What Is An eClosing And How Does It Work?

An eClosing involves using some combination of electronic documents, electronic signatures, electronic notarization, and electronic recording.

  • An electronic document is a “native digital” document, as opposed to a scanned-in image of a paper document.
  • An electronic signature is a sound, symbol, or process applied by the signer to an electronic document in place of a wet-ink signature. eSignatures can take many forms, but the three most common versions are holographic (aka hand-drawn with a mouse, finger, or stylus), cursive typeface, and standard typeface.
  • An electronic notarization is the process of applying the notary’s electronic signature and notarial stamp or seal to an electronic document.
  • And lastly, electronic recording is the process of recording the electronic document in the county records in its original digital form without breaking the document’s tamper seal. This is different than the form of electronic recording that exists in many jurisdictions today which simply involves uploading a scanned-in image of a paper document.

An eClosing is the electronic execution of some or all real estate closing documents in a secure digital environment.  eClosings allow for a more efficient and streamlined closing experience for sellers, borrowers, lenders, and third parties.

eClosings can occur in several different variations ranging from Hybrid eClosing to In-Person eClosing to Remote Online eClosing.  Key documents such as the promissory note and security instrument can be printed to paper and wet-signed, while other documents are signed electronically. Our website can provide you more information on the different types of eClosings.

eClosing real estate will provide many benefits including:

  • Electronic access to documents prior to the closing
  • Faster closings
  • Fast commission check for the real estate agent, typically

In an eClosing, whether hybrid, full or remote online, you will need an online platform to house documents electronically and to enable electronic signatures and electronic notarizations. These types of platforms are typically referred to as online collaboration platforms or digital closing platforms.

For more information on eClosing, please contact our eVolve team.

Knowledge of ALTA Endorsements Necessary For Texas Lawyers

Attorney’s clients don’t just do business in Texas or even regionally anymore, it seems everyone is buying, selling and developing real estate all over the country.  A Texas attorney may know the title insurance regulations and Basic Manual inside-out, but when they move to work in states that issue American Land Title Association (“ALTA”) forms, it can be a whole new ball game.

Texas attorneys know what types of coverage are available in Texas, but may get intimidated when looking at all of the coverages available in many ALTA states.  There are 107 ALTA approved Endorsement forms, many with variations for specific transactions.  Further, not all endorsements are available in every state issuing ALTA policies, so the task can be daunting.

The easiest way for a Texas attorney to understand many of the endorsements is to relate them to the coverages available in Texas, for example:

  • Texas Access Endorsement (Form T-23) insures unimpeded vehicular and pedestrian access to a parcel of real estate. The ALTA 17-06 Access and Entry Endorsement provides basically the same coverage, but ALTA sometimes takes it further, they also have an ALTA 17.1-06 which insures vehicular and pedestrian access through an indirect manner (i.e. an insured easement estate), and a 17.2-06 which insures what utilities are available to the property.  So, where Texas has 1 endorsement, there are 3 ALTA variations.
  • The Texas Form T-19, Restrictions, Encroachments and Minerals Endorsement provides the same coverage on a Loan Policy as the ALTA 9-06 endorsement. However, where Texas can modify or delete language from the T-19 that the underwriter is not willing to provide, ALTA has additional endorsements that provide lesser coverage or modified coverage;
  • Texas form T-19.1 Restrictions, Encroachments and Minerals provides similar coverage to the T-19 on an Owner Policy, but in ALTA, those coverages are all in separate endorsements, the Restrictions are covered in the ALTA 9.1 or 9.2, Encroachments in the ALTA 28 series of endorsements and Minerals in the ALTA 35 series of endorsements.
  • Texas T-38 Endorsement is used when Mortgages are being modified, ALTA has 3 versions of a modification endorsement, the ALTA 11-06 insures against loss by reason of invalidity or enforceability as a result of the modification and priority over intervening matters, while the ALTA 11.1-06 provides the same coverage as the ALTA 11 but also includes a statement as to specific subordinate items and the ALTA 11.2-06 provides the same coverage as the ALTA 11 but also increases the amount of the policy arising out of the modification.
  • Texas T-3 Assignment of Lien Endorsement insures the assignment document and down dates the policy to the recording of the assignment, the ALTA 10 insures the effectiveness of the assignment but does not down date the policy, while the ALTA 10.1 insures the effectiveness of the assignment and down dates the policy as to taxes, assessments, intervening defects, liens or encumbrances, recorded federal tax liens and bankruptcies.

