What are the seller's and buyer's obligations in beginning the title process? When beginning the process, you need a real estate contract. Both buyer and seller will set up the terms for the contract. Generally, the seller pays for the title examination. It is the buyer's obligation to pay for whatever paper work he or she needs fo.
As you know, we use a real estate contract to transfer property. A real estate contract is the first thing you need when clearing titles. Either a realtor or an attorney would bring me a real estate contract. In this real estate contract it would state the name of the parties of both seller and buyer, the sales price, the legal description, the commission of the real estate broker, the provisions of the transaction such as any conditions of repairs or special obligations of the seller or buyer such as termite inspections, survey, restrictions, property taxes current and delinquent, attorney fees, recording fees, escrow fees, fire and extended hazard insurance, and the signatures of both seller and buyer and the realtor if he prepared the real estate contract. However, the legal description is not a street address. In the county court house, there is what we call a plat. A plat is a recorded map with all the subdivision of the city. Property is filed and recorded by this method. So our legal description comes from a subdivision, lot, or a block. It could also come from a section, if it is rural land, with a grand t, and acreage. Either the realtor or the attorney prepares this contract between the buyer and the seller. The contract also gives the escrow officer a list of obligations between the buyer and seller. There is usually a thirty day window to decide whether or not title insurance is going to be provided or not. The contract states the commission that the realtor is to receive from having instigated the contract between the buyer and the seller. It contains any other restrictions that the buyer may need to know. The contract contains the sales price. The title insurance rate is based upon the sales price that the buyer and seller have agreed upon. If it is a mortgagee title policy, it based upon the amount of the loan or note that the lender will carry on the property. The contract states that fire insurance is going to be provided. It provides for the proration of property taxes and the payments of all delinquent taxes, and it names the title company that will close this transaction as the escrow officer.
The seller normally pays for the title examination. By paying for the policy, the seller is saying 'I'm selling you this piece of property, with this legal description, for this amount. I am going to warrant that I have good title. I'm going to deed the property to you, and I'll also give you title insurance so that you are protected.' The title insurance is in the purchaser name because he is the one who will have the new owner title policy. The seller generally pays for any of the legal fees, the recording of information, the proration of his taxes, any delinquent taxes, the title policy, and the commission. The buyer generally has minimum cost in the process. The buyer may pay half of the escrow fee. If he going to get a mortgagee title policy from the bank for financing, he will generally pay for all the things that are required for him to get financing. In your real estate contract, the buyer can stipulate cash, a mortgage or both as his consideration of payment in the purchase price if an agreement is made between the seller and the buyer.
