Q.When I bought my home, I was required to have hazard insurance, and I was also charged for Title Insurance. What is Title Insurance? N.B. RioVista
A.A lender will require hazard/fire insurance, if in a flood zone, flood insurance will also be required, and Title Insurance is required. Optional to the buyer would be earthquake insurance.
There are two types of title coverage: California Land Title Association (CLTA), and American Land Title Association (ALTA). A CLTA policy is limited in coverage, but does insure against loss from 1) matters of record, 2) forgery or fraud, 3) lack of capacity, and 4) improper delivery. The ALTA policy insures against loss from 1) unrecorded tax and assessment liens, 2) unrecorded mechanics liens, easements or encumbrances, 3) right of parties in possession, 4) water rights and mining claims, and 5) correct survey showing encroachments.
The CLTA is the choice of most buyers based on price, the ALTA being significantly more expensive due to the amount of research required. The ALTA is most often ordered by lenders; and usually accompanies a physical inspection of the property.
If you have the CLTA, you could sum it up by saying that the policy relates to a signature history.
Q. If I?m selling, what advantage is there for me to do inspections? Shouldn?t I wait and let the buyer pay for the ones they want? T.C. Rio Vista
A. The cost of a pest inspection is about $150, a home inspection about $350. So, for about $500 you can have a complete buyer?s view of what is right and wrong with the home. This will also help you with disclosures, and telling everything you know will help, not hurt your sales opportunities.
On the pest report, if you go ahead and fix what?s wrong, a clearance will be issued, making your buyer?s loan process go that much easier. Also, any home with inspections and a pest clearance is more appealing since it shows the owner has nothing to hide.
On repairs, this puts you in control of what has to be done, not the buyer. On a buyers report, with the rush to close, it could be used as a negotiating tool to reduce the price based on an inflated bid for repairs, whereas doing the work ahead will keep the buyer from rebuilding the home on your money.
Want clarity on buying or selling? Call 707-374-6491,