The subject of "Title Insurance" may not be the most exciting topic, but this is an important aspect of a real estate transaction, nonetheless!! When purchasing a property, your Title Commitment will report the status of the title (including liens on the property), and the conditions and requirements under which the title company will issue an insurance policy once the transaction has closed. The Commitment also lists specific exceptions from coverage (matters that the policy does not cover). Essentially, this policy insures your title and ownership of the property against loss in a property dispute!
Take a close look at the Title Commitment when you receive it, as you have the opportunity to terminate your contract before the Title Objection deadline without losing your earnest money, or ask for a resolution to any issues before the Title Resolution deadline.
The Title Commitment includes 3 main sections, with a "jacket" section at the front, providing conditions and disclosures to the proposed insured:
Schedule A - Provides the "effective date" (which includes the gap period until closing), the Owner's Policy amount (purchase price), and Loan Policy amount (loan amount), the legal description of the property, names of the buyers and sellers, and the premium amounts for the policies ... all of this information should be checked for accuracy!
Schedule B - Section 1 - Provides requirements (mostly of the seller) that need to be met prior to closing, such as paying off a mortgage, or getting a lien removed. If the contract states that the commitment should "delete over standard exceptions" (recommended), this should be noted in this section of commitment.
Schedule B - Section 2 - Provides exceptions to the policy (items not covered, other than 1-4 if the commitment deletes over standard exceptions). This section will include water rights, taxes or assessments, rights of way or easements, oil and gas rights, covenants, etc. Title insurance only covers the surface of the property, though many times additional endorsements can be purchased to cover some of the items in the exceptions section, so ask the title company ... and if you see anything unusual, ask for clarification!
Title Insurance premiums should be the same for a property no matter which title company is used, as the policies are all issued by ALTA (American Land Title Association) ... the only difference in title companies is the amount charged for document preparation (which is not significant, and generally split between buyer and seller), and customer service! Note that Title Insurance is generally paid for by the seller in Colorado, but this can be negotiable. The policy covers both the lender (for the life of the loan), and the buyer (for the entire period of ownership).
So READ your Title Commitment, and ask questions!!
Tuesday, August 13, 2013
Friday, April 26, 2013
Tuesday, June 26, 2012
Thursday, August 18, 2011
Debt Collection & the Fair Practices Act
A recent article in the Longmont Times-Call provided great information related to the Federal Fair Debt Collection Practices Act, which might interest those in situations in which a debt collector has been in contact ... in general, "Debt collectors cannot use abusive, unfair or deceptive practices".
First, the Act covers personal, family and household debts (including credit card debt, auto loans, medical bills, or mortgages), but not business related debts:
1. A debt collector may contact you between the hours of 8 am and 9 pm only, unless you agree otherwise. They cannot contact you at work if you tell them you are not allowed to take calls there (this can be done orally or in writing).
2. Talk to the debt collector at least once to see if you can resolve the matter first. If you do not want them to contact you any further, send a letter in writing by certified mail, stating as such. Please note that this does NOT get rid of the debt, and the company can still sue you to collect.
3. If you are represented by an attorney, the debt collector must contact the attorney only.
4. The debt collector is not allowed to discuss your debt with anyone other than you, your spouse or your attorney, but can contact others to find your phone number, address, and place of employment.
5. Within five days of first contacting you, the collector must send a written "validation notice" with all related debt information (amount owed, creditors name, and how to proceed).
6. Debt collectors are not allowed to use threats, obscene language, or false claims.
7. If the debt collector is trying to collect on more than one debt, you can dictate which debts your payments should be applied to.
8. Debt collectors can garnish a bank account or wages only by court order, if the collector has sued you and won a judgment in court. If you receive a lawsuit summons, do NOT ignore it!
If you believe that a debt collector has violated the law, you have the right to sue within one year of the violation. You might be able to recover lost wages, medical bills, attorney's fees, court costs, and up to $1,000. But please note again, that even if the debt collector violates the law, your debt does not go away!
The Act, in Full:
http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf
First, the Act covers personal, family and household debts (including credit card debt, auto loans, medical bills, or mortgages), but not business related debts:
1. A debt collector may contact you between the hours of 8 am and 9 pm only, unless you agree otherwise. They cannot contact you at work if you tell them you are not allowed to take calls there (this can be done orally or in writing).
2. Talk to the debt collector at least once to see if you can resolve the matter first. If you do not want them to contact you any further, send a letter in writing by certified mail, stating as such. Please note that this does NOT get rid of the debt, and the company can still sue you to collect.
3. If you are represented by an attorney, the debt collector must contact the attorney only.
4. The debt collector is not allowed to discuss your debt with anyone other than you, your spouse or your attorney, but can contact others to find your phone number, address, and place of employment.
