property transfer between husband and wife will not result in a new tax assessment of one percent of the fair market value.

The homeowner’s exemption allows an owner to be exempt of the first $7,000 of the property’s full cash value. This exemption is allowed only for primary residences. Homeowner must obtain a form from the county tax assessor, and submit it by February 15 of the current tax year to be eligible for the exemption.  Californians over the age of 55 also have the option of moving primary residences and taking their prior “old” tax base with them to the new property. This exception may be used only once in a lifetime. Referred to as the” Senior Citizen’s Replacement Dwelling Benefit”, Proposition 60 was a constitutional amendment approved by the voters in 1986. It is codified in Section 69.5 of the Revenue & Taxation Code, and allows the transfer of an existing Proposition 13 base year value from a former residence to a replacement residence, if certain conditions are met.   California is a community-property state.
COLORADO

Title companies, brokers, and attorneys all may handle closings. Conveyance is by warranty deed. Deeds of trust are the customary security instruments. Public trustees must sell foreclosure properties within 45-60 days after the filing of a notice of election and demand for sale, but they will grant extensions up to six months following the date of the originally scheduled sale. Subdivided properties may be redeemed within 75 days after sale; agricultural properties may be redeemed within 6 months after sale. The first junior lien holder has 10 additional days to redeem, and the second and other junior lienholders have an additional 5 days each. The public trustee is normally the trustee shown on the deed of trust, a practice unique to Colorado. Foreclosures may be handled judicially. Coloradans have these title insurance policy options: ALTA owner’s, lender’s, leasehold, and construction loan; endorsements are used, too. Although they are negotiable, closing costs are generally split between buyer and seller, and seller normally pays for title insurance. Sellers pay the title insurance premium and the documentary transfer tax. Property taxes may be paid annually at the end of April or semiannually at the ends of February and July.

CONNECTICUT

Attorneys normally conduct closings. Most often conveyance is by warranty deed, but quitclaim deeds do appear. Mortgages are the security instruments. Judicial foreclosures are the rule, either by a suit in equity for strict foreclosure or by a court decree of sale. Court decreed sales preclude redemption, but strict foreclosures allow redemption for 3-6 months, depending upon the discretion of the court. There are lender’s and owner’s title insurance policies available with various endorsements. Buyers customarily pay for examination and title insurance, while sellers pay the documentary and conveyance taxes. Property tax payment dates vary by town.

DELAWARE

Attorneys handle closings. Although quitclaim and general warranty deeds are sometimes used, most conveyances are by special warranty deeds. Mortgages are the security instruments. Foreclosures are judicial and require 90-120 days to complete. ALTA policies and endorsements are prevalent. Buyers pay closing costs and the owner’s title insurance premiums. Buyers and sellers share the state transfer tax. Property taxes are on an annual basis and vary by county.

DISTRICT OF COLUMBIA

Attorneys, title insurance companies, or their agents may conduct closings. Conveyances are by bargain-and-sale deeds. Though mortgages are available, the deed of trust, containing private power of sale, is the security instrument of choice. Foreclosures require at least six weeks and start with a 30-day notice of sale sent by certified mail. ALTA policies and endorsements insure title. Buyers generally pay closing costs, title insurance premiums, and recording taxes. Sellers pay the transfer tax. Property taxes fall due annually or if they’re less than $100,000, semiannually, on September 15th and March 31st.

FLORIDA

Title companies and attorneys handle closings. Conveyance is by warranty deed. Mortgages are the customary security instruments. Foreclosures are judicial and take about 3 months. They involve service by the sheriff, a judgment of foreclosure and sale, advertising, public sale, and finally issuance of a certificate of sale and certificate of title. ALTA policies are commonplace. Buyers pay the escrow and closing costs, while county custom determines who pays for the title insurance. Sellers pay the documentary tax. Property taxes are payable annually, but the due and delinquent dates are months apart, November 1st and April 1st. Under Florida law, a widow or widower has the right to live in their deceased spouse’s house for the remainder of his or her life, even if the home is willed to someone else.   A Homestead Exemption exists for an owner’s residence in Florida. Florida’s exemption is unique because it lacks any monetary cap on the homestead protection, while other states which offer a homestead exemption usually place a limit on the valuation which can be protected.