However, ALTA has many more endorsements than Texas, and they get revised periodically, and several states modify the ALTA endorsements to comply with their state laws.  It’s impossible to keep up on all of the ins and outs of ALTA coverages and endorsements, so it’s important to have good resources to tap as you represent your clients.

One of the best ways you can do that is to have a good relationship with a national title insurance company which handles closings all over the country and are very familiar with the idiosyncrasies of the available coverages in other states.  Another great resource is a current ALTA Endorsement Manual.  First American Title Insurance Company and many other underwriters publish them annually.  You can access First American’s current manual through the Republic Title website. This guide will provide each endorsement form and give a brief explanation of its uses and the requirements for the issuance of each.

While the endorsement manual is very handy, attorneys need to understand that the forms can be modified in many states, either to comply with each state’s laws or to limit coverage as determined by their state title insurance associations or regulations.   There are also states that don’t use the ALTA forms (i.e. Texas, Pennsylvania, New York to name a few) but have produced their own forms.  In those instances, it’s great to have a National Underwriting Attorney or National Underwriter in your contacts that you can call to discuss the variations and availability in the state or region your client is working.

Expediting eClosing and RON in the Current Environment

There is no question that the current pandemic has significantly reshaped every aspect of our daily lives. When it comes to real estate closings, there is also no question that the need for contactless, virtual mortgage closings is real and urgent.  Before COVID-19, eClosings were growing at a modest pace as the industry collaborated on solutions to facilitate broader adoption, including acceptance of Remote Online Notarization (RON). Then everyone was told to stay home, and industry collaboration ignited with a new and passionate purpose.

As Harry Gardner, Executive Vice President of eStrategies for Docutech™, a First American® Company, pointed out in a recent HousingWire webinar, coronavirus has shifted the digital mortgage closing from a “nice-to-have” into a “must-have.” The number of settlement services providers offering digital mortgages has nearly doubled during the pandemic. The current environment has changed the RON eClosing debate from “Why should we do this?” to “How can we do this now?”

In response to the need to facilitate contactless real estate closings, governmental agencies, the GSEs, lenders, and settlement services are all moving with a new sense of urgency to enable borrowers to close on the home of their dreams easily via digital connections.

Fannie Mae and Freddie Mac announced expanded acceptance of RON-closed eNotes, now in 45 states plus the District of Columbia. A number of state governors signed executive orders permitting forms of RON, and pending RON legislation at the Federal level could make remote notarizations legal everywhere. More county clerks are getting on board with the idea that remotely notarized Deeds of Trust are legally valid and should be accepted for eRecording, a very significant step toward nationwide RON acceptance. This kind of progress on the state and local level is what we have been waiting for to truly achieve a paperless mortgage.

Perpetually focused on customer experience, Docutech offers RON capabilities within Solex eClosing.   Now, notaries can eSign and eNotarize documents remotely while the borrower benefits from the same streamlined experience application through closing. No need to meet in-person, secure and convenient.

One of the most important considerations for moving RON eClosing into mainstream operations is the concept of eEligibility. Mark Ladd, Vice President of Regulatory and Industry Affairs at Simplifile, explained the nuances of eEligibility, referencing the “three legs of the stool” as Recordability, Insurability, and Marketability. Understanding your recordability, knowing if the underwriter will insure the transaction, and, if you’re connected with Fannie Mae and Freddie Mac, knowing if they will accept that eNote in the secondary market. Understanding how “e” each transaction can be, as early in the process as possible, provides lenders with support for the three legs of the stool.

