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Survey Deletion Coverage Q&A

What is Survey Deletion Coverage?

Survey Deletion Coverage is often also referred to as “Survey Deletion”, “Survey Amendment”, and “Survey Coverage.”  When survey deletion coverage is given in the title policy it offers Buyers protection for errors or omissions that may have been made by the surveyor and accepted by the title company by changing the language in the “standard exception” of the title policy to read “Shortages in Area” only.  The “standard survey exception” in a title commitment or policy (before being amended) reads:

“Any discrepancies, conflicts, or shortage in area or boundary lines, or any encroachments or protrusions, or any overlapping of improvements.”

 Upon receipt of an acceptable survey, the title company may amend this exception to read “Shortages in area” only.   Things that a title company will look at to determine if a survey will be acceptable include, but are not limited to, the following:  that items noted on the survey are listed in the title commitment, verify the legal description, check platted building lines and platted easements, and other matters such as the seal and signature of the engineer, date of the survey, and north directional arrow. 

Survey Deletion is addressed in paragraph 6. A. (8) of the TREC One to Four Family Residential Contract, where the parties select between the options of amending or not amending the standard exception in the title policy and who will be responsible for the payment of the premium.

There are other issues that may show up in the review of a survey, such as a building or driveway or fence over a building line, or into a platted easement.  When this happens, the title company may still accept the survey and amend the standard exception to read “Shortages in Area” only, but will generally add a special exception on Schedule B of the title commitment and owner’s title policy for any of these issues that were shown on the survey.              

The cost of survey deletion coverage on residential transactions is 5% of the Owners Title Policy Premium, and is 15% of the Owner Title Policy Premium in a commercial transaction.

For more information on Survey Deletion Coverage, download our Survey Deletion Coverage Q&A flyer 



The Closing Process

You finally found THE ONE and put in an offer that was accepted… now what? The process is just beginning for the behind the scenes team that make your dreams a reality and help get you into your new home. We’ve put together a comprehensive chart of the closing process that begins once you are under contract to help you better understand the whole process. You (the buyer), your REALTOR®, Mortgage & Title Companies have lots to do before you get to the closing table and get those keys in hand. Here’s a look at the process.

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Helpful Terms for Buying/Selling Your Home

Buying or selling a home is one of the most important undertakings of a lifetime. When buying or selling a home, there are many real estate terms that may be unfamiliar to you. Check out this list of commonly used terms that you may find helpful during the process.

AIR:  Adjustable Interest Rate

AMORTIZATION SCHEDULE: A schedule showing the principal and interest payments throughout the life of the loan.

APPRAISED VALUE: An opinion of the value of a property at a given time, based on facts regarding the location, improvements, etc. of the property and surroundings.

CD/CLOSING DISCLOSURE: This form is a statement of final loan terms and closing costs. Sometimes referred to as ICD or Integrated Closing Disclosure.

COMMITMENT:  The document by which a title insurer discloses to all parties connected with  a particular real estate transaction all the liens, defects, and burdens and obligations that affect the subject property.

CREDIT REPORT: A report on the past ability of a loan applicant to pay installment payments.

DOCUMENT PREPARATION FEE: A charge by an attorney for preparing legal documents for transaction.

ESCROW FEE: A fee charged by the title company to service the transaction, to escrow monies, and cover documents. Usually split between buyer and seller.

ESCROW ACCOUNT: Funds held by the lender for payment of taxes and insurance when due. Usually does not include maintenance fees.

HOA ASSESSMENT FEES: Charged by the homeowner’s association as set out in subdivision restrictions.

HOMEOWNER’S INSURANCE:  Protects the property and contents in case of loss; must be for at least the loan amount or for 80% of the value of the improvements, whichever is greater.

INSPECTIONS: An examination of property for various reasons such as termite inspections; to see if required repairs need to be made before funds are received, etc.

INTEREST: Money paid regularly at a particular rate for the use of money lent.

LOAN TITLE POLICY: Required by the lender to insure that the lender has a valid lien; does not protect the buyer.

ORIGINATION FEE:  A fee the buyer pays the lender to originate a new loan.