GEORGIA

Attorneys generally take care of closings. Conveyance is by warranty deed. Security deeds are the security instruments. Foreclosures are non-judicial and take little more than a month because there’s a power of attorney right in the security deed. Foreclosure advertising must appear for 4 consecutive weeks prior to the first Tuesday of the month; that’s when foreclosure sales take place. Georgians use ALTA title insurance policies, including owner’s and lender’s, and they use binders and endorsements. Buyers pay title insurance premiums and also closing costs usually. Sellers pay transfer taxes. Property tax payment dates vary across the state.

HAWAII

By law, only attorneys may prepare property transfer documents, but there are title and escrow companies available to handle escrows and escrow instructions. Conveyance of fee-simple property is by warranty deed; conveyance of leasehold property, which is common throughout the state, is by assignment of lease. Condominiums are everywhere in Hawaii and may be fee simple or leasehold. Sales of some properties, whether fee simple or leasehold, are by agreement of sale. Mortgages are the security instruments. Hawaiians use judicial foreclosures rather than powers of sale for both mortgages and agreements of sale. These foreclosures take 6-12 months and sometimes more, depending upon court schedules. Title companies issue ALTA owner’s and lender’s policies and make numerous endorsements available. Buyers and sellers split escrow fees. Sellers pay the title search costs and the conveyance tax. Buyers pay title insurance premiums for the owner’s and lender’s policies. Property taxes come due twice a year, on February 20th and again on August 20th.

IDAHO

Closings are handled through escrow. Conveyance is by warranty deed or corporate deed, though often there are contracts of sale involved. Either mortgages or deeds of trust may be the security instruments. Deeds of trust which include power of sale provisions are restricted to properties in incorporated areas and properties elsewhere which don’t exceed 20 acres. After the notice of default has been recorded, deed-of-trust foreclosures take at least 120 days, and there’s no redemption period. Judicial foreclosures for mortgages take about a year, depending upon court availability, and there’s a 6-12 month redemption period after that, depending on the type of property involved. Idahoans use ALTA policies and various endorsements. Buyers and sellers split escrow costs in general and negotiate who’s going to pay the title insurance premiums. There are no documentary taxes, mortgage taxes, or transfer taxes, but there are property taxes, and they’re due annually in November and delinquent on December 20th or semiannually on December 20th and June 20th. Idaho is a community-property state.

ILLINOIS

Title companies, lenders, and attorneys may conduct closings, but only attorneys may prepare documents. Lenders generally hire attorneys and have them prepare all the paperwork. Conveyance is by warranty deed. Recorded deeds must include a declaration of the sales price. Mortgages are the customary security instruments. Judicial foreclosure is mandatory and takes at least a year from the filing of the default notice to the expiration of the redemption period. Illinoisans use ALTA policies. Buyers usually pay the closing costs and the lender’s title insurance premiums; sellers pay the owner’s title insurance premiums and the state and county transfer taxes. Property tax payment dates vary. Larger counties typically schedule them for March 1st and September 1st, and smaller counties schedule them for June 1st and September 1st.

INDIANA

Title companies, lenders, real estate agents, and attorneys handle closings. Conveyance is by warranty deed. Mortgages are the customary security instruments. Judicial foreclosures are required; execution of judgments varies from 3 months after filing of the complaint in cases involving mortgages drawn up since July 1, 1975, to 6 months for those drawn up between January 1, 1958, and July 1, 1975, to 12 months for those drawn up before that. Immediately following the execution sale, the highest bidder receives a sheriff’s deed. Hoosiers use ALTA policies and certain endorsements. Buyers usually pay closing costs and the lender’s title insurance costs, while sellers pay for the owner’s policy. There are no documentary, mortgage, or transfer taxes. Property taxes fall due on May 10th and November 10th.

IOWA

Attorneys may conduct closings, and so may real estate agents. Conveyance is usually by warranty deed. Mortgages and deeds of trust are both authorized security instruments, but lenders prefer mortgages because deeds of trust do not circumvent judicial foreclosure proceedings anyway. Those proceedings take at least 4 -6 months. Since Iowa is the only state which does not authorize private title title insurance, Iowans who want it must go through a state administered title company or fund.  Buyers and sellers share the closing costs; sellers pay the documentary taxes. Property taxes are due July 1st based upon the previous January’s assessment.

