Frequently Asked Questions
What does a Title Company do?
Title companies, like Circle A Title Company, which is an independent title insurance agent, perform several functions. When a contract is received the title company begins work by searching real estate and other public records, looking for any apparent title problems which should be corrected by the seller prior to closing. When it has finished examining the records it issues a "title commitment" agreeing to insure title to property and, most often, to insure a mortgage lien against the property, subject to certain conditions which must be fulfilled at or before closing. When those conditions have been met the title company schedules the closing, where it supervises the execution and recording of the necessary documents and disburses all funds. After all documents have been recorded it issues the owner's and/or lender's title insurance policies.
Why should I choose Circle A Title Company when I buy or sell real estate property?
All title companies in Texas must charge the same basic title insurance premiums. There is no premium rate competition in Texas because all premium rates are set by the Texas Department of Insurance. That means that title insurance companies must, for the most part, compete for business by the service they offer. Circle A Title Company has certain advantages which allow it offer premier service. It has a modern, high speed digital set of real estate records (called a "title plant" in the title business) which it accesses electronically. This state of the art plant allows a quick turn around time for title searches and examinations. Our talented and experienced staff then takes over, processing the title commitments and closing the transactions with the same kind of dedication and service you have come to expect from Amarillo National Bank. In addition, if you are applying for a residential mortgage from Amarillo National Bank, you will be able to take advantage of one-stop-shopping, because you can apply for the loan at ANB, close it at ANB and know that it will be serviced locally at ANB. Why go anywhere else?
At "The Closing", what will take place?
Unless circumstances don't allow, the closing of escrow will take place in one of the Circle A Title offices. Consult with you realtor about the time and the location. And please let us know if you have any special requests (like interpreters, handicap access, etc.)
Your Circle A Title Closing Agent will be working very closely with your realtor to compile all of the necessary documents for the transfer of title. Appraisal, survey, pest inspections, legal papers, courthouse records, and the like will be accumulated as required by the purchase contract. We will also disburse all funds associated with the sale.
If I'm buying a house, how will I know how much money to bring with me to the closing?
Your realtor and your lender will have this inormation, but the final amount you will need to bring to closing (in "good funds") will be disclosed on a document known as the HUD-1. This is the form that discloses all buyer and seller expenses, and proceeds. The amount of time you and your realtor have to review the HUD-1 will depend on your lender.
What do you mean by "good funds"?
It's a requirement from the Department of Insurance that we can only accept certified checks, or cashier's checks from the buyer or the seller. Further, we are prohibited from accepting large sums of cash. Verify with your realtor, well before closing, just how much you should bring to closing and what funds are required.
If I'm selling a house, how will I know what my proceeds from the sale will be?
Similar to the question above, consult with your realtor. As soon as Circle A Title receives the closing documents from the lender we will quickly prepare the HUD-1 for your review. Until the HUD-1 is completed you will have to rely on figures provided by your realto which should be close to the numbers supplied to us by the lender.
When can I take possession, and what will my monthly payment be?
Generally, possession of the property occurs upon "funding", not "closing". There is a big difference! "Closing" is when the buyer and seller fully execute all of the required documents authorizing the transfer of title. "Funding" occurs when the lender delivers the mortgage funds to the offices of Circle A Title. Basically, unless otherwise agreed to in the purchase contract, the buyer gets the keys when the seller gets the check from the bank.
Consult with your lender about your monthly mortgage payment and when the first payment will be due. We will also discuss this with you at closing.
When should I have the utilities changed over?
Excellent question! Unless otherwise agreed to in the contract, utilities should be transferred by mutual agreement on a date determined by both parties in advance. Don't overlook this important aspect of the transaction. Your realtor will help you, but it's your responsibility.
What is the Texas Homestead Exemption?
Stated simply, the Texas Constitution and various statutes establish the homestead rights in Texas. The homestead rights protect a family's homestead from claims of creditors, both secured or unsecured, with four exceptions. A forced sale of a homestead can occur if the debt arises from:
- Funds borrowed to finance the initial purchase price of the homestead
- Funds borrowed to finance work and materials used in construction
- Permanent improvements on the homestead (i.e. mechanic's lien)
- For property taxes due on the homestead
- Equity loans
What are the applications of the Homestead Law in Texas?
Article 16, Section 50 of the Texas Constitution states that "No mortgage, trust deed, or other lien on the homestead shall ever be valid, except for the purchase money thereof, or improvements made thereon, as herein before provided, whether such mortgage, or trust deed, or other lien, shall have been created by the owner alone, or together with his or her spouse, in case the owner is married. All pretended sales of the homestead involving any condition of defiance shall be void. This does not mean to say that a mortgage on a homestead cannot be refinanced to secure a more favorable interest rate."
What is title insurance?
Title insurance is an insurance policy that insures your ownership interest to your piece of real estate. The title examination department of the title company carefully researches the history of the property you are buying to discover who has interests in the property such as lenders or tax authorities. They also search to see that the person selling you your home actually owns it and has not encumbered it with liens or judgments.
What is the purpose of a title insurance policy?
As a buyer of any real estate, whether it is residential, commercial, farm and ranch, or just raw land, it is important for you be protected against losses you might incur as a result of existing defects in title to the property. Those defects could result from such things as outstanding mortgages or liens, unpaid real estate taxes, breaks in the chain of title, fraud, forged deeds, restrictions on the use of the property, and any number of other problems, some of which may be unknown when you buy the property. An owner's policy of title insurance protects you, as a buyer, against any monetary losses you may incur because of title defects, up to the face amount of the policy. Just as you are protected by your owner's policy, your mortgage lender is protected against title defects which might invalidate its security interest in the property by a lender's policy of title insurance.
What are the costs of title insurance?
The rates for title insurance are set by the Texas Department of Insurance. There is a one time premium that is typically paid at closing, and is based on the sales price of the property. In the event you sell your propery, there are also small closing costs that apply.
Who Pays for title insurance?
Who pays for title insurance is negotiated at the time you sign the contract. There are two basic types of title insurance, Owner's Title Insurance (protection for the buyer) and Mortgagee's Title Insurance (protection for the lender). Typically, the Seller pays for the Owner's Title Policy and the Buyer pays for the Mortgagee's Policy.
What are some of the dangers of not having title insurance?
There are too many to list here. Some of the most common are things such as the seller not actually owning the property he is selling, outstanding liens against the property, unpaid taxes, an ex-spouse who has an interest in the property, Federal or State liens and suits, and forgery, just to name a few.