OWNER’S TITLE POLICY: Insures that the buyer has title to the property, that there are no other claims as to ownership. Among other matters, it also insures access to the property, the right to occupy the property, good and indefeasible title, and that there are not other types of specific liens against the property. 

POINT:  1% of the loan amount.

PREPAIDS: Items to be paid by the buyer in advance of the first scheduled payment of the loan (Homeowner’s Insurance Premium, Mortgage Insurance Premium, Prepaid Interest, Property Taxes and a maximum of three additional items).

PREPAYMENT PENALTY:  Charged by the lender for premature payment of a loan balance.

PRIVATE MORTGAGE INSURANCE: Insurance against a loss by a lender (mortgagee) in the event of default by a borrower (mortgagor).

REALTOR FEES:  An amount paid to the REALTOR® as compensation for their services. RECORDING FEES: Charged by the County Clerk to record documents in the public records. RESPA:  Real Estate Settlement Procedures Act.

RESTRICTIONS: Certain limitations or conditions related to the future use of the property put on the property by a prior owner. These restrictions stay with the property until they expire or are amended as per certain procedures set forth in the restrictions.

SURVEY:  Confirms lot size and any encroachments or restriction violations.

TAX CERTIFICATES: Certificates issued by taxing authorities showing the current year’s taxes, the last year the taxes were paid, and any delinquencies to be collected at closing.

TAX PRORATION: Means that the payment of the taxes for the year of sale are divided between the Buyer and Seller, usually based on the amount of time the Seller owned the property during that year. Prorations, and how they are calculated, are typically addressed in the Contract of Sale.

TIL:  Truth in Lending.

TIP: Total Interest Percentage; the total amount of interest the borrower will pay over the loan term as a percentage of the loan amount.

TOTAL OF PAYMENTS: Total amount paid after all payments of principal, interest, mortgage insurance and loan costs are scheduled. 

To download our Helpful Terms for Buying/Selling Your Home flyer,  visit Helpful Terms for Buying and Selling Your Home.

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Republic Title Announces ALTA Best Practices Recertification

Republic Title of Texas, Inc. is proud to announce our completion of HA&W’s ComplianceSuccess® Program which certifies compliance with American Land Title Association (ALTA) Best Practices. ALTA’s Best Practices Framework includes:

1.      Licensing: Establish and maintain current License(s) as required to conduct the business of title insurance and settlement services

2.      Escrow Trust Accounting: Adopt and maintain appropriate written procedures and controls for Escrow Trust Accounts allowing for electronic verification of reconciliation.

3.      Protecting NPI: Adopt and maintain a written privacy and information security program to protect Non-public Personal Information as required by local, state and federal law.

4.      Settlement Processes: Adopt standard real estate settlement procedures and policies that help ensure compliance with Federal and State Consumer Financial Laws as applicable to the Settlement process.

5.      Policy Production: Adopt and maintain written procedures related to title policy production, delivery, reporting and premium remittance.

6.       Insurance Coverage: Maintain appropriate professional liability insurance and fidelity coverage.

7.      Consumer Complaints: Adopt and maintain written procedures for resolving consumer complaints.

For more information on ALTA’s Best Practices Framework and why it is important to do business with a company that implements these standards, visit www.alta.org/best-practices

Homestead Exemptions and What You Need to Know

What Are Exemptions?

Exemptions are a form of tax relief that can reduce the taxable value of your property. Here are 4 things you should know about them:

1. There are several kinds of exemptions that you might qualify for. They are:

  • Homestead Exemption
  • Disabled Individual Exemption
  • Agricultural Land Exemption
  • Disabled Veteran Exemption
  • Over 65 Exemption

2. In order to qualify for a residential homestead exemption, you must be occupying the property as your homestead on January 1st of the tax year in which the exemption is granted. Your application must be filed no later than April 30th to receive the tax benefit for this year.

3. It is important to note that when you apply for exemptions, you need to be sure that you have a Texas Driver’s License or Texas ID card and the address on it matches the address of the property on the application, otherwise the Chief Appraiser is prohibited from approving exemptions.

