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What Does Title Insurance Protect Against?

Title insurance covers the insured party for any claims and legal fees that arise out of such problems. These rights or claims remain attached to the title to the property until they are rectified.

  • False impersonation of the true owner of the property
  • Forged deed releases or wills
  • Instruments executed under invalid or expired power of attorney
  • Undisclosed or missing heirs
  • Mistakes in recording legal documents
  • Misinterpretations of wills
  • Deeds by persons of unsound mind
  • Deeds by minors
  • Deeds by persons supposedly single, but in fact married
  • Liens for unpaid estate, inheritance, income or gift taxes
  • Fraud

AGAINST CLAIMS TO PROPERTY
If a claim is made against your insured title, the title insurance provider protects you by:

  • Defending your title, in court if necessary, at no cost to you.
  • Bearing the cost of settling the case, if it proves valid, in order to protect your title and maintain your possession of your property.

Title insurance gives you the assurance that possible claims on title to the property can be discovered from the public records – have been called to your attention so that these defects can be corrected. It is insurance that, if any undiscovered claims covered by your policy arise out of the past to threaten your ownership of real estate, it will be disposed of, or you will be reimbursed exactly as your title insurance policy provides.

(from Title360 Home Seller’s Guide)


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FAQ on Title Insurance

Q) WHAT IS TITLE INSURANCE?

A) Title insurance is a policy of indemnity protecting homeowners and Lenders from financial loss in the event that certain problems develop regarding the rights of property ownership. There are often hidden title defects that even the most diligent title search will not reveal. In addition to the protection from financial loss, title insurance pays the cost of defense against the covered claim.

Q) WHO PAYS FOR TITLE INSURANCE?

A) In most regions, the Seller typically pays for the Owner’s title insurance policy as it is the Seller’s customary means of proving to the Buyer “clear title.” If the purchase is financed, the Buyer pays for the Lender’s title policy which conveys to the Lender that title is “free and clear.” If the Buyer is paying cash, there is no requirement for separate title insurance.

Q) WHO NEEDS TITLE INSURANCE?

A) The Seller, Buyer and Lender all benefit from the insurance provided by title companies. Buyers and Lenders in real estate transactions want to know that the property they are involved with is insured against certain title defects. Title companies provide this needed insurance coverage subject to the terms of the policy.

Q) WHAT TYPES OF POLICIES ARE AVAILABLE?

A) Title companies routinely issue two types of policies: An Owner’s policy which insures you, the homebuyer, for as long as you own the home; and a Lender’s policy which insures the priority of the Lender’s security, interest over the claims that others may have in the property.

Q) WHY DOES THE SELLER NEED TO PROVIDE TITLE INSURANCE?

A) Title insurance represents a guarantee that the property being sold is unencumbered by any legal notices or judgments that might limit or jeopardize ownership. Any prospective Buyer will need evidence that their real estate investment is free of title defects and isn’t likely to take the Seller’s word on that. In fact, the title insurance policy is required in most contracts of sale. Absent title insurance, the Buyer would need to thoroughly search county and other records to try to find out, and if they made a mistake in searching, they’d have no recourse.

Q) WHAT PROTECTION DOES A TITLE POLICY PROVIDE?

A) A title insurance policy contains provisions for the payment of  the legal fees in defense of a claim against your property which is covered under your policy. It also contains provisions for indemnification against losses which result from a covered claim. A premium is paid at the close of a transaction. Unlike other types of insurance, there are no continuing premiums due.

Q) WHAT ARE MY CHANCES Of EVER USING MY TITLE POLICY?

A) Not all title searches are free from defect. As such, there have been Sellers who, as a example, might find during escrow that there are undisclosed mortgages or liens on their property from an original developer. Claims against your property may not be valid, making the continuous protection of the policy all the more important. With title insurance, you could go forward with your closing as scheduled and the title company would undertake the obligation to discharge the liens and clear the title. When a title company provides legal defense against claims covered by your title insurance policy, the savings to you as a Seller for that legal defense alone will greatly exceed the one-time premium paid.

Q) WHO CAN HELP ME ANSWER A FEW MORE QUESTIONS?

A) You can visit www.Title365.com to see a two minute introduction video and explore the Title365 online platform. To speak with a knowledgeable professional, you can call toll free 877.365.9365 or email info@title365.com.

(from Title360 Hoe Seller’s Guide)


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Sellers: Understanding Appraisals

If the Buyer is securing a new loan to purchase your home, the Buyer’s Lender will require an appraisal to determine the fair market value of the property. A licensed or certified appraiser will research nearby “comparables,” houses in your immediate area that have sold in the last six months and are similar in size, age, construction, and amenities.

An appointment will be made for the appraiser to measure your home, draw a representative floor plan, take photographs inside and out, and confirm the property’s condition, specific improvements, and features. After a few days, the appraiser delivers an appraisal report on a standardized form to the Buyer’s Lender which includes the appraiser’s opinion of the market value of the property. Sometimes the appraisal report is used by both parties to set the sale price of the property appraised.