 Source:  https://blog.docutech.com/expediting-eclosing-and-ron-in-the-current-environment-what-you-need-to-know-now

Expediting eClosing and RON in the Current Environment – What You Need to Know Now

July 2020 DFW Area Real Estate Stats

The July 2020 DFW area real estate statistics are in and we’ve got the numbers! Take a look at our stats infographics, separated by county, with MLS area stats on each county report as well! These infographics and video are perfect for social sharing so feel free to post them!

To see past month’s reports, please visit our resources section here.

For the full report from the Texas A&M Real Estate Research Center, click here. For NTREIS County reports click here.

Texas Housing Insight – June 2020

Here is the June 2020 Summary from Texas A&M Real Estate Center.





Total Texas housing sales rebounded almost 30 percent after three straight monthly declines corresponding to the initial wave of domestic COVID-19 cases. Falling interest rates and pent-up demand from the economic shutdown supported sales in the existing-home market and for new homes priced less than $300,000, pushing the Lone Star State’s second-quarter homeownership rate up to record-breaking levels. Ongoing uncertainty surrounding the virus, however, dampened supply-side activity in the second quarter with reduced lot development in all the major metros except for San Antonio and downward-trending building permits and housing starts. Although the pullback in construction is likely to be temporary, the decrease will exacerbate already low inventory levels.

Home-price appreciation accelerated in June after slowing to start the quarter. Nevertheless, housing affordability improved during the low interest rate environment and overall moderate price growth. The Real Estate Center’s single-family housing sales projection suggests a complete recovery in single-family homes sales will be reflected in July numbers. COVID-19 remains the greatest obstacle to the Texas housing market, and the resurgence in contracted coronavirus cases and hospitalizations in July could reverse progress.

Supply*

The Texas Residential Construction Cycle (Coincident) Index, which measures current construction levels, dipped slightly as construction values fell and hiring slowed. On the other hand, the Residential Construction Leading Index almost reached the post-recessionary high from December as interest rates continued to decrease and permits and housing starts picked up, suggesting positive momentum in the next few months. At the metropolitan level, Austin was the only major metro where the leading index decreased, pulled down by multifamily building permits.

According to Metrostudy, activity at the earliest stage of the construction cycle picked up slightly as the number of new vacant developed lots (VDLs) in the Texas Urban Triangle increased 3.5 percent quarter over quarter (QOQ). All of the second-quarter upturn, however, is due to VDLs in San Antonio more than doubling, with the $200,000-$300,000 price range accounting for most of the rebound. Houston and Austin’s 14.7 and 20.7 percent declines, respectively, kept total VDLs in negative YTD growth territory. The metric in Dallas-Fort Worth (DFW) ticked down 2.9 percent QOQ but the decrease slowed.

Despite sluggish activity to start the second quarter, single-family construction permits remained on track to exceed last year’s total after recovering 14.6 percent in June. Texas remained the national leader, contributing 16 percent of the national total. Nonseasonally adjusted permits increased to 1,105 and 4,028 in Fort Worth and Houston, respectively, almost reaching peak levels after accounting for seasonality. San Antonio permits rose to 889, while Austin and Dallas issued 1,540 and 2,358 permits, respectively. On the other hand, Texas’ multifamily fell 22.1 percent, declining for the third consecutive month.  

Total Texas housing starts rebounded 27.9 percent on a monthly basis but extended a downward trend. MetroStudy data revealed less than 26,000 single-family homes broke ground in the Urban Triangle during the second quarter, a 4.3 percent decline. Houston accounted for most of the decrease, with starts sinking 16.3 percent QOQ. The San Antonio metric fell for the second straight quarter, but activity in the $500,000-and-higher price range accelerated. In Austin and Dallas, however, starts increased 1.4 and 4.7 percent QOQ, respectively, with improvement in North Texas widespread.

After a brief reprieve in May, single-family private construction values decreased for the third time in four months, declining 18.8 percent. Quarterly construction values dropped across all four major metros due to the effects of the pandemic, ranging from a 22.75 percent plummet in DFW to 30.1 percent in Houston.