4. It is your responsibility as the homeowner to apply for exemptions. You can do this free and easily on your county’s central appraisal district (CAD) website. If the Central Appraisal District sends you correspondences regarding your exemptions, be sure to respond timely, but do not be fooled by imposters trying to get your money by filing on your behalf.

For contact information to your local central appraisal district, click here

*Republic Title of Texas, Inc. makes no express or implied warranty respecting the information presented and assumes no responsibility for errors or omissions.

 

 

 

 

 

Man sitting in home office, reading letter and felling worried. With one hand holding letter and with other his forehead

What a Government Shutdown Means for REALTORS®

Do you know how the government shutdown will affect you, the agent?  NAR posted this great article that summarizes the impact that the shoutdown will have on real estate transactions.

(As of January 4, 2019)

As of midnight on December 21, 2018, the President and Congress were unable to agree on the provisions of a Continuing Resolution (CR) to fund the federal government. As a result, a partial shutdown of some government operations has occurred. This partial shutdown includes some federal housing, mortgage, and other programs of interest to the real estate industry. A summary of the impact on selected agencies is provided below.

While this is a very politically dynamic event, NAR staff continue to monitor federal agencies and work with Congress, the Administration, and other groups to assess ongoing impacts to NAR members and their businesses.

 

Environmental Protection Agency

Under EPA’s shutdown plan(link is external), most employees are now furloughed. This will affect various regulatory programs and compliance activities, such as wetlands determinations under the 404 program and enforcement of the lead-based paint disclosure and renovation, repair and painting programs.

 

Federal Housing Administration

HUD’s Contingency Plan states that FHA will endorse new loans in the Single Family Mortgage Loan Program except for HECM loans. It will not make new commitments in the Multi-family Program during the shutdown. FHA will maintain operational activities including paying claims and collecting premiums. FHA Contractors managing the REO/HUD Homes portfolio can continue to operate. Some delays with FHA processing may occur due to short staffing. Read more about these delays(link is external).

 

Government Sponsored Enterprises (GSEs)

During previous shutdowns, Fannie Mae and Freddie Mac have continued normal operations since they are not reliant on appropriated funds. On December 26th both GSEs updated or clarified their loan purchase requirements in case of a shutdown. Freddie Mac requires all borrowers to sign a 4506T request form prior to close, but the request does not have to be processed prior to close. Fannie Mae requires the same unless the borrower’s income can be verified though Fannie Mae’s proprietary Desktop Underwriter verification system in which case no 4506T is required.

 

Internal Revenue Service

The IRS will close and suspend the processing of all forms, including requests for tax return transcripts (Form 4506T). While FHA and VA do not require these transcripts, they are required by many lenders for many kinds of loans, including FHA and VA. Delays can be expected if the shutdown continues. Some loan originators may adopt revised policies during the shutdown, such as allowing for processing and closings with income verification to follow, as long as the borrower has signed a Form 4506T requesting IRS tax transcripts. On loans requiring a Form 4506T, see the GSE section above for additional details.

 

National Flood Insurance Program (NFIP)

After NFIP operations were initially suspended over questions raised by government attorneys, NAR worked with the White House and Congress to clarify that the government shutdown does not affect the sale or renewal of flood insurance policies or the payment of claims on existing policies. Disaster relief, airport screenings and other essential homeland security functions are unaffected. View the FEMA release(link is external) resuming the full and normal operations of the NFIP.

 

Rural Housing Programs

The U.S. Department of Agriculture will not issue new rural housing Direct Loans or Guaranteed Loans. Scheduled closings of Direct Loans will not occur. Scheduled closings of Guaranteed Loans without the guarantee previously issued will be closed at the lender’s own risk.

 

Visa Programs – EB-5 and H-2B

Until the shutdown ends and the Regional Center EB-5 program extension is signed into law, the EB-5 Immigrant Investor Regional Center Program is suspended and no new I-526 petitions can be filed. Investors must continue to file timely responses to USCIS Requests for Evidence (RFE) and Notices of Intent to Deny (NOID). In addition, investors may continue to prepare and file I-829 petitions.