KANSAS

Title companies, lenders, real estate agents, attorneys, and independent escrow firms all conduct closings. Anyone who conducts a title search must be a licensed abstracter, a designation one receives after passing strict tests and meeting various requirements. Because many land titles stem from Indian origins, deeds involving Indians as parties to a transaction go before the Indian Commission for approval. Conveyance is by warranty deed. Mortgages are the customary security instruments. Judicial foreclosures, the only ones allowed, take about 6 months from filing to sale. Redemption periods vary, the longest being 12 months. Kansans use ALTA policies and endorsements. Buyers and sellers divide closing costs. Buyers pay the lender’s policy costs and the state mortgage taxes; sellers pay for the owner’s policy. Property taxes come due November 1st, but they needn’t be paid in a lump sum until December 31st. They may also be paid in two installments, the first on December 20th and the second on June 20th.

KENTUCKY

Attorneys conduct closings. Conveyance is by grant deed or by bargain-and-sale deed. Deeds must show the name of the preparer, the amount of the total transaction, and the recording reference by which the grantor obtained title. Mortgages are the principal security instruments because deeds of trust offer no power-of-sale advantages. Enforcement of any security instrument requires a decree in equity, a judicial foreclosure proceeding. Kentuckians use ALTA policies and endorsements. Sellers pay closing costs; buyers pay recording fees. Responsibility for payment of title insurance premiums varies according to locale. Property taxes are payable on an annual basis; due dates vary from county to county.

LOUISIANA

Either attorneys or corporate title agents may conduct closings, but a notary must authenticate the documentation. Conveyance is by warranty deed or by act of sale. Mortgages are the security instruments generally used in commercial transactions, while vendor’s liens and seller’s privileges are used in other purchase money situations. Foreclosures are swift (60 days) and sure (no right of redemption). Successful foreclosure sale bidders receive an adjudication from the sheriff. Louisianians use ALTA owner’s and lender’s policies and endorsements. Buyers generally pay the title insurance and closing costs. There are no mortgage or transfer taxes. Property tax payment dates vary from parish to parish (parishes are like counties). Louisiana is a community-property state.


MAINE

Attorneys conduct closings. Conveyance is by warranty or quitclaim deed. Mortgages are the security instruments. Foreclosures may be initiated by any of the following: an act of law for possession; entering into possession and holding the premises by written consent of the mortgagor; entering peaceably, openly, and unopposed in the presence of two witnesses and taking possession; giving public notice in a newspaper for three successive weeks and recording copies of the notice in the Registry of Deeds, and then recording the mortgage within 30 days of the last publication; or by a bill in equity (special cases). In every case, the creditor must record a notice of foreclosure within 30 days. Judicial foreclosure proceedings are also available. Redemption periods vary from 90-365 days depending on the method of foreclosure. Mainers use ALTA owner’s and lender’s policies and endorsements. Buyers pay closing costs and title insurance fees; buyers and sellers share the documentary transfer taxes. Property taxes are due annually on April 1st.

MARYLAND

Attorneys conduct closings, and there has to be a local attorney involved. Conveyance is by grant deed, and the deed must state the consideration involved. Although mortgages are common in some areas, deeds of trust are more prevalent as security instruments. Security instruments may include a private power of sale, so it naturally is the foreclosure method of choice. Marylanders use ALTA policies and endorsements. Buyers pay closing costs, title insurance premiums, and transfer taxes. Property taxes are due annually on July 1st. Police officers in Prince George’s County who are first-time home buyers get a break on their transfer taxes at closing under a law that took effect July 1, 2006.  Officers pay 1 percent of the purchase price rather than 14%, the regular rate.  County school teachers were made eligible for the same tax break in an earlier law without the first-time buyer limitation.  Teachers must commit to living in the house for at least three years and maintain their teaching position with the county during that time.

