• 1. What is closing?
    Closing (also called settlement) is the legal transfer of property ownership. Usually, but not always, possession is transferred at closing. Sometimes the seller may ask to close the sale but retain possession, and pay rent to the buyer until vacating the property at a later date.
  • 2. What happens at closing?
    You’ll sign many documents. Rely on your buyer’s rep and your attorney to review these documents and answer any questions you may have. Frequently-used documents include: Closing Disclosure statement - details all funds changing hands between the buyer and seller Truth in Lending statement - a final summary of the terms of your loan Mortgage note - a legal obligation to repay the lender according to stated terms Deed of trust - the legal transfer of ownership; gives the lender a claim against your home if you fail to meet the terms of the mortgage note Affidavits - any binding statements by the buyer or seller Riders - any contract amendments that impact your rights Any additional documents required in your state Once all documents are signed and all monies have been paid, possession is transferred and you receive the keys to your new home. Be sure to keep your closing documents in a safe place for future reference. Some of the expenses associated with your home purchase are tax-deductible.
  • 3. What is a Deed of Trust?
    A Deed of Trust is a type of secured real-estate transaction that some states use instead of mortgages. See State Property Statutes. A deed of trust involves three parties: a lender, a borrower, and a trustee. The lender gives the borrower money. In exchange, the borrower gives the lender one or more promissory notes. As security for the promissory notes, the borrower transfers a real property interest to a third-party trustee. Should the borrower default on the terms of her loan, the trustee may take full control of the property to correct the borrower's default. Usually, the trustee is a title company. In most states, the borrower actually transfers legal title to the trustee, who holds the property in trust for the use and benefit of the borrower. In other states, the trustee merely holds a lien on the property. See Estates and Trusts. Deeds of trust almost always include a power-of-sale clause, which allows the trustee to conduct a non-judicial foreclosure - that is, sell the property without first getting a court order. See Foreclosure. For example, in a typical home loan, the borrower is the person buying the home, the lender is a bank, and the trustee is a title company. The borrower makes monthly payments to the bank. If the borrower goes into default, the title company initiates a non-judicial foreclosure as the bank's agent.
  • 4. What is a Deed?
    A property deed is a legal document that transfers property ownership from a seller/grantor to a buyer/grantee. A deed contains a description of the property (including property lines) and denotes the seller/grantor and the buyer/grantee. Both parties must sign the document to make it official.
  • 5. What is a Special Warranty Deed?
    A special warranty deed is similar to a general warranty deed, but only guarantees title for the time the property was owned by the seller. This type of deed is not typically used for home purchases, but rather for purchase of commercial property.
  • 1. What is a Quitclaim Deed?
    A quitclaim deed can be one of the simplest methods of transferring a property to a new owner. In other words, the property owner (also known as the grantor) can offer this type of deed and transfer the entire interest in the property to the recipient, or the grantee. Generally, no money is involved in this transaction, there’s no need for title insurance and no title search is conducted to verify the property owner. Whereas a general or even a special warranty deed offers some protection for the grantee, the quitclaim deed offers the property “as-is.” What this means is that there aren’t any warranties such as claims that the title is free and clear of restrictions or liens.
  • 2. What is a General Warranty Deed?
    A real estate buyer is best protected by a General Warranty Deed. The seller or grantor conveys the property with certain covenants or warranties. The grantor is legally bound by these warranties. Whether expressly written into the deed, or implied by certain statutory words, basic warranties include: Covenant of seisin-Seisin means possession, and the grantor warrants that they own the property and have the legal right to convey it. Covenant against encumbrances-The Grantor warrants that the property is free of any liens or encumbrances unless they're specifically stated in the deed. Covenant of quiet enjoyment-The buyer is guaranteed that the title will be good against third parties attempting to establish title to the property. Covenant of further assurance- The Grantor promises, in order to make the title good, they will deliver any document or instrument necessary. The covenants or warranties in a general warranty deed do not cover just the period of ownership of this grantor. They extend back to the origin of the property. Each grantor of a general warranty deed in the title chain would be liable for title problems, which would likely show up in an abstract of title, before and through their ownership.
  • 3. What is Tenancy by the Entirety?
    A tenancy by the entirety (TBE) is an option that's available to married couples in some states. It's only available to spouses and, in some jurisdictions, to domestic partners. The deed will fail if a person tries to enter into such an ownership arrangement with someone to whom they are not married, or if their state doesn't recognize this provision for registered domestic partnerships and you want to hold title to property in this way with your partner. Each spouse individually owns the entire property, and they have joint control over it as tenants by the entirety. The spouses are treated as a single legal entity.
  • 4. What is Tenancy in Common?
    Tenancy in common (also known as TIC and tenant in common, and co-tenancy) refers to arrangements under which two or more people co-own a parcel of real estate without a “right of survivorship”. This type of co-ownership allows each co-owner to choose who will inherit her ownership interest upon death. By contrast, the type of co-ownership called joint tenancy requires that each co-owner’s interest pass to the other co-owners upon death.
  • 5. What is Joint Tenancy?
    Joint tenancy is a type of property ownership arrangement where two or more people own an equal interest in the property at the same time. Joint tenancy with rights of survivorship - also known as JTWROS in industry parlance - is a specific type of joint tenancy where, when one property owner passes away, his or her ownership interest in the property is automatically transferred to the surviving co-owner. Joint tenancy differs from other forms of asset ownership, like tenancy in common. In the latter scenario, for example, each co-owner can own a different percentage of interest in the property. Each co-owner is also entitled to a beneficiary designation of who will take over his or her interest in the property. With the former, each tenant has an equal interest in the property and, usually, the surviving joint tenant automatically inherits ownership rights to the entire property upon the deceased joint tenant's death.