Your title insurance policy covers you more than you may realize

Even the most diligent of title searches cannot uncover 100 percent of title defects 100 percent of the time. Title insurance not only covers mistakes made during a title search, it covers many more issues that a title search may not reveal. 

Sometimes tardy record keeping at the government clerk's office is to blame. Other times, it may be a forged document. No matter what the issue may be, without title insurance the homeowner will be on the hook for any costs to defend title as well as any losses incurred.

While it's true that the title insurance claims rate is somewhere around 5 percent – relatively low in comparison to other forms of insurance – this number can be somewhat misleading. That's because a lot goes on behind the scenes at the title company to ensure a smooth, stress-free closing. The behind-the-scenes work doesn't always show up in the statistics.

When a title cloud is detected prior to a real estate closing, the title company-to-insure contacts the title company who handled the original settlement on behalf of the seller. In our experience, this occurs in about one out of every 10 transactions. When it does, we're usually able to resolve the issue without having to alert the seller or report a claim.

Keeping in mind that an owner's title policy ranges on average around $1,100 for a house in the District of Columbia, and the cost of legal fees to clear title could run into the tens of thousands of dollars, it just seems like good fiscal sense to purchase the added protection.

Headlines: Consumers don't shop for mortgage, title services enough

Here's a look at what's happening in real estate in the District of Columbia and beyond. 

Why DC's housing inventory shortage will continue 'for the foreseeable future'

A recent uptick in the number of homes on the market hasn’t been enough to balance an inventory shortage in the DC metro, and low inventory will likely continue to be a theme through the year. -Urban Turf

How to negotiate closing costs on a newly constructed home

Today, many builders offer incentives to the buyer in the form of either upgrades to the house or credits given at settlement that help reduce the closing costs. -Washington Post

How much for a Georgetown condo under 440 square feet?

This zero-bedroom condo thinks a lot of itself, and it should with how well it's able to transform a potentially cramped abode into a well-lit, well-furnished space. -Curbed DC

JBG acquires majority of Akridge's Half Street project by Nationals Park

DC developer Akridge has sold the majority of its Half Street parcel across from Nationals Park to The JBG Cos., which is expected to redevelop the site with two new residential buildings and a large amount of what one executive called "dramatic" retail. -Washington Business Journal

Study shows consumers spend too little time mortgage shopping

According to a recent report by the Consumer Financial Protection Bureau (CFPB) in conjunction with the Federal Housing Finance Agency, a significant number of consumers may not be shopping enough to ensure they are receiving the mortgage that best fits their circumstances. -Washington Post

Equity One unveils Westbard development plans

The condo building proposed for the Manor Care site would have 75-foot heights facing River Road, but rise 50 feet in the back to better fit in with the single-family homes in the neighborhood. The company is planning about 250 units for the two buildings. -Bethesda Magazine

How to make sure you have "good funds" for your real estate closing

Wire transfers are a very common aspect of the real estate settlement process. But for many consumers, the purchase of a home is their only exposure to wire transfers, which can lead to confusion and unnecessary stress. 

To clear up any confusion and to help prepare our clients for settlement, here is rundown of some of the questions we hear and things to consider regarding wire transfers.

I wired directly via my bank’s website and money has left my account – why don’t you have it yet?

This is a question I have gotten more than once.  Did your bank charge you a fee for this "wire"?  The answer to this follow-up question, is usually "no" or "I paid a small fee." What your bank may not be telling you is that you are actually ordering an ACH (Automated Clearing House) transaction and not a wire directly from your bank to our bank.  

You will need to check in with your bank prior to sending out funds to make sure the fee you are paying is for sending a wire and not a fee for an expedited ACH.  Our bank will not accept ACH transactions for the purchase, because the ACH funds are not considered good funds.

Why aren’t ACH funds "good funds" for purchasing my home?

An ACH goes through a clearing house. Because these are bulk transactions, the funds are not "liquid," or immediately available funds. ACH funds can be adjusted, changed or recalled by the clearing house without authorization from the accountholder. In general, our bank will not accept ACH funds for any of our accounts

Can I write a personal check?

The short answer is no. Personal checks are not considered immediately available funds. Unfortunately, not all personal checks are good when they are written – either by mistake or by design, clients sometimes fudge that funds are available. There are occasions when we can accept a personal check for a small amount of funds at closing.

What are "good funds" for closing?

A wire, cashier’s check, or a certified check is considered good funds. A wire is considered good funds because the funds are wired from your bank directly to our bank via the Federal Reserve and are immediately available. Another example of good funds would be a cashier’s check. These funds are immediately available from the bank.

A certified check is not often used as a vehicle for funds, but is still acceptable. A certified check is a personal check that has been stamped and certified by a bank official the funds are available in the account. The bank then make sure those funds are only good for that purpose. Banks rarely issue certified checks, as it is much easier to issue a cashier’s check. 

So, how do I make sure I have "good funds" for closing?

All banks are different. Have a conversation with your bank early in the process. Find out what your bank needs from you to wire funds. Ask your bank if there are any fees involved to wire funds and how much lead time the bank needs for getting funds to closing on time. Also, make sure you coordinate with your settlement agent and lender to ensure you have the correct bottom line and have the amount of funds to close readily available prior to closing.   

Taking these steps early really help to make the buying process a little less stressful.   

Close It!™ House of the Week: Spanish masterpiece with Potomac River Basin views

This week, we've stumbled across an amazing house in the Palisades neighborhood – a 1953 Spanish masterpiece according to the listing – that looks like it should be located in Napa Valley instead of Northwest Washington, DC. Sale price is $1.595 million.

The photo tour highlights several elegant features of this 4-bedroom, 2-bathroom home, including a gorgeous deck off the main level and a private patio above it off the master retreat. The house has three patios in all. Other features include arched doorways, built-in shelving and a commercial kitchen. 

Assuming a homebuyer puts down 20 percent on a conventional loan, her cash to close number will be approximately $366,298.90. Monthly payments with carrying charges would then be around $7,072.99 per month. For a complete picture of the cash to close, or for a run-down of the seller's side of the deal, plug the numbers into the Web version of Close It™ or download the free iOS app.

Close It!™ House of the Week: Delightful unit, tastefully updated

This week we're looking at a delightful 1-bedroom condo in DC's Barnaby Woods neighborhood, located just a block from Connecticut Avenue and about a mile from the Friendship Heights metro stop. It's listed for $264,990.

Previous owners made lots of updates to this light-filled unit, including a chef's kitchen and a fabulous bath with jet tub. This unit also has a covered patio as well as a separate storage unit. 

Assuming a homebuyer puts down 20 percent on a conventional loan, her cash to close number will be approximately $62,620.26. Monthly payments with carrying charges would then be around $1,572.42 per month. For a complete picture of the cash to close, or for a run-down of the seller's side of the deal, plug the numbers into the Web version of Close It™ or download the free iOS app.

  • Ways to save at closing

    Title charges are the largest chunk of closing costs and can vary by hundreds of dollars.

    Learn more

  • What are closing costs?

    The real estate closing process involves loan steps, legal steps and title steps.

    Learn more

  • What's title insurance?

    Insure your legal ownership just like you'd insure the building, but for lots cheaper.

    Learn more

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Our blog contains general information only, not intended to be relied upon as, nor a substitute for, specific professional advice. Rate tables and figures that appear on our blog are deemed reliable but not guaranteed. For current rates & policies, refer to our Quick Quote and Consumer Guide. We accept no responsibility for loss occasioned to any purpose acting on or refraining from action as a result of any material on our blog.