What is Title Insurance?

Some things you need to know about Buying a Home.

 

The purchase of a home is probably the single largest investment you’ll make in your lifetime. It is only prudent that you want to safeguard your rights and investment. Title insurance assures that your rights and interests to the property are as expected, that the transfer of ownership is smoothly completed and that you receive protection from future claims against the property. It is the most effective, most accepted and least expensive way to protect your ownership rights.

Because land endures over generations, many people may develop rights and claims to a particular property. The current owner’s rights – which often involve family and heirs – may be obscure. There may be other parties (such as government agencies, public utilities, lenders or private contractors) who also have “rights” to the property. These interests limit the “title” of any buyer.

 

Before your real estate transaction closes, the title company performs an extensive search of all recorded documents related to the property. These records are then examined by experienced title officers to determine their effect on the current status of ownership and a report is issued to you or your agents for review. This thorough examination generally allows any pending title problems to be identified and cleared prior to your purchase of the property.

 

If title insurance companies work to eliminate risks and prevent losses caused by defects in the title before the closings, why do you need a title insurance policy?

 

Because even after the most careful research, some title flaws may go undetected. Among the more common flaws to title which are not of record are forgery, invalid court proceedings, mistaken legal interpretations, defective deeds, confusion due to similarity of names, previously unrecognized rights of spouses and undisclosed heirs. These problems may surface at any time in the future.

 

Protection against these flaws and other claims is provided by the title insurance policy which is issued after your transaction is complete. Two types of policies are routinely issued at this time: an “owner’s policy” which covers you, the home buyer for the full amount you paid for the property; and a lender’s policy which covers the lending institution over the life of the loan. When purchased at the same time, you can obtain a substantial discount in the combined cost of an owner’s and a lender’s policy. Unlike other forms of insurance, your title insurance policy requires only one moderate premium for a policy to protect you and your heirs for as long as you own the property. There are no renewal premiums or expiration date.

 

Each policy is a contract of “indemnity”. It agrees to assume the responsibility for legal defense of your title for any defect covered under the policy’s terms and to reimburse you for actual financial losses up to the policy limits.

 

The Home Team Girls Realtors® Real Estate Team helping you with Homes For Sale, Seller Strategies, Certified Buyer’s Agent, Bank Foreclosure Specialist, Short Sale Specialist. We use the service of a certified  Home Stager on all of our listings. For Roseville and Sacramento Realtor Services call on the Home Team Girls.

 

7 Ways to Save on Homeowner’s Insurance

 

According to the Insurance Information Institute, the Average Home Owners Annual Insurance Premium for Ca. in 2005 was $895 and renters insurance was $ 257.  Prevalent storms, hurricanes, floods, and wildfires were the biggest culprits behind the increase. Blame mold claims and stock market losses by insurance companies, as well. 

 

To obtain insurance at a good rate:

 

1. Review the Comprehensive Loss Underwriting Exchange (CLUE) report on the property you’re interested in. CLUE details the property claims history for the most recent five years, which insurers may use to deny coverage. Make the sale contingent on a home inspection to ensure that problems identified in the CLUE have been repaired.

 

 2. Seek insurance coverage as soon as your offer is approved. You must obtain insurance to buy. And you don’t want to be told at closing that the insurer has denied your coverage.

  

 3. Maintain good credit. Increasingly, insurers are using credit-based insurance scores to determine premiums.

  

 4. Buy your homeowners and auto policies from the same company and you’ll usually qualify for savings. But make sure the discount really yields the lowest price.

  

 5. Ask about other discounts. For example, retirees who are home more than working people may qualify for a discount on theft insurance.

  

 6. Seek group discounts. If you belong to any groups, such as associations or alumni organizations, they may have deals on insurance coverage.

  

 7. Investigate a government-backed insurance plan. In some high-risk areas, federal or state government may back plans to lower rates.

  

Ask your agent if you already have an insurance policy:

• Review your policy limits and the value of your possessions annually. Some items depreciate and may not need as much coverage.
•  Insure your house for replacement cost, not market value. Beware: Many insurance companies are eliminating guaranteed full-replacement costs for homes.
• You can usually obtain discounts of at least 5 percent for a smoke detector, burglar alarm, or dead-bolt locks.
• Retrofit your house to protect against natural disasters common to your area.
• Raise your deductible. Avoid making claims under $1,000.