MASSACHUSETTS

Attorneys handle closings. Conveyance is by warranty deed in the western part of the state and by quitclaim deed in the eastern part. Mortgages with private power of sale are the customary security instruments. Creditors forced to foreclose generally take advantage of the private power of sale, but they may foreclose through peaceable entry (entering unopposed in the presence of two witnesses and taking possession for 3 years) or through the rarely used judicial writ of entry. Frequently, cautious creditors will foreclose through both power of sale and peaceable entry. People in Massachusetts use ALTA owner’s and lender’s title insurance policies and endorsements. Buyers pay closing costs and title insurance fees, except in Worcester, where sellers pay. Sellers pay the documentary taxes. Property taxes are payable in two installments, November 1st and May 1st.

MICHIGAN

Title companies, lenders, real estate agents, and attorneys may conduct closings. Conveyance is by warranty deed which must give the full consideration involved or be accompanied by an affidavit which does. Many transactions involve land contracts. Mortgages are the security instruments. Private foreclosure is permitted; it requires advertising for 4 consecutive weeks and a sale at least 28 days following the date of first publication. The redemption period ranges from 1 to 12 months. Michiganders use ALTA policies and endorsements. Buyers generally pay closing costs and the lender’s title insurance premium, and sellers pay the state transfer tax and the owner’s title insurance premium. Those property taxes which pay for city and school expenses fall due July 1st; others (county taxes, township taxes, and some school taxes) fall due on the first of December. In many tax jurisdictions, taxpayers may opt to pay their taxes in two equal installments without penalty.

MINNESOTA

Title companies, lenders, real estate agents, and attorneys may conduct closings. Conveyance is by warranty deed. Although deeds of trust are authorized, mortgages are the customary security instruments. The redemption period following a foreclosure is 6 months in most cases; it is 12 months if the property is larger than 10 acres or the amount claimed to be due is less than 2/3 of the original debt. This is a strong abstract state. Typically a buyer will accept an abstract and an attorney’s opinion as evidence of title, even though the lender may require title insurance. People in the Minneapolis-St. Paul area use the Torrens system. Minnesotans use ALTA policies. Buyers pay the lender’s and owner’s title insurance premiums and the mortgage tax. Sellers usually pay the closing fees and the transfer taxes. Property taxes are due on May 15th and October 15th.

MISSISSIPPI

Attorneys conduct real estate closings. Conveyance is by warranty deed. Deeds of trust are the customary security instruments. Foreclosure involves a non-judicial process which takes 21-45 days. Mississippians use ALTA policies and endorsements. Buyers and sellers negotiate the payment of title insurance premiums and closing costs. There are no documentary, mortgage, or transfer taxes. Property taxes are payable on an annual basis and become delinquent February 1st.

MISSOURI

Title companies, lenders, real estate agents, and attorneys may conduct closings. In the St. Louis area, title company closings predominate. In the Kansas City area, an escrow company or a title company generally conducts the closing. Conveyance is by warranty deed. Deeds of trust are the customary security instruments and allow private power of sale. The trustee must be named in the deed of trust and must be a Missouri resident. Foreclosure involves publication of a sale notice for 21 days, during which time the debtor may redeem the property or file a notice of redemption. The foreclosure sale buyer receives a trustee’s deed. Missourians use ALTA policies and endorsements. Buyers and sellers generally split the closing costs. Sellers in western Missouri usually pay for the title insurance polices, while elsewhere the buyers pay. There are no documentary, mortgage, or transfer taxes. Property taxes are payable annually and become delinquent January 1st for the previous year.

MONTANA

Real estate closings are handled through escrow. Conveyance is by warranty deed, corporate deed, or grant deed. Mortgages, deeds of trust, and unrecorded contracts of sale are the security instruments. Mortgages require judicial foreclosure, and there’s a 6-12-month redemption period following sale. Foreclosure on deeds of trust involves filing a notice of default and then holding a trustee sale 120 days later. Montanans use ALTA policies and endorsements. Buyers and sellers split the escrow and closing costs; sellers usually pay for the title insurance policies. There are no documentary, mortgage, or transfer taxes. Montanans may pay their property taxes annually by November 30th or semi-annually by November 30th and May 31st.

