If you are in escrow for a California residential property that you're buying, and if you don't know it already, there are lots of documents to read, understand and sign--within a deadline no less. It's a lot to comprehend at once, especially since, unless you have acquired properties within a recent one or two year span, you don't see these documents more than once every few years at the most, if ever. Transaction confusion and anxiety can be at least partially reduced by building up familiarity with some basics in advance of actually being in escrow.
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| Temple Lofts |
Perhaps your experience has been routine in the past, so the entire report seemed like a "no brainer". But what if something unexpected happens? I remember the two buyers I once represented who especially wanted two gated parking spaces with their condo purchase, neither spouse wanted to park on the street. The MLS listing clearly stated there were two parking spaces, and they obtained an accepted offer believing that's what they would have. However, the legal description section on the preliminary title report (which they said they completely understood after receiving it) said something different, and my subsequent review and conversation with the title officer confirmed there was only one parking space. It was several days of huge disappointment for the buyers--but they ultimately proceeded with the purchase because the condo otherwise met with their approval. Condos in particular can run into these parking issues, so be sure to review your report if you're wanting a condominium, in this case it was the legal description that revealed the parking space.
Schedule B - any exceptions included here need to be reviewed--they are matters that will not be covered by the title policy: pending court actions, private transfer fees which must be paid upon sale, judgments, tax liens, notice of default, trustee's sale, junior liens. Unpaid property taxes, assessments and deed of trust are usual items to see on Schedule B as conditions to be removed prior to closing, unlike the previous items.
Forgery is a felony and unfortunately can happen to an unsuspecting property owner who may be the victim of someone attempting to transfer legal ownership without his/her knowledge. Title insurance protects against forgeries which may have occurred prior to the issuance of an owner's policy. Otherwise, an owner would have to bear the expense of resolving legal issues resulting from a forgery.
A requirement is to provide the title company with a statement of information (early in escrow, please!) which is used to discover matters which affect the interest of both the buyer and seller, i.e., judgments or tax liens in the public record. If a buyer, for example, has an unpaid lien of $10,000 filed against her for medical bills, even though it has nothing to do with the subject property, this may affect her ability to obtain a mortgage and must be paid off before the close of escrow.
These are just some of the issues handled by the issuance of a "prelim" report -- having title insurance is not something that should be skipped in your property purchase.
If you would like a sample copy of a preliminary title report, please contact me with your email address.
If you would like a market evaluation of your property, I will be happy to evaluate in person or online.
Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996
