Why Is a Title Search Important?

A title search is a very thorough investigation into the ownership history of a given property. It is a process performed to examine the chain of ownership and proper transfer of title from one party to the next and the current homeowner’s legal rights to sell the property. A title search investigates for title defects or circumstances that may prevent the legal transfer from the seller to the buyer.

Integral to a real estate transaction (in most cases), a title search is an important part of the closing process and can help protect the buyer when purchasing a new home. We have put together some of the most frequently asked questions about the title search process to help further explain the relevance of this essential step.

Who conducts a title search?

A property title search is generally performed by a title agent or representative of the company or attorney conducting the real estate closing. These professionals are trained to identify title defects and access the appropriate resources to research the chain of ownership surrounding a real estate property.

When does a title search take place?

Title searches are typically performed shortly after the real estate contract is ratified. In most instances, a title search must be completed before the lender will approve the home loan. Along with protecting the buyer, this process helps safeguard the lender’s interest against risks associated with title defects.

What does a title search include?

A property title search includes an examination of public records, screening for information on deeds and any judgments, liens, boundary disputes, improperly probated wills, bankruptcy, and more. Title agents also review the mortgage history, tax payments, and other legalities surrounding the property. Any encumbrances identified during a title search are classified as title defects.

How long does a title search take?

On average, a thorough title search takes about five days to complete. This timeframe, however, may be impacted by the age of the home. Titles for older homes may take longer to investigate since they are more likely to have had multiple owners while those for newer properties may not require as much time to research.

What happens when title defects are found?

Title defects must be resolved before the home closing can occur. Some title defects can simply be resolved by submitting the correct or updated information to the public records office or appropriate entity. Other defects may be more complex and entail resolution in a court of law.

A title search confirms a seller’s legal right to sell a property free and clear and is a crucial step in a home closing. To learn more about title searches or the closing process in general, please contact Linear Title & Escrow in Virginia Beach, VA.

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How Are Closing Costs Calculated?

Closing costs are the fees paid when closing on a real estate sale or refinance transaction. Remitted at the time of settlement, these costs are those associated with the buying or selling of a home and exist outside of the down payment. Whether you’re a first-time or seasoned home buyer, it’s important to know what your closing costs will be when making your real estate purchase. Read on to learn what fees are included in closing costs and how those fees are determined.

What do closing costs include?

Both home buyers and sellers can expect to pay settlement costs at the close of the real estate transaction (when the property is officially and legally conveyed from the seller to the buyer). The details surrounding closing costs for both parties are contained within the Closing Disclosure (CD) form, a document remitted to the seller and buyer three business days prior to the closing date.

Buyer closing costs generally include:

-Loan origination fee (if applicable)

-Credit report review

-Home appraisal 

-Pre-paid mortgage interest (discount points)

-Private mortgage insurance (PMI) (if applicable)

-Homeowner’s insurance

-Recording fees

-Underwriting fees

-Courier fee

-Transfer taxes

-Title search and closing fee

-Title insurance

-Land survey (optional)

-Flood determination and elevation certificate (if applicable)

-HOA dues (if applicable)

Seller closing costs typically involve:

-Mortgage pay-off amount

-Property taxes

-Deed preparation

-Grantor’s tax

-Hampton Roads Regional Transit (HRRT) fee (if applicable)

-Settlement/Closing coordination fee

-Notary fee (if applicable)

-Home repairs/invoices (if applicable)

-Termite inspection (if, per contract, the seller is to pay)

-Home warranty (if applicable)

-Prorated HOA fees (if applicable)

-Prorated real estate taxes

-Prorated stormwater fees (if applicable)

-Real estate commissions

How are closing costs determined?

In general, closing costs for home buyers range between 3 – 6 % of the sale price of the home and may be affected by the sale price of the property, the geographic location of the home, and the home buyer’s credit standing, among other factors. These expenses may also vary based on the type of mortgage product selected and according to state or municipality.

Closing costs for sellers generally fall between 5 – 10 % of the sale price of the home, the largest of which is often the commissions paid to the real estate agents. Any remaining mortgage expense is paid alongside other seller closing costs. Seller expenses may also vary according to state or municipality.

