Real Estate Resources

Resources – Real Estate

Understanding Title Insurance and Its Benefits

When buying a home or commercial property, it's important to ensure that you have clear ownership of the property. One key way to protect yourself is through title insurance. Here's a simple explanation of what title insurance is, how it benefits you, and the risks of not purchasing it:

What is Title Insurance?

Title insurance is a type of insurance policy that protects property owners and lenders from financial loss due to defects in the title to a property. The title is a legal term for the rights of ownership of a property. When you purchase a property, the title should be clear, meaning there are no legal issues or claims against it. Title insurance ensures that if any issues with the title are discovered after you buy the property, you are protected.

Benefits of Title Insurance

1 Protects Against Hidden Issues

Unknown Liens: Sometimes, there might be unpaid debts or legal claims against the property that were not discovered during the initial title search. Title insurance covers these unknown liens.

Forgery: If someone forged a previous owner’s signature on a deed, title insurance protects you from any legal consequences.

Errors in Public Records: Mistakes can happen in public records, such as incorrect information about past ownership or descriptions of the property. Title insurance helps correct these errors.

2 Ensures Clear Ownership

Peace of Mind: Knowing that you have clear ownership of the property and that no one else can claim it provides peace of mind. This is especially important for large investments like buying a home or commercial property.

Legal Defense: If someone challenges your ownership, title insurance covers the cost of legal defense. This means you don’t have to worry about paying expensive legal fees out of pocket.

3 Required by Lenders

Lender’s Policy: Most lenders require title insurance to protect their investment in the property. Lender’s title insurance ensures that the lender’s interest is protected until the mortgage is paid off.

Owner’s Policy: While lender’s title insurance protects the lender, an owner’s policy protects you, the buyer. It’s highly recommended to get an owner’s policy for complete protection.

4 One-Time Premium

Single Payment: Unlike other types of insurance that require monthly or yearly payments, title insurance is a one-time premium paid at the closing of the property. This one-time payment provides protection for as long as you or your heirs own the property.

5 Coverage for Various Situations

Boundary Disputes: Title insurance can help resolve disputes over property boundaries.

Missing Heirs: If a previous owner passed away and an heir comes forward claiming ownership, title insurance protects you from financial loss.

Risks of Not Purchasing Title Insurance

1 Financial Loss

Without title insurance, you are personally responsible for any financial losses due to defects in the title. This could include paying off old liens or debts attached to the property.

2 Legal Battles

If someone challenges your ownership of the property, you would have to pay for your legal defense out of pocket. Legal disputes can be lengthy and costly.

3 Loss of Property

In severe cases, you could lose your property if a court rules in favor of someone challenging your ownership due to a title defect.

4 Unresolved Title Issues

Problems like forged documents, errors in public records, or undisclosed heirs can surface after the purchase. Without title insurance, resolving these issues can be complicated and expensive.

5 Lender Requirements

Most lenders require title insurance to protect their investment. Without it, you might have difficulty securing a mortgage for your property.

Why Choose Title Insurance?

Choosing title insurance is a smart decision for anyone buying real estate. It provides comprehensive protection against potential issues that could arise after purchasing the property. At Edwards Law, we highly recommend title insurance to all our clients to ensure their investments are secure. Contact Edwards Law today to learn more about how title insurance can protect your real estate investment, and ensure a smooth and secure transaction.

The Real Estate Closing Process in Georgia

Never been involved in a real estate closing? Need a refresher on how the closing process goes? Here’s a helpful guide outlining the residential and commercial closing processes in the State of Georgia:

Residential Real Estate Closings in Georgia

1

Loan Application and Pre-Approval

We recommend that a buyer begin by finding a reputable lender before ever looking for houses. This way you don’t waste time looking at houses you may not be able to afford. If you don’t currently have a lender, we can help you select a great lender whose services will best meet your needs. During this process, the buyer will provide the lender with financial information about the buyer’s income, debts, assets, and credit history. Once the lender issues a pre-approval letter, the buyer is ready to start looking for their new home!

2

Make an Offer and Get Under Contract

Patience is a virtue, especially during the home search process. After finding a suitable property, the buyer usually works with a real estate agent to negotiate a competitive, fair offer based on comparable homes. If the buyer and seller reach an agreement on the price and other terms of the sale, the house will go under contract and into escrow, the period of time it takes to complete all of the remaining steps in the home buying process. It is at this time that the closing attorney is selected. This is when you make sure Edwards Law is chosen as your closing attorney. We sweat the details because the details matter in the real estate closing process. If you need a referral for an experienced and trusted real estate agent, we can provide you with a great referral.

3

Home Inspection and Repair Procedure

It is always advised that buyers hire a qualified inspector to visually inspect the structure and components of their potential home and look for any immediate or potential problems. The inspector will prepare a list of recommended repairs and send them to the buyer. If the contract includes a contingency for a Due Diligence Period, the buyer will have the right to request that the seller address any of the recommended repairs or other concerns regarding the property.

4

Due Diligence

During this period, the buyer has the opportunity to gather as much information as possible about the property to make an informed decision on whether to proceed with the transaction. Many buyers use this time to order and review inspections, surveys, and title examinations.

5

Appraisal

For lender-financed transactions, the lender will require an appraisal to ensure that the value of the property is adequate to justify the loan.

6

Loan Approval

Once the appraisal is complete and the lender has verified the buyer’s financial circumstances, the lender makes an official decision on loan approval.