A dwindling supply of active listings and a resurgence in home sales pulled Texas’ months of inventory (MOI) down to an all-time low of 2.8 months. A total MOI around six months is considered a balanced housing market. Inventory for homes priced less than $300,000 was even more constrained, sliding below 2.1 months. The MOI for luxury homes (homes priced more than $500,000) also decreased, falling to 7.2 months.

Austin and San Antonio posted record-low inventories of 1.6 and 2.6 months, respectively. The MOI in Dallas declined to 2.3 months, while the Fort Worth metric dropped to 2.1 months. Only Houston maintained a MOI above the state average at three months.

Demand

Pent-up demand and record-low mortgage rates pushed total housing sales up 29.4 percent in June. Improvement stemmed from a pickup in existing-home sales transactions as activity in the new-home market stalled after a year of solid growth. Sales accelerated more than 6 percent QOQ for new homes priced less than $300,000, but the $400,000-and-higher price range took a large step back. The divergence exemplifies the increasing demand for more affordable homes as many millennials become first-time homebuyers.

Fluctuations in second-quarter new-home sales varied across the major metros. Houston posted its sixth consecutive improvement, pushing transactions to 8,732. San Antonio new-home sales rebounded 16.1 percent QOQ to 3,640 after faltering to start the year. Although activity in DFW decreased during the second quarter, North Texas remained the top market with 9,100 transactions. Austin extended a downward trend, selling only 4,736 new homes after reaching an all-time high in 4Q2019.

Despite falling sales in April and May, Texas’ 2Q2020 homeownership rate rose its highest level on record (beginning 1996) at 67.5 percent, lessening the gap between the national rate to only half a percent, the smallest in eight years. National homeownership rates were higher across all races, including minorities. At the metropolitan level, Austin registered the greatest increase in homeownership, rising almost 6 percentage points to 65.3 percent. The metric in DFW and San Antonio ticked up to 64.7 and 66.2 percent, respectively. Houston boasted the state’s highest percentage of occupied housing units that were owner-occupied at 68.2 percent. Homeownership, however, could suffer as COVID-19 foreclosure-protection policies expire.

Approximately two months after the forced economic shutdown, Texas’ average days on market (DOM) inched up to 64 days, at least partially due to slower activity during April. The major metros recorded softer demand. Houston and San Antonio’s metrics exceeded the state average, rising to above 64 and 65 days, respectively. The average home in North Texas sold after 59 days in Dallas and 51 days in Fort Worth. Austin was the exception, as the DOM decreased to 53 days compared with 57 days this time last year.

Continued uncertainty stemming from the ongoing spread of the coronavirus pandemic kept interest rates at historically low levels, although increased oil prices slowed the downward slide. The ten-year U.S. Treasury bond yield ticked above 0.7 percent, but the Federal Home Loan Mortgage Corporation’s 30-year fixed-rate sank below 3.2 percent for the first time in series history (starting in 1971). Mortgage applications for home purchases rose 9.8 percent, jumping into positive YTD growth territory. Refinance activity decreased for the third straight month but remained at levels one-and-a-half times greater than at year-end.

Elevated volumes of mortgage applications corresponded to falling Texas mortgage rates. (For more information, see Finding a Representative Interest Rate for the Typical Texas Mortgagee.) In May, the median back-end debt-to-income ratio (DTI), loan-to-value ratio (LTV), credit score, and interest rate constituting the “typical” conventional-loan Texas mortgage were 36.10, 85.57, 747, and 3.35 percent, respectively. The typical Texas borrower who obtained a loan from a government-sponsored enterprise had a DTI of 36.14 and LTV of 87.49 while receiving an interest rate of 3.45 percent.

Prices

The Texas median home price jumped 3.9 percent to $249,100 in June after subdued growth to start the second quarter. Annual price appreciation accelerated 4.2 percent. Movements in metropolitan median prices moved similarly to statewide fluctuations, with Austin’s metric leading the state at $324,700. The median price shot up to $298,800 in Dallas and exceeded $250,000 in Fort Worth and Houston. San Antonio’s median home price increased to $240,800.