Can closing costs be negotiated?

In some instances, home buyers and sellers may negotiate the terms of the real estate contract to include seller assists or concessions, which is where the seller contributes a specific amount towards closing expenses on behalf of the buyer. The total amount of contributable seller concessions allowed, however, may be dictated by the type of mortgage product for which the buyer has applied.

Do you have other questions about closing costs or the settlement process? Reach out to Linear Title & Escrow in Virginia Beach, VA today!

What Are the Steps in the Closing Process?

Knowing what to expect as you embark upon buying a new home can help ensure you are fully prepared when it is time to close. On average, it takes approximately 30 – 45 days to complete the settlement process, from start to finish. Here is a general overview of the main steps involved when buying and closing on a home.

Loan Pre-Approval

The first step in the home buying and closing process is to have a home loan pre-approved by a reputable mortgage lender. Ensuring the submission of the necessary documents and information required for loan approval in a timely manner is crucial to keeping the closing timeline on track and as short as possible.

Contract Ratification

Once the terms of the sale have been agreed upon by both the buyer and the seller and the real estate contract has been signed, it is considered to be “ratified.” It serves as a legally binding agreement and will typically include pertinent information, such as the purchase price and estimated closing date.

Title Search

Following contract ratification, a title search will be conducted by a title agent. A title search is a thorough investigation of the ownership history of the property and is performed to identify any title defects. A title defect is a legal circumstance that prevents the proper transfer of ownership from the seller to the buyer. Title defects must be resolved in order for the real estate sale to take place.

Clear to Close

A “clear to close” status indicates that the lender has fully approved the home loan and that all necessary conditions and documentation requirements for the transaction have been met. At this stage, a closing date and time will be confirmed by the title company conducting the settlement.

Closing Day

Closing day is the final step in the real estate transaction. Buyers and sellers each have their own separate closings, during which the final loan documents and other relevant paperwork are signed and notarized. Once closing is complete, the buyer is legally the new owner of the property.

If you are seeking a title company in Virginia Beach, VA, we invite you to contact Linear Title and Escrow. Our seasoned team can help you understand the steps involved in the closing process and enjoy the best possible settlement experience.

How Are Title Defects Resolved?

Title defects are factors relating to a real estate property that prevent a clear and free transfer of ownership from one party to the next. Also referred to as “clouds on title,” such defects can interfere with a homeowner’s ability to sell their property or may give rise to the need to defend their property against others who retain ownership rights. Any title defects that are identified must be addressed and corrected before the property can be legally and properly sold and transferred.

How Are Title Defects Found?

Title defects are generally identified during a title search. This investigative process is conducted during the time between contract ratification and the closing proceedings. A title search involves a very thorough, detailed evaluation of the property’s chain of ownership history and usually begins by reviewing public records. The title examiner searches for judgments, liens, unpaid taxes, and any other encumbrance that could prevent the sale of the property and legal transfer of ownership.

What Are Some of the More Common Types of Title Defects?

There are a wide variety of factors that can render the title of a property defective. Some of the most common title defects include:

– Forgery

– Fraud

– Impersonations

– Improperly probated wills

– Property liens

– Judgments

– Boundary disputes

– Encroachments or easements

– Recording errors

– Unreleased deeds of trust

– Unidentified heirs

How Are Title Defects Cleared?

The title defect resolution process is dependent upon the type of problem at hand. Once a defect is found, the examiner conducts title rectification procedures to resolve the issue. Some types of defects can be resolved relatively quickly and simply involve submitting the correct information to the public records office (such as for clerical or recording errors).

With other issues, such as unreleased deeds of trust, the title company may need to contact the previous lien holder (mortgage lender) to initiate the title resolution process. Liens, unpaid taxes, judgments, and other debt-related defects must be paid in full and the receipt of payment recorded to clear these types of title problems. Undisclosed heirs, boundary disputes, improperly probated wills, and other complex forms of defects may require legal action or need to be resolved in a court of law.

Can I Protect My New Home Against Title Defects?

