Buying a new home can be a confusing process. All the different steps and terminology of closing can be really overwhelming, especially if you are a first-time homebuyer.
Fortunately, with the experts at True Concept Title, you can sigh a breath of relief. We can help take care of all the head-pounding details of home closing while helping you understand the steps of the process. Read our guide to grasp the 5 “E’s” of real estate terms.
1. Easements
The simplest definition of easement is that it gives a person or entity the legal right to access a property owned by someone else for a specific purpose without permission. One example is an easement held by a local utility company in case they need to access power lines or cables on your property.
There are many different kinds of easements, and each one can mean different things for a property. The previously mentioned example is a utility easement, but there are also private easements, easements by necessity, and prescriptive easements.
While easements sound like they might be a concerning problem, they are often very practical and can benefit you or even the entire neighborhood. However, it’s still a good idea to research thoroughly whenever you’re buying a house to be aware of any easements on the property.
2. Eminent Domain
Eminent domain is the power of the government to convert private property to public use. As long as the government provides just compensation to the owner of the property, they can exercise the power to seize a property.
This government right is most often exercised when building roads or expanding pre-existing roads. In the case of easements, other individuals can enter your property, but in a case of eminent domain, you may no longer own the property at all.
The government retains the right to seize any private property for the purpose of public use, as long as the owner is properly compensated.
3. Encroachment
Encroachment occurs when someone else utilizes your property for their own purpose without your permission. In some cases, encroachment is intentional. A frustrated neighbor may deliberately build property on land they do not own.
Encroachment may seem harmless in some instances, but it can cause property damage and significant liability issues when it comes time to sell.
Some examples of encroachment include:
- A neighbor building a fence that extends onto your property
- A structural addition to a neighbor’s home that extends past the boundary lines
- An overgrown tree, garden, or bush that crosses over the property lines
While encroachment may not affect your day-to-day life, it can cause complications when you try to sell your home or turn you away from buying a specific property. True Concept Title strongly suggests you always conduct a professional property survey before starting any building projects on your land in order to avoid encroachment.
4. Escrow
Escrow is an essential aspect of the title process that relates to the monetary transaction. The money you offer up as a down payment to show the seller you are serious about purchasing the home is held in escrow by a third-party title company until closing.
After your home loan closes, this initial escrow account is closed and a second account is created by the mortgage lender. This new account exists throughout the entire span of your mortgage loan with the purpose of ensuring you pay property taxes and insurance so that your home remains protected.
If you don’t pay a certain tax, your home may be at risk of foreclosure or being seized, which would entail your lender not receiving the money for your mortgage that you promised them.
5. Endorsement
An endorsement on your title insurance is an amendment that adds additional protection beyond the standard title insurance policy. With almost 100 types of endorsements available to homeowners, you are highly unlikely to need all of them. It’s best to choose the endorsements that are aligned with your specific circumstances.
True Concept Title is available to help you determine which endorsements best suit your needs. We will explain all of your various options and help you decide which is the best fit for your property.
Make Closing E-asy with True Concept Title
Buying a new home doesn’t have to be a highly stressful process. As a highly experienced title insurance company, True Concept Title can help you understand each step of the process so that you feel best prepared to face all of the obstacles of the homebuying process.
Our flexibility and breadth of experience truly sets us apart from other companies. Whether you are buying, selling, or re-financing a home, we have the services and processing capabilities that you need.
If you’re ready to place a down payment on a new home but are unsure of the next steps to take, we’ll make it easy for you! Call our team today – (813) 263-7168!