7

Closing Attorney

After the loan is approved, the real estate closing attorney will begin to prepare for and facilitate the closing. The attorney checks the title to the property, assists in clearing up any title issues affecting the seller’s ability to sell the property, prepares and explains necessary paperwork, and handles the receipt and distribution of all funds. We also certify title and offer title insurance to the lender and/or the buyer on the property being purchased and/or financed. Title insurance protects the purchaser and the lender in the event a future problem is found with the title. Title insurance is highly recommended, because it protects the buyer against claims of interests, rights, and liens against the property being purchased. For lenders, title insurance is a requirement because the lender seeks every assurance that it has secured its first lien position on the property.

8

Termite Inspection

Most contracts require the seller to hire a licensed pest control service to verify that the property is free from termites or other wood-destroying organisms. If an infestation is discovered, treatment and repair may be required.

9

Homeowner’s Insurance

For a home with a mortgage, the buyer must purchase a homeowner’s insurance policy that typically covers the value of the property and satisfies any other requirements of the lender. The policy must be bound before closing and evidence of purchase must be presented at closing. Often, the policy will be paid at closing, unless the buyer has paid for the policy in advance.

10

The Closing

The closing is the final step in the process, and this is where we come in. At the closing, all legal documents are signed, including the security deed or mortgage, note, and the conveyance deed that transfers ownership to the buyer. The parties to the transaction are given a settlement statement and/or a Closing Disclosure, outlining the buyer’s and seller’s financial obligations related to the transaction. Depending on the terms of the contract, either the buyer or the seller may agree to pay certain closing costs related to the transaction.

Once your closing is complete, it’s official! The buyer receives the title to the property and the seller hands over the keys. We ensure all funds are promptly distributed to anyone owed payment from the transaction, including the seller, real estate agents, lenders, and any vendors. Our service doesn’t end there—we also guarantee that the appropriate documents are accurately and timely filed in the correct county courthouse. Once we receive the recorded documents from the courthouse, we mail them to you for safekeeping until the next time you have a closing with us.

Commercial Real Estate Closings in Georgia

1

Letter of Intent (LOI)

The buyer and seller negotiate and sign a Letter of Intent outlining the basic terms of the transaction. This document sets the stage for the detailed purchase and sale agreement.

2

Purchase and Sale Agreement

A comprehensive purchase and sale agreement is drafted and signed by both parties. This document outlines all terms and conditions of the sale.

3

Due Diligence Period

During this period, the buyer conducts a thorough investigation of the property, including physical inspections, environmental assessments, and reviewing financial statements. Title search and examination are performed to ensure there are no issues with the property's title.

4

Financing and Appraisal

The buyer secures financing, often obtaining a commercial mortgage. An appraisal is conducted to confirm the property's value and ensure it meets the lender's criteria.

5

Review of Leases and Contracts

If the property is leased, the buyer reviews all existing leases and contracts associated with the property to understand current obligations and income streams.

6

Environmental and Zoning Issues

Environmental assessments (Phase I and possibly Phase II) are conducted to check for contamination. Zoning laws and regulations are reviewed to ensure the intended use of the property is permissible.

7

Closing Documents Preparation

Closing documents, including the deed, bill of sale, assignment of leases, and mortgage documents, are prepared. The settlement statement is reviewed by both parties.

8

Closing Day

Both parties meet, typically at the closing attorney's office. Documents are signed, including the deed, loan documents, and other necessary paperwork. Funds are transferred, and the attorney records the deed with the county.

9

Post-Closing

The buyer takes possession of the property. The closing attorney ensures all documents are properly recorded and funds are disbursed to the appropriate parties. The buyer receives copies of all documents for future reference.

By understanding these steps and partnering with Edwards Law, you can navigate both residential and commercial real estate closing processes with confidence and ease. Contact us today to handle your next real estate closing and experience the difference of working with dedicated legal advisors.

The Closing Checklist

Here’s a list of actions to prepare for your closing and the items to bring with you.

1

Confirm when and where your closing is scheduled.

2

Prior to closing

The buyer and seller must complete their respective information forms, which we will send you through our secure portal. For our wiring instructions, you will login to our secure portal and download our wiring instructions. Due to fraud concerns, we highly recommend that you call our office to confirm our wiring instructions prior to sending any wire transfer. We are not responsible for any wire transfers you send to an incorrect bank account. Please wire your funds for closing at least one (1) day in advance of closing to avoid any delays. If there are any specific circumstances that you think our firm should be aware of, please let us know in advance.

3

At the closing

The buyer and seller must bring a valid, unexpired government issued photo identification, such as a driver’s license, military identification, or passport. We always recommend that the buyer bring a checkbook, just in case there are any additional funds needed for closing that do not exceed $500.00. Any additional required funds between $500.00 - $4,999.99 may be paid in the form of a cashier’s check or a wire transfer. Any additional required funds to closing in the amount of $5,000.00 or more must be paid in the form of a wire transfer. Please note that an Ach transfer is not a wire transfer and we do not accept Ach transfers. In addition, the Buyer or Seller may need to bring original, signed documents required for closing the transaction, such as a power of attorney, corporate resolution, or written consent.

4

After the closing

We will provide you with your title insurance policy and we will record the conveyance deed to you. If the property you are purchasing will be your primary residence, you should file for your Homestead Exemption with the county where the property is located. This will substantially reduce the amount of property taxes you must pay each year.