Title examiners are trained to conduct thorough title searches and detect clouds on title. Even with a comprehensive investigation, however, there may still be undiscovered defects that surface months or even years post-closing. Homebuyers can purchase an owner’s title insurance policy at the time of closing to help safeguard against title defects. This type of indemnity policy can help protect against loss of property or financial loss should a defect arise or if another party proves to have ownership rights to the property. Owner’s title insurance can also help cover legal fees in the event such action is necessary to clear clouds on title.

Learn More About Title Defects

Defects can render the title of a home unmarketable and may even threaten the real estate sale. If you have further questions about clearing title defects, Linear Title & Escrow can help.  Please contact our title company in Virginia Beach, VA today to learn more.

What Does a Title Company Do?

Whether you’re a buyer or a seller, closing on a home is a momentous life event. In many instances, the closing (or settlement process) for the real estate sale is conducted by a title agent or representative of a title company. Read on as we provide a general overview of the title company’s role in a real estate transaction.

About title companies

Title companies are business organizations that conduct home closings on both sides of the real estate transaction. A home closing is the process of transferring ownership of a property from the seller to the buyer and finalizing the home loan (mortgage) paperwork. Unless handled by a real estate attorney, closings are conducted by a title agent, often onsite at the title company office.

Title companies serve as neutral third parties to facilitate the closing process between buyers, sellers, mortgage lenders, realtors, and other professionals. From conducting title searches to issuing title insurance policies, title companies are an integral part of the real estate sale.

What is a title search?

A title search is the process of reviewing the ownership chain of a given property to determine if any title defects exist. Title defects are issues or problems with the title of a property that could interfere with an owner’s right to sell the property free and clear. A title search should involve the thorough examination of public records, screening for judgments, liens, recording errors, unpaid taxes, encumbrances, and a variety of other factors. Title defects discovered during the process of a title search (generally) must be resolved before closing can occur.

What is title insurance?

Title insurance is a type of policy designed to protect homebuyers and lenders against financial loss from title defects should any be identified after closing has occurred. There are two types of title insurance policies: an owner’s title insurance policy (which protects the homeowner) and a lender’s policy (which protects the mortgage lender). Visit our title insurance page to learn more about these indemnity policies.

Can I choose the title company for my home closing?

The ability to choose a title company can vary among states. In Virginia, however, the buyer has the right to choose the title company for their home closing.

Finding the right title insurance company for your closing can contribute to a positive settlement experience. If you are searching for a title company in Virginia Beach, VA to handle your home closing, our team at Linear Title & Escrow can help. Please contact us today to learn more.

Home Closing FAQ

Buying a home is a milestone in life, whether it’s the first property you’ve ever purchased or one of several. Knowing what to expect when it’s time to close on your home loan and take ownership of your new abode can be very helpful as you navigate the home buying process. Read on to discover some of the most frequently asked questions about closing on a real estate transaction.

What does “closing on a home” mean?

For home buyers, “closing” on a home means signing documents to finalize the home loan (or mortgage) and the transfer of ownership (title) of the property. For sellers, “closing” means to transfer the legal and ownership rights of a property to the buyer.

Where will the closing take place?

Home closings often take place in the office of a title company or a real estate attorney. They may also be conducted in the mortgage lender’s office or another location designated for convenience.

Do buyers and sellers have to be present at a home closing?

It’s important to understand that essentially two closings take place during a real estate transaction: one is for the buyer and a separate closing for the seller. While it’s common for the home buyer to attend the closing, it is not required. All states allow for closings to be conducted via power of attorney for both buyers and sellers.

As a home buyer, can I choose the title company for my closing?

Yes. Buyers have the right to choose the title company that conducts their closing transaction.

What do I need to bring on closing day?

Your title agent will inform you of the exact items you will need in order to close. These generally include:

-A government-issued photo ID

-A cashier’s check in the exact dollar amount of monies due

-Documentation indicating proof of homeowner’s insurance

-Closing Disclosure (CD) form (This is a form sent by the lender to the buyer at least three business days prior to closing. It contains all the details of the loan and the buyer’s financial responsibility pertaining to the sale.)

