Feb 14, 2018

Deed vs Title

Deeds and titles go together like love and marriage. But like love and marriage, they aren’t the same thing.
A deed is not a title and a title is not a deed.
Though they seem alike, deeds and titles serve different purposes. And in the real estate world, the references to them can be confusing.

What is a Deed?

When you buy or sell a home, one of the documents that you sign at closing is the deed for your property. A deed is used specifically for the transfer of real estate. It sets forth your right to claim ownership of the property. A deed must always be in writing, correctly executed, and recorded in land records. The deed lists the address, legal description, the parties transferring the property, etc. The deed may also contain items like the sales price, restrictions regarding use of the property, etc.
There are several different types of deeds and each relates to something specific regarding use of a property and in establishing legal ownership of a property. A few different types of deeds include:
A General Warranty Deed is where the seller warrants that the title is free and clear of any encumbrances and that they have the right to transfer title. With a Special Warranty Deed, the seller warrants that the title is free and clear only for the time that the seller has had the title.
A Deed of Trust typically references a mortgage. This document allows the lender or lienholder remedies if the borrower defaults in their payments to the lienholder. Despite the use of the word “deed,” this is not proof of clear ownership or title. Basically, this deed often contains a clause that gives the trustee (your lender) the right to act (foreclosure) if you default. Your lender still “holds the title” of your home until you’ve paid off your loan.
Deeds are used solely for the transfer of real estate. But it takes more than a deed with the new owner name to transfer a piece of real estate. Just because you received a deed, doesn’t mean the property is free and clear of other claims. It can be very complicated. For this process, most buyers and sellers use a title company as a third-party agent to convey both deed and title.

What is a Title?

Transferring title to real estate does not work in the same way as transferring title to an automobile. You can’t just hand a certificate of title over to a buyer, take their check and consider it transferred. While a deed tracks the legal ownership of the property, a certificate of title is the legal document that establishes full-and-clear rights to the property.
Generally, the certificate of title proves ownership of property. It will contain the property owner’s name and address, and identifying features of the property. In the most basic terms, a deed is required to change the ownership of a property. A “title” is a concept that describes who ultimately owns the property.
For example, when you pay off your mortgage, the lender files a release with either the court or a local authority where the property is located. After all liens and encumbrances are off a property, then the owner has ‘clear title.’ 
You can think of the title as the legal relationship between persons and property. It gives ownership rights that no one else can claim and it allows the owner to possess and dispose of the property. To make it even more complicated, there are a few different types of title. For example, tenancy is where each person on the title owns interest in the property. A tenant can sell only their interest in the property, but not the entire property.
If you want to know more details about deeds or titles, ask a real estate attorney or your favorite escrow officer. Both deeds and certificates of title provide some proof of ownership. Like love and marriage, they go hand in hand.   [where: 75230]

Feb 2, 2018

Texas homestead rights

We Texans cherish our homestead rights more than anyone. And we’ve got the state constitution to prove it.
Cue the old west music and picture Ma with a baby on her hip and Pa with his rifle at the door of their simple home. That must be what the Texas founding fathers had in mind when they enacted our state’s constitution and property code to help protect our citizens.

Texas homestead protection laws help prevent Texans from becoming homeless if they are in a financial bind. “Our history has valued the homestead concept,” says Britt Fair, president of Fair Texas Title. “It’s protected more heavily here and therefore your run of the mill debts can’t cause you to lose your homestead.”

Texas homestead rights were designed to keep creditors from taking your home and kick you to the curb. Unlike places like Pennsylvania or New Jersey, in Texas, standard creditors can’t seize your homestead. For example, if you owe money on a student loan, credit card, or similar debt, the company can’t force the sale of your home. Because Texans are fortunate to have one of the most protective homestead provisions in the country.

The definition of a Texas homestead and homestead rights are set out in the state constitution. Found in the Texas Constitution article XVI, section 50 and Property Code chapters 41 and 42 to be exact.
While the homestead has always been sacrosanct in Texas, there are exceptions. A mortgage holder or taxing authority may force the sale of a home. If you don’t pay your mortgage, your lender can foreclose and take back the property. You have to ‘pay to stay.’ The IRS is another exception. Uncle Sam can take your property to satisfy tax debt. Texas courts also don’t tend to give homestead protection to protect criminal conduct.

There are a whole bunch of legal restrictions, exemptions, and definitions, but basically a homestead is a primary residence owned and lived in by a family or single adult. You can only have one homestead entitled to be exempt from seizure by claims of creditors. Any transfer of a homestead property must be done by both spouses if you’re married.

The legal description of a homestead in Texas, and what makes it exempt from creditors, is long and detailed. For specifics and guidance on Texas homestead laws and rights, consult a real estate attorney, tax advisor, or someone who can offer legal advice (which is not me). Most of us won’t ever need the legal homestead protections granted to Texans, but we’re happy to have them just the same.

“As strong supporter of homeowner’s rights, and I’m proud that Texas recognizes the importance of a person’s homestead,” says Fair. The folks at home on the range would agree.
[where: 75230]

Jan 15, 2018

Texas Title Insurance Rates

Closing costs are expensive when selling a property. Fortunately, they are deducted from the seller’s proceeds at the time of the sale. So when the expenses are lumped into the pile of paperwork at the closing table, the cost of selling a home can be less evident.

How much are closing costs? That depends. How nice are you to the title company? Just kidding.

Closing costs vary depending on the sales price, county, type of property (single family home, condo, raw land, etc.), and other factors that have nothing to do with how nice you play. Who pays the closing costs – buyer or seller — are sometimes mandated, sometimes standard practice, and sometimes can be negotiated. In Dallas, it is common, but not mandatory, for the seller to pay the broker commissions, prorated taxes, recording fee, escrow fees, tax certificate, document preparation costs, HOA transfer fees, resale certificate and other miscellaneous negotiable costs (like a home warranty or survey).

One of the large closing expenses is the title insurance premium. In Texas, title insurance rates are established by Texas Department of Insurance and all title companies must charge the same for title insurance. In other states, consumers often shop around for title insurance like they would for auto or home insurance.

The following Title Insurance Basic Premium Rates are based on the sales price of the property. Premiums for policies $100,000 and over in Dallas County are:

Additionally, there are endorsements that can be added on to include coverage for survey deletion, leaseholds, condos, etc. Those are an additional charge. But the good news that unlike auto, home or health insurance, you pay this premium only once at closing. It’s not an ongoing cost like other types of insurance.

Title companies may charge different amounts for the closing costs outside of the title insurance policy. One may charge slightly more or less for the attorney review while another may charge more of less for the courier fees. But they are typically within a few dollars of each other when you look at the total costs.

It’s always a good idea to get title insurance and lenders require it to finance a purchase. Title insurance protects homebuyers from other claims of ownership, outstanding debts of previous owners, fraud, and other title potential problems. Before issuing a title insurance policy, the title company will check for problems with a title by researching public records, deeds, mortgages, wills, divorce decrees, court judgments, tax records, liens, encumbrances, etc. If there is a claim against your property after purchase, the company will defend you in court and will pay you for covered losses up to the amount of your policy.

Like any regulated service business, the difference between one title company and another comes down to service and reputation. If you’re not frequently selling a home, it’s unlikely you know which title companies offer the best service. That’s where a knowledgeable Realtor comes in. They generally can’t save you any money. But good agents have good relationships with title companies that can help make the process run smoothly.
[where: 75230]