NEBRASKA

Title companies, lenders, real estate agents, and attorneys all conduct closings. Conveyance is by warranty deed. Mortgages and deeds of trust are the security instruments. Mortgage foreclosures require judicial proceedings and take about 6 months from the date of the first notice when they’re uncontested. Deeds of trust do not require judicial proceedings and take about 90 days. Nebraskans use ALTA policies and endorsements. Buyers and sellers split escrow and closing costs; sellers pay the state’s documentary taxes. Property taxes fall due April 1st and August 1st.

NEVADA

Escrow similar to California’s is used for closings. Conveyance is by grant deed, bargain-and-sale deed, or quitclaim deed. Deeds of trust are the customary security instruments. Foreclosure involves recording a notice of default and mailing a copy within 10 days. Following the mailing there is a 35-day reinstatement period. After that, the beneficiary may accept partial payment or payment in full for a 3-month period. Then come advertising the property for sale for 3 consecutive weeks and finally the sale itself. All of this takes about 4 1/2 months. Nevadans use both ALTA and CLTA policies and endorsements. Buyers and sellers share escrow costs. Buyers pay the lender’s title insurance premiums; sellers pay the owner’s and the state’s transfer tax. Property taxes are payable in one, two, or four payments, the first one being due July 1st. Nevada is a community-property state.

NEW HAMPSHIRE

Attorneys conduct real estate closings. Conveyance is by warranty or quitclaim deed. Mortgages are the customary security instruments. Lenders may foreclosure through judicial action or through whatever power of sale was written into the mortgage originally. Entry, either by legal action or by taking possession peaceably in the presence of two witnesses, is possible under certain legally stated conditions. There is a one-year right-of-redemption period. The people of New Hampshire use ALTA owner’s and lender’s policies. Buyers pay all closing costs and title fees except for the documentary tax; that’s shared with the sellers. Property tax payment dates vary across the state.

NEW JERSEY

Attorneys handle closings in northern New Jersey, and title agents customarily handle them elsewhere. Conveyance is by bargain-and-sale deed with covenants against grantors’ acts (equivalent to a special warranty deed). Mortgages are the most common security instruments though deeds of trust are authorized. Foreclosures require judicial action which take 6-9 months if they’re uncontested. New Jerseyites use ALTA owner’s and lender’s policies. Both buyer and seller pay the escrow and closing costs. The buyer pays the title insurance fees, and the seller pays the transfer tax. Property taxes are payable quarterly on the first of April, July, October, and January.

NEW MEXICO

Real estate closings are conducted through escrows. Conveyance is by warranty or quitclaim deed. Deeds of trust and mortgages are the security instruments. Foreclosures require judicial proceedings, and there’s a 9-month redemption period after judgment. New Mexicans use ALTA owner’s policies, lender’s policies, and construction and leasehold policies; they also use endorsements. Buyers and sellers share escrow costs equally; sellers pay the title insurance premiums. There are no documentary, mortgage, or transfer taxes. Property taxes are payable November 5th and April 5th. New Mexico is a community-property state.

NEW YORK

All parties to a transaction appear with their attorneys for closing. Conveyance is by bargain-and-sale deed. Mortgages are the security instruments in this lien-theory state. Foreclosures require judicial action and take several months if uncontested or longer if contested. New Yorkers use policies of the New York Board of Title Underwriters almost exclusively, though some use the New York State 1946 ALTA Loan Policy. Buyers generally pay most closing costs, including all title insurance fees and mortgage taxes. Sellers pay the state and city transfer taxes. Property tax payment dates vary across the state.

NORTH CAROLINA

Attorneys or lenders may handle closings, and corporate agents issue title insurance. Conveyance is by warranty deed. Deeds of trust with private power of sale are the customary security instruments. Foreclosures are non-judicial, with a 10-day redemption period following the sale. The entire process takes between 45 and 60 days. North Carolinians use ALTA policies, but these require an attorneys opinion before they’re issued. Buyers and sellers negotiate the closing costs, except that buyers pay the recording costs, and sellers pay the document preparation and transfer tax costs. Property taxes fall due annually on the last day of the year.