How long does the closing process take?

From contract to settlement, the entire closing process takes (on average) about 45 days. While there isn’t really an average time attached to the actual closing itself, as this can vary according to individual buyers, home closings typically take a minimum of an hour.

Do you have other questions about the closing process? We can help! To learn more, contact the experienced team at Linear Title & Escrow today.

Title Terms to Know

The title process is integral to a real estate transaction. As such, it can be helpful to have an understanding of certain title terms, whether you are new to the home buying experience or a seasoned pro. Read on to learn some of the most common title terms to help you along your way.

Title: Refers to the ownership rights associated with a piece of real estate.

Title search: The process of reviewing the ownership history of a property to identify title defects.

Title defect: Existing judgments, liens, encumbrances, or other legal factors that could cause a title to be “unmarketable.” Without resolution, title defects could prevent a homebuyer from the full legal scope of ownership rights surrounding a property.

Title agent: A professional who carries out a title search and/or closing procedures.

Escrow: A financial arrangement managed by a neutral third party that temporarily holds and transfers real estate funds throughout the settlement process.

Lender’s title insurance: An insurance policy that protects the lender’s interest in the event a mortgage/home loan becomes unenforceable.

Owner’s title insurance: An insurance policy that protects a homeowner’s financial interest in their property should certain title defects be discovered after closing.

Closing: The settlement process of transferring ownership rights of a property from one party to another.

Closing costs: Fees paid by homebuyers and sellers during the settlement process to finalize the real estate transaction.

Deed: A legal document that represents the transfer of title (ownership) of a property from a seller(s) to a buyer(s).

Conveyance: The transfer of a property’s title from one party to another.

Encumbrance: A limitation or other factor (such as a lien or easement) restricting or otherwise impacting how a property owner can utilize said property.

For more information or to learn more about the title terms listed above, please contact the team at Linear Title & Escrow.

What Are the Benefits of Owner’s Title Insurance?

Purchasing a home is an exciting life event. It is also one that involves a significant financial investment. As such, most people purchase a homeowner’s policy to protect against damage to the dwelling’s structure or that which may occur from natural disasters, fires, or other events. But what a homeowner’s policy does not cover are intangible threats to the property, such as unpaid liens, boundary disputes, or other title defects that may arise after closing on the home loan.

Owner’s title insurance is an indemnity policy that helps protect a homeowner’s financial interest in the event title issues are discovered after closing. Purchasing an owner’s policy is optional but strongly recommended. Read on to learn some of the key benefits of owner’s title insurance.

How does owner’s title insurance work?

During the settlement process, a title search is conducted to identify any title defects, which are essentially ownership or financial claims another party may have over the property in question. While the goal of a title search is to detect any defects, there are times when undiscovered title issues surface months or years after the property is purchased. Such instances could lead to financial loss, legal fees, and even the loss of the property. An owner’s policy can help mitigate these risks and help protect the homeowner from sustaining a significant financial loss.

Why purchase owner’s title insurance?

Having an owner’s title insurance policy in place can offer the homeowner a number of key benefits should title defects arise after settlement. Some of the key benefits of title insurance include:

Protect against financial loss: Should another party prove to have a legitimate claim on a homeowner’s property, an owner’s policy would reimburse the financial loss for covered title defects up to the policy amount.

Help cover legal fees: At times, it may be necessary for a homeowner to defend their rights to their property in a court of law. Owner’s insurance can help cover court costs and additional legal expenses.

Provide peace of mind: For a homeowner, knowing that a policy is in place to help against financial loss from potential title defects can bring peace of mind to the home buying process.

How long does an owner’s policy last?

An owner’s title insurance policy will remain in effect as long as the homeowner or their heirs own the property, even if the loan is refinanced at some point. It is important to understand that an owner’s title insurance policy will only apply to title defects discovered after the loan has closed on the property in question, or only those impacting the ownership chain before the homeowner took possession.

Even when the title of a property is rendered free and clear following a title search, this is still the risk that title defects could be identified months or years after closing. To learn more about protecting your homeownership interests with an owner’s title insurance policy, please contact Linear Title & Escrow today.