The Texas Repeat Sales Home Price Index, a better measure of changes in single-family home values, provides insight into how Texas home prices evolve. The index corroborated healthy price appreciation, rising 4.5 percent YOY. The metric in North Texas also advanced, jumping 3.1 in Dallas and 4.3 percent in Fort Worth. The Austin and Houston indexes slowed but maintained healthy growth of 5.6 and 2.6 percent, respectively. Meanwhile, price appreciation in San Antonio stabilized at 3.5 percent.

Slower home-price growth and historically low interest rates increased housing affordability in Texas’ major metros during the second quarter. Houston and Fort Worth were the most affordable locales, with both indexes climbing to 1.8, indicating that a family earning the median income could afford a home 80 percent more than the median sale price. The metric in Austin and Dallas registered double-digit YOY gains, exceeding 1.7 and 1.6, respectively, with the former posting a five-year high. Meanwhile, San Antonio’s index rose steadily to 1.7. Continued improvement is important to Texas’ demographic advantages that have supported the state’s economic prosperity over the past decade.

Single-Family Forecast

The Real Estate Center projected single-family housing sales using monthly pending listings from the preceding period (see Table 1). The Center projected only one month in advance due to uncertainty surrounding the COVID-19 pandemic and the availability of reliable and timely data. Sales are expected to rebound completely from the pandemic-induced shutdown in July. Texas single-family sales are estimated to increase 22 percent, while Houston should outshine the other metros with 25.2 percent growth. In Austin and Dallas, single-family sales are projected to bounce back 24.6 and 22.6 percent, respectively. San Antonio’s improvement is forecasted to be slightly lower than state’s at 17.8 percent but still sizeable nonetheless. Texas’ housing market recovery has so far outpaced its labor market’s less steady comeback.

________________

* All measurements are calculated using seasonally adjusted data, and percentage changes are calculated month over month, unless stated otherwise.

Source – James P. Gaines, Luis B. Torres, Wesley Miller, Paige Silva, and Griffin Carter (August 12, 2020)

https://www.recenter.tamu.edu/articles/technical-report/Texas-Housing-Insight

6 Ways To Grow Your Real Estate Business By Using LinkedIn

LinkedIn is one of the most under-rated but highly valued networking sites you can be using in 2020!  The most important thing to remember about LinkedIn, at its core, it is an online resume.  It’s also likely to be among the first handful of results to come up on a Google search, and might be the first place a potential client looks to review your credentials.  Most clients won’t choose a real estate agent who appears to lack knowledge, education and expertise.  So it’s wise to set yourself up for success and utilize this powerful tool.

So, YES, LinkedIn is extremely important and a must-have in today’s digital world.  It’s also the perfect place to promote yourself, your real estate listing, and boast about the skills you bring to the table.

Here are the top 6 things you should focus on with LinkedIn:

  • Your Profile:

Fill out each section to include all levels of education, all accreditations and current and past positions.  Include a high quality professional photo of yourself.  Be sure to include a LinkedIn Banner image that includes a call-to-action (your phone number, your email, etc).  Your headline should be catchy and stand out.  Be sure to fill in your summary section to include real estate listings and other statistics that will jump out to potential clients.  Be sure to use keywords or phrases (real estate, real estate agent) throughout your headline and your summary to increase search engine optimization.  Also encourage previous clients to give you a recommendation so your LinkedIn profile is a non-stop shop for anyone who comes across it.  Upload videos and links to enhance your profile.  Customize your URL and use it everywhere (advertising, business cards, posts, etc).

  • Connections:

61% of real estate agents on social media view it as a way to connect to the community.  LinkedIn revolves around businesses, employees and their connections, so it’s the perfect network for real estate agents who work in an industry predicated on connections, referrals and being involved in the community.  Reach out to everyone in your sphere, alums, etc.  Remember LinkedIn is the best social media platform for professional networking, which means connect with everyone.  Take advantage of the biggest networking platform ever!