While the Department of Labor was funded for 2019, the Department of Homeland Security was not. Therefore, while the H-2B Temporary Worker Visa program is still operational for workers currently in the U.S., the DHS is unable to approve any new or returning workers under an H-2B visa.  

Source: National Association of Realtors – www.nar.realtor

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Tips for Winterizing your Home

Winter is coming! See below for a list of top tips for winterizing your home.

CHECK THE EXTERIOR, DOORS AND WINDOWS

  • Inspect exterior for crevice cracks and exposed entry points around pipes, seal them.
  • Use weather stripping around doors to prevent cold air from entering the home and caulk windows.
  • Replace cracked glass in windows and, if you end up replacing the entire window, prime and paint exposed wood.

CHECK FOUNDATIONS

  • Rake away all debris and edible vegetation from the foundation.
  • Seal up entry points to keep small animals from crawling under the house.
  • Tuckpoint or seal foundation cracks. Mice can slip through space as thin as a dime.
  • Inspect sill plates for dry rot or pest infestation.
  • Secure crawlspace entrances.

INSTALL SMOKE AND CARBON MONOXIDE DETECTORS

  • Some cities require a smoke detector in every room.
  • Buy extra batteries and change them when daylight savings ends.
  • Install a carbon monoxide detector near your furnace and/or water heater.
  • Test smoke and carbon monoxide detectors to make sure they work.
  • Buy a fire extinguisher or replace your existing one if it is older than 10 years.

PREVENT PLUMBING FREEZES

  • Locate your water main in the event you need to shut it off in an emergency.
  • Drain all garden hoses.
  • Insulate exposed plumbing pipes.
  • Drain air conditioner pipes and, if your Acceptable has a water shut-off valve, turn it off.
  • If you do go on vacation, leave the heat on, set to at least 55 degrees.

PREPARE LANDSCAPING & OUTDOOR SURFACES

  • Trim trees if branches hang too close to the house or electrical wires.
  • Ask a gardener when your trees should be pruned to prevent winter injury.
  • Plant spring flower bulbs and lift bulbs that cannot winter over such as dahlias in areas where the ground freezes.
  • Seal driveways, brick patios and wood decks.
  • Move sensitive potted plants indoors or to a sheltered area.

GET THE FIREPLACE READY

  • Cap or screen the top of the chimney to keep out rodents and birds.
  • If the chimney hasn’t been cleaned for a while, call a chimney sweep to remove soot and creosote.
  • Buy firewood or chop wood. Store it in a dry place away from the exterior of your home.
  • Inspect the fireplace damper for proper opening and closing.
  • Check the mortar between bricks and tuckpoint, if necessary.
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What Every Realtor® Should Know About Owner’s Title Insurance

Make sure all of your clients are protected

You’re a real estate agent, so you know that buying a home can be overwhelming for many of your clients. Homebuyers can easily feel confused and frustrated by the mounds of paperwork they have to sign. Plus, all the fees associated with closing can sometimes be a surprise even to an experienced buyer.

Owner’s title insurance is one of those items often misunderstood by homebuyers at closing, yet its value is tremendous.  As an important advisor to your clients, you are in the position to help them understand the value of owner’s title insurance and the dangers that can be incurred without it.

What is title insurance?

Owner’s title insurance is a policy that protects homebuyers’ property rights. For the same reasons that the bank requires a lender’s insurance policy, a homebuyer obtains owner’s title insurance to protect their legal claims to the property.

How it protects your clients

Say, for example, your client recently purchased a new home from a builder, but the builder failed to pay the roofer. Wanting to be paid, the roofer filed a lien against the property. Without owner’s title insurance, your client would be responsible for paying this existing debt—meaning they’d be paying the roofer out of pocket instead of purchasing something nice for their new home, like new living room furniture. This is just one example of how owner’s title insurance protects homebuyers’ from various significant risks. With owner’s title insurance, your client would be protected from certain legal or financial responsibilities.

Enduring value

The good news is that owner’s title insurance protects homebuyers financially, as long as they or their heirs* own the home. For a low, one-time fee, homebuyers can rest assured, knowing they are protected from inheriting existing debts or claims to their property.

 

*This advertising offers a brief description of insurance coverages, products and services and is meant for informational purposes only.