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New York Real Estate for Brokers, 5th e

New York Real Estate for Brokers, 5th e. By Marcia Darvin Spada Cengage Learning. Chapter 7. Conveyance of Real Property and Title Closing Part II: Title Closing. Chapter 7 Key Terms. Abstract of title Accretion Acknowledgment Actual notice Adverse possession Assessment

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New York Real Estate for Brokers, 5th e

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  1. New York Real Estate for Brokers, 5th e ByMarcia Darvin Spada Cengage Learning Chapter 7.2 Title Closing

  2. Chapter 7 Conveyance of Real Property and Title Closing Part II: Title Closing Chapter 7.2 Title Closing

  3. Chapter 7 Key Terms • Abstract of title • Accretion • Acknowledgment • Actual notice • Adverse possession • Assessment • Bundle of rights • Chain of title • Closing statement • Constructive notice • Conveyance • Credits • Debits • Dedication • Delivery and acceptance • Erosion • Escheat • Executor/executrix Chapter 7.2 Title Closing

  4. Chapter 7 Key Terms (continued) Full covenant and warranty deed Habendum clause Intestate Involuntary alienation Lien foreclosure sale Marketable title Proration Quitclaim deed Real Estate Settlement Procedures Act (RESPA) Reconciliation Survey Tacking Testate Title Title closing Title insurance Title search Voluntary alienation Chapter 7.2 Title Closing

  5. Those Present at Closing Seller Buyer Real Estate Agent Title company rep Lender’s, buyer’s and seller’s attorney Chapter 7.2 Title Closing

  6. Deed and Other Closing Documents Chapter 7.2 Title Closing

  7. Wood Eating Insects Chapter 7.2 Title Closing

  8. Role of Licensee Before Closing • Buyer has a final walk through on the day before closing or immediately before closing • The buyer agent (if there is one, or seller agent usually accompanies the parties • Broker commission generally paid at closing Chapter 7.2 Title Closing

  9. NYS Commission Escrow Act • The Commission Escrow Act (2009) applies to one-to-four unit residential properties • And individual condominiums and cooperatives sold by real estate brokers and sales agents • Protects the broker’s real estate commission when a seller does not pay the full commission upon closing Chapter 7.2 Title Closing

  10. Homeowner’s Insurance • Protects home or income/business against damage or loss in case of fire, theft or vandalism • Two types of property insurance • Section I covers property • Section II covers liability Chapter 7.2 Title Closing

  11. Standard Homeowner’s Policies • Homeowners-1 (HO-1) insures home and contents • Homeowners-2 (HO-2) insures home and contents from additional perils • Homeowners-3 (HO-3) covers home for most risk of physical loss • Homeowners-5 (HO-5) same as HO-3, plus personal possessions covered for most losses Chapter 7.2 Title Closing

  12. Standard Homeowner’s Policies • Homeowners-8 (HO-8) provides actual cash value coverage in place of replacement cost coverage for a building • Tenants or Coop Owners (HO-4) reimburse tenants for increases in living expenses if home becomes inhabitable • Condo Unit Owners (HO-6) insure against damage to contents of apartment plus liability Chapter 7.2 Title Closing

  13. Real Estate Settlement Procedures Act (RESPA) Chapter 7.2 Title Closing

  14. Possible Seller Closing Costs Chapter 7.2 Title Closing

  15. Existing Liens Mortgages Real Property tax liens Mechanic’s liens Chapter 7.2 Title Closing

  16. Possible Purchaser Closing Costs Appraisal/credit report fees Structural and other tests/inspections NYS Mortgage Recording Tax Returns Title Insurance Attorney fees Lender fees (escrow account, discount fees, loan origination fees, mortgage insurance) Survey (sometimes paid by seller) Homeowner’s insurance Chapter 7.2 Title Closing

  17. Purchaser Closing Costs for a Condominium Chapter 7.2 Title Closing

  18. Debits and Credits Chapter 7.2 Title Closing

  19. Calculating Prorations A closing is held September 15th. The annual property taxes of $6,000 have been paid. What will the entry for the seller be on the closing statement? 6,000 ÷ 12mos = $500 8 mos x $500 = $3,500 500÷2 = $250 $250 + $3,500 = $3,750 Credit to seller: $3,750 Chapter 7.2 Title Closing

  20. Prorations at Closing A sale is closed August 23, with the real estate taxes of $600 per year unpaid. What is the entry on the closing statement? $600 ÷ 12 = $50 per month $50 x 7 mos = $350 $50 ÷ 31 days =$1.6129032 per day $1.6129032 x 23 days = $37.096773 =$37 rounded $350 + $37 = $387 debit to seller Chapter 7.2 Title Closing

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