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Understanding Home Warranty

HOME  WARRENTY (2)
The Home Warranty’s Role in Your Sale

As a Seller, a home warranty is basically an insurance policy covering the mechanical, electrical and plumbing systems of a house against unforeseeable events after you close escrow. A policy can ward off potential disputes after the sale for repair and/or replacement of covered items.

Whether the Seller pays for the home protection plan and home warranty coverage or whether the Buyer pays for it, will depend on your local customs. In many regions, the Seller often pays for the coverage because it’s a Seller benefit in that the Buyer won’t be calling after closing if something breaks.

TYPES Of COVERAGE
Home warranty plans range, on average, from $250 to $450 depending on coverage, and are prepaid for a year in advance. When used, the homeowner often pays a co-pay direct to a service provider when a service covered under the plan is rendered. Most home warranty payments are not due until the close of escrow and it becomes part of the Seller’s closing costs. The policy is mailed to the new policy holder and can be renewed on an annual basis going forward.

Coverage varies from state-to-state and from policy-to-policy. Basic home warranty plans cover routine heating, plumbing and electrical systems. Optimal coverage for air conditioning, pools and spas, and appliances, is often charged on a per item basis. More comprehensive plans cover such items as irrigation systems, roofs and garage door openers.

A home warranty plan can also be ordered at the time of listing to protect the seller during the listing period, usually not exceeding six months, then assumed by the Buyer at the time of the sale.

HOW IT WORKS
Once the policy is in effect, when service is needed, the policy holder often has the option to either call the warranty company who will facilitate a call directly from an outside service company to arrange for service or they can call the warranty company’s in-house service department directly to arrange service. If an appliance is malfunctioning and cannot be repaired, depending on contract coverage, the home warranty company will pay to replace and install the appliance, for example.


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Common Defects Found During a Home Inspection

1BUILDING VIOLATIONS
Building violations are often identified where additions and alterations were constructed without a permit.

ROOFING DEFECTS
Problems with roofing material resulting from age, wear or improper installation warranting maintenance, repair, or in some cases, replacement.

CEILING STAINS
Some stains are merely the residual effects of leaks that have been repaired but others can indicate an unresolved issue. Inspectors will determine if a leak is active.

ELECTRICAL SAFETY HAZARDS
Electrical safety hazards such as ungrounded outlets, lack of ground fault interrupters (shock protection devices), faulty wiring conditions in electrical panels can be identified.

WATER INTRUSION
Ground water conditions can result in water intrusion into basements or crawlspaces. Correction can be as simple as regrading the exterior grounds or adding roof gutters or as major as French drains designed by experts.

ROTTEN WOOD
Rotted wood is can be found in places where wood stays wet for long periods such as roof eaves, exterior trim, decks, around tubs and showers, or below loose toilets.

MINOR PLUMBING DEFECTS
Loose toilets, dripping faucets, slow drains, leaking drains and hot water at the right faucet are most commonly found during inspections.

UNSAFE FIREPLACE & CHIMNEY CONDITIONS
A lack of maintenance or faulty installation of fixtures are often found. Unsafe conditions are often attributed to a lack of spark arrestors and involve insufficient clearance between hot metal surfaces and combustible materials within the property.

FIREWALL VIOLATIONS IN GARAGES
Special fire-resistive construction is required for walls and doors that separate a garage from a dwelling. Violations are common, either due to faulty construction, damage or alterations to the garage interior, or changes in code requirements since the home was built.

FAULTY INSTALLATION OF WATER HEATERS
Check to make sure your water heater is installed  in full compliance with plumbing code requirements. Violations can include inadequate strapping, improperly installed overflow piping, unsafe flue conditions, or faulty gas piping.

HAZARDOUS CONDITIONS INVOLVING GAS HEATERS
Most gas-fueled heaters are in need of some maintenance, if only the changing of an air filter while others might be in need of a long-overdue review by the gas company.

(From Title360 Home Seller’s Guide)


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Home Sellers: Understanding the Inspection Process

A home inspection is an evaluation of the condition of a residential property’s general integrity, functionality, and overall safety. The purpose of an inspection is to ensure that a Buyer knows exactly what is being purchased prior to completing the transaction.

In the course of a home inspection, the inspector will evaluate your home’s foundation, framing, roofing, site drainage, attic, plumbing, heating, electrical system, fireplaces, chimneys, pavement, fences, stairs, decks, patios, doors, windows, walls, ceilings, floors, built-in appliances, and numerous other fixtures and components. Pool and spa inspections are add-ons that Buyers can inspect as well. Inspections are not intrusive (holes in the walls). An inspection will take about an hour per 1,000 square feet on average.

All pertinent findings will be detailed in a written report for the Buyer’s reference and review, and the inspector will make a complete verbal presentation of these conditions for those who attend the inspection. This information enables a homebuyer to make educated decisions about a home purchase: whether to complete the transaction, whether to ask the seller to make repairs, or whether to buy the property as is. Buyers can also determine how much repair and renovation will be needed after taking possession, which problems are of major concern, which ones are minor, and what conditions compromise the safety of the premises.

