closing costs

When you work in the real estate industry, it’s easy to get so used to the “lingo” that you forget sometimes the words and terms you’re using aren’t necessarily mainstream knowledge.

That got us thinking that it’s worth taking the time to explain a few of the most common real estate terms that we industry professionals just fling around carelessly – assuming everyone knows what we’re talking about. And since there are about a gajillion different phrases used in any given real estate transaction, we’d like to help explain one of the most common – but perhaps least understood – real estate terms that will affect virtually all buyers – namely: Title Insurance Policies.

A standard inclusion in pretty much any real estate purchase or sale, it’s one of those things that any REALTOR™ will just take for granted needs no explanation. Surely everyone knows what it is, right? (What? You mean you didn’t read the latest Nevada Revised Real Estate Statutes and Regulations when you were on vacation?)

Wrong. In fact, we have friends who have bought and sold many different homes through the years who finally ‘fessed up around their 5th escrow transaction that they had no idea what that charge is on their closing documents for “Title Insurance Policy Premium.”

So let’s start out with the simplest explanation:

The primary purpose of Title Insurance is to eliminate risks and prevent losses caused by defects in title arising out of events that have happened in the past.

Oh gee. Now that we see it in writing, that doesn’t really help much, does it? Okay – then let’s break it down further with a few Q&As.

What is it?

• Title insurance is a policy that protects you from unanticipated claims that could cause you to lose your home.

• It’s protection against historical mistakes and fraud committed with respect to your home.

How does it work?

• Unlike other insurance policies (such as life, health, or auto) – which protect against potential future events – a Title Insurance Policy insures against events that occurred in the property’s past.

Why is Title Insurance important?

• Mistakes happen. While your seller is obligated to sell you the home with a “clear title” (in other words, no liens, encumbrances, or claims that you didn’t agree to) – they may not always disclose title defects they know of; or even be aware of things that occurred prior to their purchase of the home.

• Imagine one scenario: You have to leave your home because county records show that the seller who sold you the home never really owned it. (It happens!)

• Or, the seller had work done on the home previously, but failed to pay the workers in full. The workers or subcontractor may have filed a lien against the property, and if it’s not paid – you could be the one held financially responsible to pay the liens in order to eliminate them from the title to your property.

• Title insurance protects against situations like this. When a claim is made, your title insurer will research the claim on your behalf and, if necessary, will make you whole for any loss incurred (which may even include paying your remaining mortgage balance in full, as well as related expenses.)

Who issues the Title Insurance Policy?

• Your escrow officer (or lender) will open an order, and the title agent will begin a title search.

• During escrow, a Preliminary Title Report is issued to the customer for review and approval.

• After closing and recording of all the purchase and loan documents, the escrow officer will disburse funds to pay the title company for the policy.

• Then the policy is created and issued to the owner or lender (depending on which policy is purchased).

What does it cost?

• It is a one-time premium paid at the close of escrow. The cost will differ based on the sales price of the home and/or the rates of the title company issuing the policy. (Estimate between .4%-.75% of your loan amount.)

How is it paid?

• It will show up on your escrow closing statement as an “Owner’s (or Lender’s) Title Insurance.”

Who should buy Title Insurance?

• In our opinion – everyone.

• There are two types of policies: Owner’s Title Insurance and Lender’s Title Insurance.

• It is optional for Owners.

• But nearly every mortgage lender will require that a borrower purchase a Lender’s Title Insurance policy.

Whew! That’s quite a bit of information! And to think, before we wrote this all down we just expected our clients to know (apparently by osmosis!) all that the phrase “Title Insurance” entailed. But hopefully, this helps to make it a little bit easier to understand in any future real estate purchase you make. (And if you have any other questions about this topic, feel free to contact us and we’ll help to clear them up.)

The bottom line is this: Yes, you want to purchase Title Insurance on your home. Considering the relatively minor cost – in relation to your overall financial investment in buying a home – it is money well spent. You may never need it, but if you do – you’ll be awfully, awfully glad it’s there.