 

 I recently switched my insurance carrier to State Farm. They insure our autos and home which saved us money over all.  For a free quote, call Shalon Smith 916-624-6000 or shalon.smithnged@statefarm.com

 

 

The Home Team Girls Realtors® Real Estate Team helping you with Homes For Sale, Seller Strategies, Certified Buyer’s Agent, Bank Foreclosure Specialist, Short Sale Specialist. We use the service of a certified  Home Stager on all of our listings. For Roseville and Sacramento Realtor Services call on the Home Team Girls.

FEMA to issue revised Flood Insurance Rates in Sacramento

 NEW ZONE BOUNDARIES & INSURANCE REQUIREMENTS

New Flood Zones

Effective December 8, 2008, FEMA will issue revised Flood Insurance Rate Maps (FIRMs) for the CITY OF SACRAMENTO and SACRAMENTO COUNTY.

Flood insurance is generally required for federally-backed mortgages on properties within a “Special Flood Hazard Area”, also called a “100-year flood” zone. The new FEMA maps will change flood zones in the Sacramento area.

Approximately 28,200 parcels within the incorporated City of Sacramento that were not formerly in a 100-year flood zone, will be included within this high-risk zone after the revised maps become effective. In the unincorporated area of Sacramento County, approximately 560 parcels will be affected in this way.

 

During the past year City and County agencies have notified affected property owners about this map change, particularly in the Natomas Basin, stating that, “On December 8, 2008, the federal requirement to carry flood insurance will take effect in Natomas. As a result, it is likely that you will have to carry flood insurance for your Natomas home or building.”

 

 Prospective home buyers may wish to check with their insurance agent to see if the property’s flood zone, and insurance requirements, will be affected by the map changes. To comply with federal law and to obtain the lowest available rate, affected owners must purchase flood insurance before the new maps become effective on December 8, 2008.

NON-CERTIFIED LEVEES ARE NOW AN ISSUE: On the new FEMA flood maps, areas behind a levee are now designated as “Zone X Protected by Levee”. Approximately 74,000 parcels within the City of Sacramento are included within this new map zone. In this new zone, flood insurance is not yet required, but may be in the future.

Some levees protecting these areas may not meet FEMA’s 100-year flood protection standards. If the levee owner cannot demonstrate, within a specified time, that the levee provides protection from a 100-year flood, the levee-protected “X” zone will be revised to the high-risk 100-year flood zone designation. This change will trigger the flood insurance requirement in these areas until the levees are improved to meet FEMA’s standards.

 

Portions of the City of Sacramento that are affected by the new “Zone X Protected by Levee” map zone generally include areas (a) within approximately 2 to 3 miles of the Sacramento and American Rivers south of their confluence, and (b) within approximately 2 to 3 miles east of the Natomas East Canal north of the American River to Rio Linda.

 

Prospective buyers in a levee-protected area may wish to contact their insurance agent and/or local government Planning Department to investigate levee certification status and the possibility of future flood zone changes.

 

 “GRANDFATHERED” LOWER RATES MAY BE AVAILABLE:  In some cases, low-cost flood insurance in a lower-risk zone can be “grandfathered” in place when the parcel becomes included in high-risk 100-year flood zone — IF the policy is purchased BEFORE the effective date of the flood map. You as a homeowner in this situation may wish to ask their insurance agent if they can buy the flood insurance before the effective date of the new map and grandfather in the lower premiums.

 

 INSURANCE BENEFITS IN “LOW-RISK” ZONES:  Even though flood insurance is not required outside of the high-risk 100-year flood zone, it still may be a wise investment. In the lower-risk zones flood insurance is cheaper, yet FEMA notes that one-third of all flood claims paid last year were for policies in low-risk communities. FEMA adds that, on average, a home has a 26 percent chance of being damaged by a flood during the course of a 30-year mortgage, compared to a 9 percent chance of fire.

 For more information & view FIMA’s Flood Maps- Go Here

  

The Home Team Girls Realtors® Real Estate Team helping you with Homes For Sale, Seller Strategies, Certified Buyer’s Agent, Bank Foreclosure Specialist, Short Sale Specialist. We use the service of a certified  Home Stager on all of our listings. For Roseville and Sacramento Realtor Services call on the Home Team Girls.