Title Insurance FAQ

If you are in the process of buying a home, the term “title insurance” is one you’re likely to hear. To help provide a general understanding of what title insurance means and how it may impact your real estate investment, we’ve compiled some of the most common questions about these types of insurance policies.

Are there different types of title insurance?

There are two general types of title insurance: lender’s title insurance and owner’s title insurance. A lender’s policy protects the mortgage lender’s interest for the remaining dollar amount should the home loan become unenforceable at any point over the repayment period. An owner’s policy protects the homeowner against financial loss up to the amount of the real estate transaction should title defects arise or another party proves to have a legitimate ownership claim to the property.

Do I have to purchase title insurance?

Most mortgage lenders require homebuyers to purchase a lender’s title insurance policy. Buying an owner’s policy is entirely optional but is highly recommended, given the risks undiscovered title defects might pose to a homeowner’s property.

How much does title insurance cost?

The cost of lender’s and owner’s title insurance policies is based on the sales price and loan amount for a new purchase and the loan amount for a home loan refinance. The cost of an owner’s title insurance premium is calculated as a percentage of the purchase price of the home and corresponds with the value of the property. The cost of a lender’s policy will vary by state and/or other factors but generally averages between $500 – $2,000.

What does title insurance protect against?

Title insurance helps remunerate a homeowner or lender for financial loss in the event certain title defects are discovered after closing and such defects allow another party to have a proven and legal ownership stake. Owner’s policies may also cover all or part of legal costs should a homeowner be required to seek legal action to defend against title defects. Some of the most common title defects include:

-Undiscovered heirs

-Forgery or fraud

-Improperly probated wills

-Recording/clerical errors

-Unpaid mortgages

-Liens

-Judgments

Are title insurance policies transferable?

Owner’s and lender’s title insurance policies will remain in effect until you or your heirs sell the property or transfer ownership to another party. During a refinance, the lender will typically require the purchase of a new lender’s policy, but a re-issue rate will be established. An original owner’s insurance policy will still be in effect following the refinancing of a mortgage.

How can I purchase title insurance?

Payment for title insurance is provided as a one-time premium at the time of the real estate sale and is included in overall closing costs. 

Have other questions about title insurance policies? The Linear Title & Escrow team is ready to assist. Please contact us today for more information.

What Does a Title Search Include?

The term “title” in real estate represents the ownership rights attached to a property. It also entails the right to utilize or maintain an equitable interest in said property. When a real estate sale occurs, the title is transferred from the seller(s) to the buyer(s). For the legal transfer to be carried out, the title must be free and clear of any defects.

What is a title defect?

A title defect is any factor that prevents the proper transfer of property ownership from one party to the next. Title defects are generally identified through a title search. This investigative process takes place in the time between real estate contract ratification and the settlement (closing) of the loan. A title search seeks to identify any problems with the title as well as any other parties who may hold some ownership stake or legal rights to a property.

Who conducts a title search and how is it accomplished?

A title agent representing a title company or a real estate attorney are generally the professionals who carry out a title search. The person responsible for the title search will examine public records to screen for defects and review legal information pertaining to the property in question. This typically includes a search of municipal, county, or local tax collector records.

What does a title search look for?

A title search looks for any problem or issue (defect) that may prevent proper ownership transfer. Title defects can vary, but some of those most commonly discovered include:

-Liens or judgments

-Unpaid taxes

-Forgery or fraud

-Recording errors (in public records)

-Undisclosed heirs

-Easements or usage covenants

-Boundary disputes

-Improperly probated wills

What happens if title defects are found?

If a title defect is discovered, steps must be taken to resolve the issue in order for the real estate transaction and closing to proceed. In some instances, such as when recording errors are identified, resolving the defect is simply a matter of resubmitting the correct documentation to the appropriate office of public record. More complex types of title defects may require legal proceedings and may need to be resolved in a court of law.

A title search is integral to a real estate sale and a successful transaction. To learn more about the title search process or title defect resolution, please contact the experts at Linear Title & Escrow.