A real estate transaction only occurs when a seller can convey clear and marketable title to a piece of property to a buyer.  Sounds pretty easy, huh?  Well, there’s a lot that the closing attorney must do before validating clear and marketable title.  This is an incredibly important step because if you were to close on a home without owners title insurance only to find out later your property is stuck with previously unknown encumbrances or past claims, guess who has to pay?  You.  Attorneys overall do a great job of validating title, but we’ve heard the one in a million stories that will make you think.  Your lender will most likely require lender’s title insurance, but don’t forget about owner’s title as well.  It is vital protection that can really come back to haunt you in the event you don’t secure it at the closing table.

In a continued effort to provide you with relevant information, Leigh Clack with Neel and Robinson (lenox@neelandrobinson.com)  reveals what all is involved in a title search.  If you have further questions, feel free to contact us or Leigh Clack directly.  She can be reached by phone at (404) 705-3690.

WHAT IS CHECKED IN A TITLE SEARCH?

1. Chain of title = each deed from seller to buyer
   1. Legal description
   2. Signatures from all owners
   3. Proper execution (witness, notary, corporate seal for company)
   4. No “breaks” in chain = buyer who does not sign as seller later
   5. Most recent deed should match seller’s name on sales contract
2.  Property taxes
   1. Enforceable for seven years
   2. All Georgia properties have county taxes; some also have city taxes
   3. Not removed by foreclosure or bankruptcy
   4. Interest and penalties due if paid late
   5. Homestead exemption and other discounts – determine if still applicable for current year
   6. Some cities/counties also collect water, garbage, other utilities
3.  Open mortgages (security deeds)
   1. Current owner’s mortgages – confirm open – get payoffs
   2. Previous owner’s mortgages – confirm paid – get releases
4.  Liens and judgments
   1. Liens for materials and/or labor are specific to each property
   2. Judgments against owners in chain of title attach to any property owned by that person
   3. Valid for seven years from filing – can be refiled to extend
   4. Common names may have judgments that are not theirs – need to confirm with social security numbers and affidavits
5. Income tax liens
   1. Valid against all property of taxpayer
   2. Federal tax liens (IRS) valid for ten years – state for seven
   3. State liens removed by foreclosure – federal must be given notice and right to redeem
6.  Pending lawsuits and divorces
   1. Lawsuits affecting subject property must be resolved
   2. Other lawsuits – confirm no judgment entered yet
   3. Divorces – must be resolved or have all parties (spouses and their attorneys) agree to the sale
   4. Probate/trust/estate/guardian issues – determine who can sell

One of the easiest ways to achieve success is to always surround yourself with good people.  In business, I’ve always found a way to build a strong network team of professionals that I know and trust.  These pros provide me with wise counsel, add value to what I do, and just as importantly, provide my clients’ with the same level of service and knowledge that I strive to give.  One of those professionals on our team is Brad Trussell, an All State Exclusive Insurance Agent.  Brad happens to be our personal insurance agent, and Lesley and I appreciate his willingness to consult with us and our clients on the differences, pitfalls, and benefits of insurance coverage.  I have asked Brad to contribute periodically to our blog.  My goal is to provide relevant information across the board for the homebuying consumer.  I hope you find the information helpful.  This particular article by Brad is about the importance of getting your homeowner’s insurance right.  Many thanks to Brad for his valuable insight.

Insurance Tidbits:  Why does Homeowner’s Insurance get short sided?

by Brad Trussell, All State Exclusive Agent (bradtrussell@allstate.com)

When is the last time that you turned on the TV and saw a commercial about Homeowner’s insurance?  Auto insurance gets all the press in the commercials you see on TV, and while it does carry the most potential exposure liability, what is the biggest and most valuable asset that you own?

The most common mistake seen in the homeowner’s insurance market is a homeowner’s policy that insures the home for the market/sell price.  The reason for this mistake is that when you buy a home, you are buying the home AND the land that the home sits on (also known as “the lot”).  However, there is no homeowner’s insurance policy that provides coverage for the dirt that the home is built upon (your homeowner’s policy will provide liability coverage for incidents that take place on the property, but there is no physical damage coverage).  Therefore, your insurance agent should work with you when writing your homeowner’s policy to ensure that you are not over-insuring your home, or worse yet, under-insuring your home.

Most insurance agents have access to a company provided estimator that uses the characteristics of your home to calculate an appropriate replacement value (cost to re-build your home).  Examples of these characteristics can be: exterior walls (brick, siding, stucco), number of bathrooms, is the home built on a slab, have a crawlspace or basement, among many others.  Another measure in calculating a replacement cost of your home would be to know the “cost per square foot”.  Typically, homes can range from $100/sq. ft. to $180 sq. ft. depending on the size and materials used to build the home.  Once you obtain this square foot value, you simply multiply the cost per square foot by the square footage of your home, but make sure to back out any garage and basement square footage.

If you have any further questions regarding your homeowner’s coverage, then contact your local personal insurance agent or feel free to call my Allstate office at (404) 842-0399.

 Brad Trussell, Allstate Exclusive Agent  3925 Peachtree Road, Suite 150  Atlanta, GA 30319  (404) 842-0399