WHO PAYS? Your Purchase Sale Agreement will specify who is responsible for the costs of inspections and for making any needed corrections or repairs. It is negotiable between the parties and should be considered carefully. Your agent will advise you what is customary and prudent.

STRUCTURAL PEST CONTROL INSPECTION. A licensed inspector will examine the property for any active infestation by wood destroying organisms. Most pest control reports classify conditions as Section I or Section II. The inspection and the ensuing Section I repair work is usually paid for by the Seller. Section II preventative measures are generally negotiated, and not necessarily completed.

Section I Conditions are those currently causing damage to the property. These conditions generally need to be corrected before a Lender will make a loan on a home.

Section II Conditions are those not currently causing damage but which are likely to, if left unattended.

HOME INSPECTION. This inspection may encompass roof, plumbing, electrical, heating, appliances, water heater, furnace, exterior siding, and other visible features of the property. A detailed report will be written with recommendations and pictures which may include the suggestion to consult a specialist (such as a structural engineer or roofing contractor). The inspection fee is usually paid by the Buyer.

GEOLOGICAL INSPECTION. If requested, a soils engineer will inspect the soil conditions and the stability of the ground beneath the structure, as well as research past geological activity in the area. You may also elect to go to the city and research the property’s proximity to known earthquake fault lines. Typically, the Buyer pays for this inspection.

Some Sellers opt to do a house inspection when they list their property to determine in advance which items might be challenges to selling and to address issues that positively impact the sell ability and competitive marketability of a home. Properly maintained homes typically go into escrow faster.

(from Title360 – Home Seller’s Guide)


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Home Seller Checklist: Interior Clean Up

A prospective Buyer will usually enter through the front door. That’s where you should begin your interior inspection.

Check stairs for loose boards, ripped carpeting, and missing or loose handrails and guards.

Most problems with interior walls are cosmetic. You can buy “erasers” in the cleaning section of most supermarkets to get rid of wall scuffs and floorboard marks.

Ensure doors open and shut properly. Minor sticking is normal but excessive binding indicates possible structural problems.

Open and close all windows to ensure they work properly. Fogging between the panes of a sealed window indicates the seal is broken and the unit needs to be replaced.

Keep furniture to a minimum so rooms appear larger, not smaller. Ensure that traffic can flow in or through rooms unimpeded. If they contain bookshelves or cabinets overflowing with books, magazines and knick-knacks, remove some of these items.

Ensure closets look spacious, organized and uncluttered. Create space by getting rid of old clothes and junk.

Remove or lock away valuables such as jewelry, coins, currency, cameras and compact discs.


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Los Angeles are You Prepared for the Big One? Review the Earthquake Preparedness Supply List

Drop, Cover and Hold On - slideshowOK, time to stop procrastinating!

Being prepared means being equipped with the proper supplies you may need in the event of an emergency or disaster. Keep your supplies in an easy-to-carry emergency preparedness kit that you can use at home or take with you in case you must evacuate.


At a minimum, you should have the basic supplies listed below:


Consider the needs of all family members and add supplies to your kit. Suggested items to help meet additional needs are:

  • Medical supplies (hearing aids with extra batteries, glasses, contact lenses, syringes, etc)
  • Baby supplies (bottles, formula, baby food, diapers)
  • Games and activities for children
  • Pet supplies (collar, leash, ID, food, carrier, bowl)
  • Two-way radios
  • Extra set of car keys and house keys
  • Manual can opener

Additional supplies to keep at home or in your survival kit based on the types of disasters common to your area:

  • Whistle
  • N95 or surgical masks
  • Matches
  • Rain gear
  • Towels
  • Work gloves
  • Tools/supplies for securing your home
  • Extra clothing, hat and sturdy shoes
  • Plastic sheeting
  • Duct tape
  • Scissors
  • Household liquid bleach
  • Entertainment items
  • Blankets or sleeping bags

(From the Red Cross)

Stay safe everyone!
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Download the Red Cross Earthquake app HERE


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Home Seller Checklist: Curb Appeal

How your house looks from the street is where prospective buyers will form that all-important first impression. Stand at the curb in front of your house and analyze what needs to be done to clean up the yard and make it look more inviting.

Remove any clutter in your yard.

Repair cracked or uneven driveway or walkway surfaces.

Mow your lawn regularly and re-seed, if needed. Weed & mulch flower beds and consider buying some flower-filled planters to enhance the eye appeal of your property.

Clean your windows and walls.

Does your front door need paint? Remember, it’s the first thing people see and welcomes them into your home.

Ensure your eaves and downspouts are clear of debris and in good repair.

Power wash your backyard deck and walkways and do any necessary painting, staining or sealing.

If you have a swimming pool, are the deck and pool clean (when in season)?

Do all outside lights work? Replace any burned out bulbs and clean fixtures of dirt and cobwebs.

Is there a shed? Make sure it looks presentable.

Do you have decorative wooden poles on the porch? If the wood at the bottom is not in good condition, add a new coat of paint.


Thinking of selling? 
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See more: Seller 101