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Why
do I need a title company?
The title company researches and investigates
information affecting the title to the property you are purchasing
starting with the public land records.
What
does the investigation show?
- This investigation will ensure that the
seller of the property is the legal owner.
- All liens, judgments
and open mortgages are taken care of before title is transferred
to you.
- There are no
restrictions or easements which may limit your right to the
use of the property or that grant rights to non-owners.
- It will show
the status of property taxes on other public and private assessments.
- Procurement
of a property location survey to show the location of the dwelling
and other structures within the property lines.
What
is the purpose of the title search or abstract?
To transfer the property's title on ownership
free and clear from the seller to the buyer.
Who
will do my settlement or closing?
The title company also conducts the
closing or settlement; handling the transfer of funds between
the buyer, seller and lender.
The title company also prepares and records
all documents necessary for clear title transfer.
How
is the lender involved in the settlement?
The lender prepares and sends the title
company a Lenders closing package which includes the deed, mortgage,
deed of trust, promissory note, settlement statement with instruction,
and all other related papers required for completion of the settlement
transaction.
When do I need
a title company?
When you have a ratified contract or an
agreeable contract which accepted and is signed by the seller(s)
and you the buyer(s).
Who
chooses the title company?
By law you have the right to choose the
title company of choice who would conduct your settlement.
When
is a title company needed?
Usually when someone is buying a home or
refinancing they notify the title company who will immediately
begin to examine the property's title.
What
is title insurance?
Title insurance protects the new owner's
rights for the duration of ownership and guards against any possible
losses due to problems such as forged wills or deeds undisclosed
heirs; clerical error, invalid court proceedings, hidden marriages,
divorces, defective deeds and other problems that cannot be determined
from a search of the public records.
How
does the title insurance policy protect against all the dangers?
If a claim is made against your title
as insured, the title company protects you by:
- Defending your title, in court if necessary,
completely at our expense.
- Bearing the cost of settling the claim.
If it proves valid, in order to perfect your title and keep
you in possession of your property.
Do
I have to get the title insurance?
There is a Lender's Coverage and an Owner's
coverage- most lenders require you to take out lender's coverage
to protect them against any possible problem on title. However,
the Owner's coverage is optional.
What
happens after settlement?
The title company prepares and records
the Deed, Deed of Trust and all necessary documents that must
be recorded. The title company will get the original document
back from the courthouse, and send you the Deed with your policy
and send the Lender the Deed of Trust with their title policy.
Again the role of a title company is to
handle the entire settlement process from providing the title
search and issuing the title insurance to providing final closing
prior to settlement right up to conducting the final settlement.
What
is ground rent?
In Maryland, a ground rent is established
on a lot and all of the improvements on it for a lease of 99 years.
The rent is usually payable semi-annually with the lease renewable
forever.
The most important thing to know when you
buy a house subject to a ground rent is that you are not buying
the property in fee simple, which is the most absolute and unconditional
form of private property ownership.
What
are the types of Deeds?
LEASEHOLD DEED- to convey property that is
subject to ground rent.
FEE SIMPLE DEED- to convey property that
has no ground rent.
GROUND RENT REDEMPTION DEED - used by the
leasehold owner of the property to redeem the ground rent from
the ground rent holder so that the leasehold owner no longer has
to pay ground rent; the property then becomes owned in fee simple.
The redemption price is based on statutory law (how much the ground
rent is, how long ago it was created).
GROUND RENT DEED - used to convey the ground
rent interest in the property so that instead of "Mr. Smith"
being paid ground rent every 6 months by the leasehold owner,
ground rent instead is paid to "Ms. Jones."
NO CONSIDERATION DEED - used to convey property
where no consideration is involved. If the transfer of property
is between close family members (mother, father, brother, sister,
child) there is no transfer tax. If the transfer is between other
people the transfer taxes are based on the amount of any outstanding
mortgage or appraised value of the property.
SUBSTITUTE TRUSTEE'S DEED - used by a Substitute
Trustee in a foreclosure action to convey property that was foreclosed.
WARRANTY DEED - convey title with full warranty
that title is good and marketable.
QUITCLAIM DEED - no warranties as to title;
you convey only whatever interest you may have.
LIFE ESTATE DEED - the property is conveyed
to someone for life (usually with the full power to sell, transfer,
borrow, etc.), and upon death the property automatically goes
to the remainderperson specified in the deed.
What
are the types of tenancies?
SOLE OWNER- one person in title
TENANTS IN COMMON - more than one person
in title; each person has a percent interest (10%, 90%, etc.)
that can be conveyed to anyone else. If no percent interest is
specified, it is assumed each has an equal interest in the property.
Each tenant in common can convey his/her interest separately to
someone else without the consent of the other tenants in common.
JOINT TENANTS - more than one person in title;
each person has an interested in the whole property. Upon the
death of one joint tenant the property automatically passes to
the joint tenants. The last surviving joint tenant can convey
the property to whomever he/she wants. (To convey the property
requires the consent/signature of all joint tenants.)
TENANTS BY THE ENTIRETY - only for spouses;
upon the death of one spouse the property automatically passes
to the other spouse.
Each of the above has different tax consequences
upon the death of one of the parties to the deed, and different
consequences for the purpose of collecting on judgments.
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