NORTH DAKOTA

Lenders, together with attorneys, conduct closings. Conveyance is by warranty deed. Mortgages are the security instruments. Foreclosures require about 6 months, including the redemption period. North Dakotans base their title insurance on abstracts and attorneys’ opinions. Buyers usually pay for the closing, the attorney’s opinion, and the title insurance; sellers pay for the abstract. There are no documentary or transfer taxes. Property taxes are due March 15th and October 15th.

OHIO

Title companies and lenders handle closings. Conveyance is by warranty deed. Dower rights require that all documents involving a married person must be executed by both spouses. Mortgages are the security instruments. Judicial foreclosures, the only kind allowed, require about 6-12 months. People in Ohio use ALTA policies; they get a commitment at closing and a policy following the recording of documents. Buyers and sellers negotiate who’s going to pay closing costs and title insurance premiums, but sellers pay the transfer taxes. Property tax payment dates vary throughout the state.

OKLAHOMA

Title companies, lenders, real estate agents, and attorneys may conduct closings. Conveyance is by warranty deed. Mortgages are the usual security instruments. Foreclosures may be by judicial action or by power of sale if properly allowed for in the security instrument. Oklahomans use ALTA policies and endorsements. Buyers and sellers share the closing costs, except that the buyer pays the lender’s policy premium, the seller pays the documentary transfer tax, and the lender pays the mortgage tax. Property taxes may be paid annually on or before the last day of the year or semi-annually by December 31st and March 31st.

OREGON

Closings are handled through escrow. Conveyance is by warranty or bargain-and-sale deed, but land sales contracts are common. Mortgage deeds and deeds of trust are the security instruments. Oregon attorneys usually act as trustees in non-judicial trust-deed foreclosures. Such foreclosures take 5 months from the date of the sale notice; defaults may be cured as late as 5 days prior to sale. Judicial foreclosures on either mortgages or trust deeds allow for a one-year redemption period following sale. Oregonians use ALTA and Oregon Land Title Association policies. Buyers and sellers split escrow costs and transfer taxes; the buyer pays for the lender’s title insurance policy, and the seller pays for the owner’s policy. Property taxes are payable the 15th of November, February, and May; if paid in full by November 15th, owners receive a 3% reduction.

PENNSYLVANIA

Title companies, real estate agents, and approved attorneys may handle closings. Conveyance is by special or general warranty deed. Mortgages are the security instruments. Foreclosures take 1-6 months from filing through judgment plus another 2 months or more from judgment through sale. State law restricts aliens in owning real property with respect to acreage and income and includes special restrictions affecting farmland. Pennsylvanians use ALTA owner’s, lender’s, and leasehold policies. Buyers pay closing costs and title insurance fees; buyers and sellers split the transfer taxes. Property tax payment dates differ across the state.

RHODE ISLAND

Attorneys usually conduct closings, but banks and title companies may also conduct them. Conveyance is by warranty or quitclaim deed. Mortgages are the usual security instruments. Foreclosures follow the power-of-sale provisions contained in mortgage agreements and take about 45 days. Power-of-sale foreclosures offer no redemption provisions, whereas any other foreclosure method carries a 3-year right of redemption. Rhode Islanders use ALTA policies and endorsements. Buyers pay title insurance premiums and closing costs; sellers pay documentary taxes. Property taxes are payable annually, semi-annually, or quarterly with the first payment due in July.

SOUTH CAROLINA

Attorneys customarily handle closings. Conveyance is by warranty deed. Mortgages are most often the security instruments. Foreclosures are judicial and take 3-5 months depending on court schedules. Foreclosure sales take place on the first Monday of every month following publication of notice once a week for 3 consecutive weeks. South Carolinians use owner’s and lender’s ALTA policies and endorsements. Buyers pay closing costs, title insurance premiums, and state mortgage taxes; sellers pay the transfer taxes. Property tax payment dates vary across the state from September 15 to December 31.