  • Content:

This is where many real estate professionals go wrong.  What doesn’t work is just content about listings (remember the 80/20 rule) in hopes of generating sales leads.  What does work is highlighting your professional experience, education and network strength.

Try these 6 content ideas to maximize your effectiveness on LinkedIn:
    1. Share real estate news, industry updates or trends.  Don’t forget to include a caption with your thoughts and opinions as well as a call to action soliciting others opinions and thoughts.  Remember, it’s about engagement so ask questions.
    2. Share information or updates about your local city.  Remember people are very patriotic when it comes to the city they live in, so find local information to share.  Also, now that LinkedIn allows the use of hashtags, include local hashtags in all your posts so anyone searching for that hashtag might come across you, and in turn check out your profile.
    3. Thoughtful and conversational posts.  Try something that will resonate with others such as your struggles, wins, inspiration, or something you overcame.  These are going to be the best conversation starters you can share on LinkedIn.  As real estate agents, you go through a lot, so sharing that will resonate with your audience.
    4. Networking events you’ve attended.  Include connections you made and give them an @mention, photos, food, the service, highlight the event, the vibe and your takeaways.  It shows your connecting with people in your local city.  Often times you’ll hear people say, it’s not what you know, it’s who you know.  That’s why this works.
    5. Native video uploads.  Every platform, whether it’s Facebook or Instagram, wants you to use the video feature that is native inside the program.  This doesn’t mean go to YouTube and share it to LinkedIn.  It means, open up a post on LinkedIn and use their Video icon and shoot native video within LinkedIn.  This will keep connections engaged longer in the LinkedIn program and hopefully on your profile.  Our best recommendation for video ideas would be “value added” for the consumer (i.e., Buyer/Seller Tips, Market Updates, community highlights, business you’ve interviewed, etc.).
    6. Write LinkedIn Articles.  When you write an article on LinkedIn, everyone in your connection list receives a notification.  You couldn’t ask for better advertising than that.  If you are a blogger, this is a perfect place to use the content you’ve already created and post it within LinkedIn as an article.

So, take the time, get your profile set up for success, start connecting with former and current clients, friends, colleagues, etc. and work on creating great content.

Instagram Tips for Your Real Estate Business

One of Republic Title’s most popular CE classes is consistently our “Instagram: I Have An Account, Now What?” class. We all know how important it is to have a presence on social media for your real estate business, but how do you create content, know which hashtags to use and most importantly, connect with buyers and sellers? Our technology trainer Annette Carvalho is here to help! Read on for Annette’s top takeaways from our popular class and visit us at www.republictitle.com/residential-education for a full list of upcoming CE classes.

Use Hashtags and Link to your Website

  • Using the “Stair Step” approach, users can spread out hashtags using the Stair step approach (hashtags with lower #’s mean you might be seen more.  So if you did 27 hashtags (which we don’t necessarily recommend) use nine that have 0-50K followers, nine with 50K-100K followers, and nine with 100-250K followers, etc.
  • Make sure to include contact information – including your website – in your Instagram bio.

Use Instagram Stories

  • Instagram Stories are temporary and only hang around for 24 hours. This allows you to post lots of content without bombarding your followers. And your followers are watching! According to embedsocial.com, Instagram stories are used by 500 million users every day.

Connect with your sphere by turning on “Post Notifications”

  • Because Instagram is always changing their algorithmic feed, you may not see everyone that you follow consistently. Make sure to turn on Post Notifications for the accounts that you want to make sure and see. This allows you to respond to their posts in a timely manner.

Use Direct Messages

  • Did you know that you can direct message up to 50 people at a time?

GeoTag your Posts

  • Searching by “Places” is an entire search category on Instagram. Make sure you are using this feature!

Use Instagram Live

  • This is a powerful tool that Instagram is promoting – you will reach more of your audience using Live since Instagram features those videos in a different way.
  • A best practice in using Instagram Live is to promote your live video in advance with email or Facebook. For example: “Catch me LIVE on Instagram Friday at 10am where I will share my 10 biggest tips for getting your home ready for the market.”