5. Within five days of first contacting you, the collector must send a written "validation notice" with all related debt information (amount owed, creditors name, and how to proceed).
6. Debt collectors are not allowed to use threats, obscene language, or false claims.
7. If the debt collector is trying to collect on more than one debt, you can dictate which debts your payments should be applied to.
8. Debt collectors can garnish a bank account or wages only by court order, if the collector has sued you and won a judgment in court. If you receive a lawsuit summons, do NOT ignore it!
If you believe that a debt collector has violated the law, you have the right to sue within one year of the violation. You might be able to recover lost wages, medical bills, attorney's fees, court costs, and up to $1,000. But please note again, that even if the debt collector violates the law, your debt does not go away!
The Act, in Full:
http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf
Tuesday, August 9, 2011
Ten Tax Tips for Selling Your Home
Great tips provided by the IRS!!
IRS Summertime Tax Tip 2011-15, August 8, 2011
The Internal Revenue Service has some important information to share with individuals who have sold or are about to sell their home. If you have a gain from the sale of your main home, you may qualify to exclude all or part of that gain from your income. Here are ten tips from the IRS to keep in mind when selling your home:
1. In general, you are eligible to exclude the gain from income if you have owned and used your home as your main home for two years out of the five years prior to the date of its sale.
2. If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint tax return in most cases).
3. You are not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home.
4. If you can exclude all of the gain, you do not need to report the sale on your tax return.
5. If you have a gain that cannot be excluded, it is taxable. You must report it on Form 1040, Schedule D, Capital Gains and Losses.
6. You cannot deduct a loss from the sale of your main home.
7. Worksheets are included in Publication 523, Selling Your Home, to help you figure the adjusted basis of the home you sold, the gain (or loss) on the sale, and the gain that you can exclude.
8. If you have more than one home, you can exclude a gain only from the sale of your main home. You must pay tax on the gain from selling any other home. If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time.
9. If you received the first-time homebuyer credit and within 36 months of the date of purchase, the property is no longer used as your principal residence, you are required to repay the credit. Repayment of the full credit is due with the income tax return for the year the home ceased to be your principal residence, using Form 5404, First-Time Homebuyer Credit and Repayment of the Credit. The full amount of the credit is reflected as additional tax on that year's tax return.
10. When you move, be sure to update your address with the IRS and the U.S. Postal Service to ensure you receive refunds or correspondence from the IRS. Use Form 8822, Change of Address, to notify the IRS of your address change.
If you have any questions about the above information, please feel free to call or e-mail Cynthia ... I'm more than happy to answer questions regarding taxes or real estate (or I will find the answer for you!!!
Thursday, January 6, 2011
Tax Update 2011
On December 17, 2010, President Obama signed the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, which extended certain tax cuts for two additional years. The highlights of this piece of legislation are as follows:
~ Individual Income Tax Rates will remain the same, at 10, 15, 25, 28, 33 and 35 percent, based on taxable income
~ Capital Gains and Dividend Tax Rates will remain the same at a maximum rate of 15 percent (28% for collectibles)
~ The Alternative Minimum Tax (AMT) exemption amounts will increase, to help protect middle income taxpayers
~ Employees will pay less in social security taxes during the year 2011, a decrease from 6.2 percent to 4.2 percent of wages up to $106,800
~ The Estate Tax has been reinstated at a maximum rate of 35 percent, with a $5 million exclusion amount
~ The Gift Tax has been reunified with the estate tax, with a maximum rate of 35 percent, and applicable exclusion amount of $5 million
~ The American Opportunity Tax Credit has been extended
~ The following tax incentives have also been extended through 2011: State and local sales tax deduction; Teacher's classroom expense deduction; Tax-free distributions from IRA's for charity; Higher education tuition deduction
For more information, please feel free to contact me!
~ Individual Income Tax Rates will remain the same, at 10, 15, 25, 28, 33 and 35 percent, based on taxable income
~ Capital Gains and Dividend Tax Rates will remain the same at a maximum rate of 15 percent (28% for collectibles)
~ The Alternative Minimum Tax (AMT) exemption amounts will increase, to help protect middle income taxpayers
~ Employees will pay less in social security taxes during the year 2011, a decrease from 6.2 percent to 4.2 percent of wages up to $106,800
~ The Estate Tax has been reinstated at a maximum rate of 35 percent, with a $5 million exclusion amount
~ The Gift Tax has been reunified with the estate tax, with a maximum rate of 35 percent, and applicable exclusion amount of $5 million
~ The American Opportunity Tax Credit has been extended
~ The following tax incentives have also been extended through 2011: State and local sales tax deduction; Teacher's classroom expense deduction; Tax-free distributions from IRA's for charity; Higher education tuition deduction
For more information, please feel free to contact me!
Monday, December 6, 2010
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