8 Tips for Buying a Bank Foreclosure

On weekends, I tend to hold open houses for REO properties, and I am surprised how many buyers are not working with an agent. They hope to find their home by searching through the newest bnak foreclosure open houses. 

After they find the right house, then they choose their Realtor. This seems backward.  That process may have worked before, but not now. These buyers are missing out on a lot of services that Realtors bring to the table.

In a way, dealing with REO properties is like being in a seller’s market again. The good homes go fast, some times within 1 day, and most of the time with multiple offers. In this case the early bird gets the worm.

So how does a buyer better position themselves to buy an REO property and get their offer accepted by the bank.

1.     WORK WITH A REALTOR- New properties first show up on the MLS usually at 4 AM each morning.  Realtors are the first ones to see a new listing show up. Each Realtor has what we call “A” clients, that they work with and will call them 1st -as soon as good listing shows up. An “A” client is someone that is working exclusively with that Realtor. If you are an “A” client, you will get the call from that Realtor telling you about the great listing that just showed up.  

Even better, a Realtor can put you on their MLS auto searches that get emailed to you every morning.  If you look at those listings every day, you can stay on-top of the new listing market. If not, you can have your Realtor keep on the look out for you.

If you want a Realtor to work for you and alert you to new listings ask them for this kind of service. So clients who work with agents will be first ones to know about a new listing. So you can be the early bird!

On the other hand, buyers who do their shopping on the internet by themselves, will  see a new MLS listing 24- 72 hours after it shows up on the private Realtor MLS sites. So buyers not working through an agent might see properties up to 3 days after those who choose to work with Realtors. 

Finally, there are others who do their shopping in person, those who are professional open house lookers. These buyers are missing the boat.  Not all new listings have open houses right away. By the time these buyers take action- these home may already have multiple offers on it.

2.   GET PRE-APPROVED- Savvy buyers get pre-qualified if not pre-approved. If you are not pre-approved yet- make sure you do. If you do not know a good lender, ask your Realtor since they know who is good and will provide a smooth transaction. Most, if not all banks require a pre-qualification letter when you place an offer. Your offer will not be accepted or even considered without one. Most Realtors will not show you homes without a Pre-qualification letter.

3.   GET EDUCATED- By working with a Realtor, they can educate you about the home buying process. Once you find the right home, you will have to act fast.  Remember the early bird gets the worm. You will need to  know what payment you feel comfortable with, what your closing costs will be, and are you willing to pay any HOA or Mello Ross? Only your lender and Realtor can help you with that. 

4.   PUT AS MUCH DOWN AS YOUR CAN- An offer with the highest price is not always the best offer. Banks these days are looking for a strong buyer that has no problem qualifying. A buyer that has a 100% loan is considered a weaker qualified buyer than a person who puts down let’s say 20%.  So if you are putting less down and want your offer to be taken seriously, what should you do?  You need to up the ante if you can, offer more money for the home and maybe the bank will like your offer better.

5.   SHOW VERIFICATION OF FUNDS. Make a copy of where your down payment is coming form, a bank statement, an investment, a 1031 exchange property. Black out any personal account info on it. You can also have your bank write up a letter for you as well.

6.   MAKE YOUR OFFER A CLEAN ONE. Usually banks sell the property as is. Don’t ask for repairs. It is always best to keep your contingencies as short as possible. If you do not need a loan contingency, don’t use one. Ask your Realtor for advice on this one.   

7.   MAKE IT YOUR BEST OFFER UP FRONT. You will be in competition with other offers, so if it is a good home, it may be priced lower to encourage bidding wars. I called about a home the other day that had 23 offers on it.

8.   MAKE YOUR OFFER ASAP. In some cases I see homes go pending the day the house comes on the market. How does that happen? Some investors actually buy homes sight unseen. They have their Realtors scout out the homes and then make multiple offers and see which ones stick and which ones don’t. So if you are a first time home buyer, you are competing with those savvy investors that act fast. So take action. Know the market and what you want- check out the homes in the areas you want to live in.  Once you know what you want, what you want to pay, what your closing costs will be, then you qualify to actually buy a home. Good Luck!

 

 

 

 

The Home Team Girls Realtors® Real Estate Team helping you with Homes For Sale, Seller Strategies, Certified Buyer’s Agent, Bank Foreclosure Specialist, Short Sale Specialist. We use the service of a certified  Home Stager on all of our listings. For Roseville and Sacramento Realtor Services call on the Home Team Girls.