SOUTH DAKOTA

Title companies, lenders, real estate agents, and attorneys may handle closings. Conveyance is by warranty deed. Mortgages are the usual security instruments. Foreclosures may occur through judicial proceedings or through the power-of-sale provisions contained in certain mortgage agreements. Sheriff’s sales follow publication of notice by 30 days. The redemption period allowed after sale of parcels smaller than 40 acres and encumbered by mortgages containing power of sale is 180 days; in all other cases, it’s a year. There’s a unique statute which stipulates that all land must be platted in lots or described by sectional references rather than by metes and bounds unless it involves property described in documents recorded prior to 1945. There’s another unique statute called the Affidavit of Possession Statute. Certain exceptions aside, it provides that any person having an unbroken chain of title for 22 years thereafter has a marketable title free of any defects occurring prior to that 22-year period. South Dakotans use ALTA policies and endorsements. Sellers pay the transfer taxes and split the other closing costs, fees, and premiums with the buyers. Property taxes come due May 1st and November 1st.

TENNESSEE

A title company attorney, a party to the contract, a lender’s representative, or an outside attorney may conduct a closing. Conveyance is by warranty or quitclaim deed. Deeds of trust are the customary security instruments. Foreclosures, which are handled according to trustee sale provisions, are swift, that is, 22 days from the first publication of the notice until the public sale, and there is normally no right of redemption after that. Tennesseans use ALTA policies and endorsements. The payment of title insurance premiums, closing costs, mortgage taxes, and transfer taxes varies according to local practice. Property taxes are payable annually on the first Monday in October.

TEXAS

Title companies normally handle closings. Conveyance is by warranty deed. Deeds of trust are the most common security instruments. Following the posting of foreclosure sales at the local courthouse for at least 21 days, the sales themselves take place at the courthouse on the first Tuesday of the month. Texans use only Texas standard policy forms of title insurance. Buyers and sellers negotiate closing costs. There aren’t any documentary, transfer, or mortgage taxes. Property taxes notices are send around October 1st, but are not due until the end of the year. Texas is a community-property state.

UTAH

Lenders handle about 60% of the escrows and title companies handle the rest. Conveyance is by warranty deed. Mortgages and deeds of trust with private power of sale are the security instruments. Mortgage foreclosures require judicial proceedings which take about a year; deed-of-trust foreclosures take advantage of private power-of-sale provisions and take about 4 months. Utahans use ALTA owner’s and lender’s policies and endorsements. Buyers and sellers split escrow fees, and sellers pay the title insurance premiums. There are no documentary, transfer, or mortgage taxes. Property taxes are payable November 30th.

VERMONT

Attorneys take care of closings. Conveyance is by warranty or quitclaim deed. Mortgages are the customary security instruments, but large commercial transactions often employ deeds of trust . Mortgage foreclosures require judicial proceedings for „strict foreclosure‰; after sale, there is a redemption period of one year for mortgages dated prior to April 1, 1968, and 6 months for all others. Vermonters use ALTA owner’s and lender’s policies and endorsements. Buyers pay recording fees, title insurance premiums, and transfer taxes. Property tax payment dates vary across the state.

VIRGINIA

Attorneys and title companies conduct real estate closings. Conveyance is by bargain-and-sale deed. Deeds of trust are the customary security instruments. Foreclosure takes about 2 months. Virginians use ALTA policies and endorsements. Buyers pay the title insurance premiums and the various taxes. Property tax payment dates vary.

WASHINGTON

Title companies, independent escrow companies, lenders, and attorneys may handle escrows. An attorney must prepare real estate documents, but there is a limited practice rule which lets licensed non-attorneys prepare most of the commonly used real estate documents. Conveyance is by warranty deed. Both deeds of trust with private power of sale and mortgages are used as security instruments. Mortgages require judicial foreclosure. Deeds of trust require that a notice of default be sent first and 30 days later, a notice of sale. The notice of sale must be recorded, posted, and mailed at least 90 days before the sale, and the sale cannot take place any earlier than 190 days after the actual default. Sellers generally pay the title insurance premiums and the revenue tax; buyers and sellers split everything else. Property taxes are payable April 30th and October 31st. Washington is a community-property state.

WEST VIRGINIA

Attorneys conduct escrow closings, although lenders and real estate agents do them occasionally. Conveyance is by warranty deed, bargain-and-sale deed, or grant deed. Deeds of trust are the customary security instruments. Foreclosures are great for lenders; when uncontested, they take only a month. West Virginians use ALTA policies and endorsements. Buyers pay the title insurance premiums and sellers pay the documentary taxes; they divide the other closing costs. Property taxes may be paid in a lump sum after July 6th or in two installments on September 1st and March 1st.

