COMMITMENT FOR TITLE INSURANCE
As is the custom, the purchase contract (which also serves as escrow instructions) will probably instruct the escrow agent or title company to deliver a commitment for title insurance listing all exceptions to the title insurance policy. Copies of the report go to the buyer, seller, lender, and real estate agent(s) for their evaluation.
What Is On the Commitment for Title Insurance:
The report compiled from the title examiner’s findings provides the following information to show the condition of title as of a specific date; schedule A which is the information submitted to the title department by the escrow officer. It contains the basic information given to a title company such as the legal description of the property, sales price, loan amount, lender, name and marital status of buyer and seller; any assessments that are owed, any encumbrances (deeds of trust) or liens (like IRS tax liens or HOA liens on the property; schedule B “exceptions” a which are tied to a particular property that include Covenants, Conditions and Restrictions (CC&Rs), easements, homeowners association by-laws, leases and other items which will remain of record and transfer with the property. They are referred to as “exceptions” because the buyer will receive a clear title “except” the buyer’s rights will be subject to conditions in the CC&RS, recorded easements and so forth; tax parcel number, tax status (current or delinquent); when taxes are paid through; the requirements/conditions under which the title company will require to be satisfied in order to issue title insurance; and a plat map or assessors map (picture or drawing) showing the location and dimensions of the property as found in recorded documents.
No Guarantees
The commitment for title insurance makes no guarantees about insuring the title to the property. In fact, the preliminary title report does not guarantee anything regarding the property. It merely provides information regarding the contents of documents found in the public records and guarantees that the search made by the title company is complete.
Remember that I answer my phone! Feel free to book a call.
Linda
602-688-9279
Stay on top of what’s happening in Arizona Real Estate!
Stay on top of what’s happening in Arizona Real Estate!
Make sure you check out Linda’s new book: Linda Gerchick’s Practical Guide to Commercial Real Estate. Now available on Amazon!
Let’s have a reality check on Financing Investment Property
Documents
I have helped many investors buy their first income producing property. I really enjoy opening the world to beginning investors.
One of the first and probably the most key steps is to decide how are you going to pay for this. FIRST word of caution is to NOT buy into these so called Gurus of Real Estate on how you can “find” a property and the larger investor is going to let you be a part of the deal and have you manage the deal for a piece of it! Really why would an experienced investor use a novice to help them buy or even find real estate investments.
You need your own funds to do this. If you are going to leverage and you should, you need to get qualified! It is very like qualifying for a home. This would apply to tenant occupied 1-4 units. I do not recommend going to your favorite big bank especially in another state. Number one you will be trying to fit a square peg in a round hole. Use a local lender that is attune not only to small multifamily but also the local market. Plan to have 25% down and 6 months of reserves. The process should take approximately 30-35 days from contract to Close of Escrow.
If you are purchasing in your IRA, this must be in a self directed IRA. To move this to an self directed IRA takes about 3 weeks.
If you are choosing to purchase 5 units or more (or other kind of commercial real estate) you will need a min. of 30 percent down and 5% of reserves. You will also need an entity to hold the property in.
I caution that all your investors seem to want 100 units. While this can be attainable, please set your goals realistically.
So first:
- Set your goals
- Choose the KIND of property that you want to own
- Get qualified
- Now go shopping!
Stay on top of what’s happening in Arizona Real Estate!
Stay on top of what’s happening in Arizona Real Estate!
Make sure you check out Linda’s new book: Linda Gerchick’s Practical Guide to Commercial Real Estate. Now available on Amazon!
"Make the Market WORK For You"™
Unpermit or Permit the Rehab of a Property