New Home Resource helps current and future homeowners with all of their Las Vegas real estate needs. Whether your preference is for a newly built home from a local builder, or a resale property in just the right location, a New Home Resource Realtor® is here to find the perfect property for you. Please contact a New Home Resource Realtor® today at 702-365-1000 or at www.newhomeresource.com. Broker Joanna Piette, and agents Denise Moreno Thrasher, Jessica O’Brien, Evelyn ‘Beng’ Kern, Lance Partin and Kathy Paterniti are all here to help!

When it comes to selling your home, there are certain rules that are pretty hard and fast, regardless of the state of the real estate market you’re selling in. In a difficult market, even more creativity may be necessary so that your home stands out from the crowd and has a better-than-even shot at finding a buyer. But before you get to those bells and whistles, make sure this vital checklist of items is marked as “Done!”

1. That “For Sale By Owner” (FSBO) Sign is Not Your Friend.

Numbers don’t lie. Those who sell homes without the aid of a real estate professional find their homes on the market longer, and get a lower price – than those who have representation. From digital and print exposure to signage and industry networking, most FSBO sellers don’t have access to even a small percentage of these tools. They make a difference in your bottom line.

2. Set the Right Price.

And by this, we mean don’t overprice, and don’t underprice, either. A professional understands the market and can gather information of what comparable homes are selling for. You want everything you can get for your home, right?

3. Repairs.

Some might think waiting to do repairs ‘until the buyer’s walk-through’ is the smart way to go. Maybe they think they’ll save a few dollars if certain things aren’t ‘noticed.’ Wrong. Prospective buyers who view your home see it all . . . and often even more than you do. When they’re comparing your home to the many others they are considering, that puts you at the bottom of the list. Unless someone is looking for a fixer-upper (and for that, they’ll expect a discount on your price) – make those repairs BEFORE you start showing. You know the saying, you never get a second chance to make a good first impression.

4. Straighten Up!

Buyers also look at lots of new home models before they purchase – whether they’re considering buying there, or simply want decorating tips for the home they do buy. They’re used to seeing homes in clean, uncluttered condition, nicely presented and not crowded with “stuff.” Even if you need to rent a storage space to place extra furniture or boxed belongings, it will be worth it when you reap the reward of the best sales price.

5. Vacant Homes – Big Mistake.

Your job may have called you away sooner than you planned and you had to move out before you could sell. But when buyers view vacant homes, its emptiness gives the impression of ‘abandonment’ – and all the bad images that conjures up in maintenance neglect and more. A small investment to use a local staging company (that dresses up your home with furniture and accessories) will pay for itself in a faster sale.

6. It’s Not Personal – It’s Just Business.

Another excellent reason to have a real estate professional manage your transaction. Your home is personal to you (as it should be) – and it’s easy to let ego get in the way of a win-win transaction for both parties.

7. Disclose, Disclose, Disclose.

It’s a simple document (Real Estate Disclosure) that asks all the right questions – so that you can answer honestly about the condition and your knowledge of the workings in your home. Don’t give your potential buyers any reason to question your integrity, or worse yet, discover imperfections after they purchase. (Lawsuit, anyone?)

8. Timing.

When it comes to real estate, timing really CAN be everything. Your personal financial situation may require closing escrow by a certain date to save yourself thousands in extra taxes. Make sure you know where you stand by speaking with your accountant beforehand, and build those deadlines into your sales contract.

9. Know the Costs.

This one is simple – if you just read your documentation and ask your real estate agent questions about any numbers you don’t understand. Request a copy of your closing costs statement prior to escrow recording so there’s no financial surprises at the last minute.

10. Photos Can Make Your Home.

More than 90% of all homebuyers begin their search online – so that’s the very first place your home will be seen. Amateur photos taken with a smartphone or digital pad aren’t going to show off your home’s best side. Your real estate agent will make sure that top-quality images are taken and used to market your home in all their coordinated online sales efforts.

New Home Resource helps current and future homeowners with their Las Vegas real estate needs. Please contact a New Home Resource Realtor® today at 702-365-1000 or at www.newhomeresource.com. Broker Joanna Piette, and agents Denise Moreno Thrasher, Jessica O’Brien, Evelyn ‘Beng’ Kern, Lance Partin and Kathy Paterniti are all here to help!