For MUCH more on Instagram, social media and other technology trends, sign up for one of our CE classes at www.republictitle.com/residential-education

Helpful Terms for Buying/Selling Your Home

Buying or selling a home is one of the most important undertakings of a lifetime. When buying or selling a home, there are many real estate terms that may be unfamiliar to you. Check out this list of commonly used terms that you may find helpful during the process.

AIR:  Adjustable Interest Rate

AMORTIZATION SCHEDULE: A schedule showing the principal and interest payments throughout the life of the loan.

APPRAISED VALUE: An opinion of the value of a property at a given time, based on facts regarding the location, improvements, etc. of the property and surroundings.

CD/CLOSING DISCLOSURE: This form is a statement of final loan terms and closing costs. Sometimes referred to as ICD or Integrated Closing Disclosure.

COMMITMENT:  The document by which a title insurer discloses to all parties connected with  a particular real estate transaction all the liens, defects, and burdens and obligations that affect the subject property.

CREDIT REPORT: A report on the past ability of a loan applicant to pay installment payments.

DOCUMENT PREPARATION FEE: A charge by an attorney for preparing legal documents for transaction.

ESCROW FEE: A fee charged by the title company to service the transaction, to escrow monies, and cover documents. Usually split between buyer and seller.

ESCROW ACCOUNT: Funds held by the lender for payment of taxes and insurance when due. Usually does not include maintenance fees.

HOA ASSESSMENT FEES: Charged by the homeowner’s association as set out in subdivision restrictions.

HOMEOWNER’S INSURANCE:  Protects the property and contents in case of loss; must be for at least the loan amount or for 80% of the value of the improvements, whichever is greater.

INSPECTIONS: An examination of property for various reasons such as termite inspections; to see if required repairs need to be made before funds are received, etc.

INTEREST: Money paid regularly at a particular rate for the use of money lent.

LOAN TITLE POLICY: Required by the lender to insure that the lender has a valid lien; does not protect the buyer.

ORIGINATION FEE:  A fee the buyer pays the lender to originate a new loan.

OWNER’S TITLE POLICY: Insures that the buyer has title to the property, that there are no other claims as to ownership. Among other matters, it also insures access to the property, the right to occupy the property, good and indefeasible title, and that there are not other types of specific liens against the property. 

POINT:  1% of the loan amount.

PREPAIDS: Items to be paid by the buyer in advance of the first scheduled payment of the loan (Homeowner’s Insurance Premium, Mortgage Insurance Premium, Prepaid Interest, Property Taxes and a maximum of three additional items).

PREPAYMENT PENALTY:  Charged by the lender for premature payment of a loan balance.

PRIVATE MORTGAGE INSURANCE: Insurance against a loss by a lender (mortgagee) in the event of default by a borrower (mortgagor).

REALTOR FEES:  An amount paid to the REALTOR® as compensation for their services. RECORDING FEES: Charged by the County Clerk to record documents in the public records. RESPA:  Real Estate Settlement Procedures Act.

RESTRICTIONS: Certain limitations or conditions related to the future use of the property put on the property by a prior owner. These restrictions stay with the property until they expire or are amended as per certain procedures set forth in the restrictions.

SURVEY:  Confirms lot size and any encroachments or restriction violations.

TAX CERTIFICATES: Certificates issued by taxing authorities showing the current year’s taxes, the last year the taxes were paid, and any delinquencies to be collected at closing.

TAX PRORATION: Means that the payment of the taxes for the year of sale are divided between the Buyer and Seller, usually based on the amount of time the Seller owned the property during that year. Prorations, and how they are calculated, are typically addressed in the Contract of Sale.

TIL:  Truth in Lending.

TIP: Total Interest Percentage; the total amount of interest the borrower will pay over the loan term as a percentage of the loan amount.

TOTAL OF PAYMENTS: Total amount paid after all payments of principal, interest, mortgage insurance and loan costs are scheduled. 

To download our Helpful Terms for Buying/Selling Your Home flyer,  visit Helpful Terms for Buying and Selling Your Home.