WISCONSIN

Lenders and title companies conduct what are called “table closings” throughout the state, except in the Milwaukee area, where attorneys conduct the closings. Conveyance is by warranty deed, but installment land contracts are used extensively, too. Mortgages are the customary security instruments. Within limits, the actual mortgage wording determines foreclosure requirements; redemption varies from 2 months for abandoned property to a full year in some cases. Lenders generally waive their right to a deficiency judgment in order to reduce the redemption period to 6 months. Wisconsinites use ALTA policies and endorsements. Buyers generally pay closing costs and the lender’s policy fees; sellers pay the owner’s policy fees and the transfer taxes. In transactions involving homesteads, conveyances may be void if not joined into by the spouse. Property taxes may be paid in full on February 28th, or they may be paid half on January 31st and half on July 31st. Wisconsin is a quasi-community-property state.

WYOMING

Real estate agents generally conduct closings. Conveyance is by warranty deed. Mortgages are the usual security instruments. Foreclosures may follow judicial or power-of-sale proceedings. Residential foreclosures take around 120 days; agricultural foreclosures, around 13 months. Wyomingites use ALTA owner’s and lender’s policies and endorsements. Buyer and seller negotiate who’s going to pay the various closing costs and title insurance fees. There are no documentary, mortgage, or transfer taxes. Property taxes may be paid annually December 31st or semi-annually September 1st and March 1st.

All Rights Reserved. Distributed by Escrow Publishing Company. This article may not be resold, reprinted, resyndicated or redistributed without the written permission from the publisher.

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The Complete Guide to Real Estate Closings

Sandy Gadow

Sandy Gadow is the author of “The Complete Guide to Your Real Estate Closing,” an essential tool in understanding the entire escrow and closing process. This highly regarded guidebook leads readers step-by-step through the transaction process from opening escrow, to obtaining financing, to holding title to closing the deal.  You will learn what to expect on closing day, how to protect your rights, and what title insurance is and why it’s important, the role of a settlement agent, and other helpful information to clear up your confusion, and save you money in the process. Use it as your one-stop resource for understanding each detail, answering each question, and preventing minor disputes from becoming major roadblocks.

In short, “The Complete Guide to Your Real Estate Closing” fills a niche no other book fills, giving you a better understanding of how real estate transactions work and of what your closing officer or agent should be doing for you.

“The Complete Guide to Your Real Estate Closing” is the latest, updated version of All About Escrow and Real Estate Closings which went through six printings and has more than 350,000 copies in circulation. This book has a proven track record for saving time and money for real estate purchasers. See what the reviewers have to say about The Complete Guide to Your Real Estate Closing.

“The Complete Guide to Your Real Estate Closing” covers an amazing amount of ground. For a detailed look at what’s inside, see Table of Contents. Some of the highlights are listed below.

Closings
Just what is “closing” or “escrow.” What is “title insurance,” “a preliminary title report,” a “title commitment” and a “survey.” Your questions will be answered in easy-to understand, simple language. Information which can help save you thousands of dollars. A closing checklist walks you through the closing process ahead of time. You’ll be confident and fully prepared.

Loan Tips
Determine which loan is best for you. Learn how to clean up your credit rating and how to avoid paying costly points and loan fees. Learn which fees are negotiable and which fees must be paid.

Holding Title
Learn how to best hold title under different circumstances. The manner in which you hold title can have significant tax consequences.

Statements & Forms
An in depth look at all closing statements and forms, and how they work. All the fine print explained explicitly. You’ll be in control of your closing!

Sample Worksheets
Sample worksheets included. Sample Forms such as Power of Attorney and Quitclaim Deed are included.

Instructional Purposes
This book can be used as an instructional manual for title companies and real estate schools. Email us for details and course outlines.

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“The Nuts and Bolts of Escrow”, is a continuing education escrow course written by Sandy Gadow and offered for Realtors and real estate associates in conjunction with Pro U. Net. Click here to buy.

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