What is Title?

A property title is the vehicle in which ownership transfers from one person or business to another, and is composed of three basic elements:

• Rights and interests that are published in public records or by inspection of the property (such as deeds, mortgages, and leases);

• Rights and interests that are not recorded but exist (such as limitations imposed by laws and statues);

• Rights and interests that are hidden (such as forgeries, secret marriages, and unknown heirs).

Every title is made up of many different “rights” and “interests” that may be owned by different people. The most valuable rights and interests are owned by the property’s owners, but others may also have rights to the property, such as liens for unpaid utilities, homeowner’s dues or mortgages.

What is Escrow?

Buying or selling real estate usually involves the transfer of large sums of money. It is imperative that a neutral third party, such as a Title Company, handles the transfer of funds and related documents from one party to another. It is essential that all conditions of the sale are met before the property and money change hands. The Escrow Holder impartially carries out the written instructions given by the principals (buyer, seller, and lender). This includes receiving funds and documents necessary to comply with those instructions, completing or obtaining required forms, and handling final delivery of all items to the proper parties upon successful completion of the escrow.

What is an Appraisal?

A home appraisal is an unbiased estimate of the true (or fair market) value of what a home is worth. All lenders order an appraisal during the mortgage loan process so that there is an objective way to assess the home’s market value and ensure that the amount of money requested by the borrower is appropriate. The appraisal can include recent sales information for similar properties, the current condition of the property, and the location of the property, i.e., insight as to how the neighborhood impacts the property’s value.

What is a short sale?

A short sale is when a home owner sells his or her property for less than the amount owed on their mortgage. In other words, the seller is “short” the cash needed to fully repay the mortgage lender. Typically, the bank or lender agrees to a short sale in order to recoup a portion of the mortgage loan owed to them.

What is a foreclosure?

Foreclosure is what happens when a homeowner fails to pay the mortgage. More specifically, it’s a legal process by which the owner forfeits all rights to the property.

What is the difference between a short sale and a foreclosure?

Short sales can be a good deal for a bargain house hunters, but buying a short sale can be a headache.

It is not normally recommended for first-time buyers thinking of purchasing a short sale. The extra paperwork and long waits may lead to frustration.

The average short sale takes around 90 to 120 days, and sometimes even longer. Why? Mortgage lenders often won’t approve the sale without buyers agreeing to its demands like paying for many additional fees such as repairs, wire transfers, and closing costs. These are all costs the seller would typically be on the hook for, but in a short sale, the bank is stuck with the bill. Therefore, to reduce its costs, the bank may try to negotiate these costs with the buyer.

Other than the involvement of the bank, a short sale will proceed much like other sales. Buyers can get a mortgage and have the opportunity to seek an inspection.

Foreclosures sales, however, are different. For one, foreclosure properties can be purchased only with cash; no traditional loan will be granted for a foreclosure.

While a foreclosure can be a great deal for home buyers, they also come with some risk. A foreclosed home sold at the courthouse is bought without warranty and sight unseen.

That means you will not be able to have a foreclosed home inspected for structural problems, mold, infestations, or other issues with the house. You will also assume all liens that might be tied to the property.