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Learning Center

Real estate transactions are challenging and complicated

At CalAtlantic Title,

we are dedicated to providing educational resources for our real estate agent, lender, homebuilder, homebuyer and seller customers to make the process a little easier to navigate.

Check out these downloadable flyers.

 
FRAUD PREVENTION

Fraud in a real estate transaction has the potential to affect every participant. The best defense is vigilance and a determination to TRUST, BUT VERIFY when suspicions arise. Our agents discuss the money transfer protocols with all parties prior to the transaction. If you receive an email from any of the parties altering those agreed-upon protocols, do NOT respond to the email or click on any links it contains. We never email financial information and always call the involved parties to verify requests using the number we have on file.

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OWNER'S TITLE INSURANCE

A title agent is trained to identify the rights others may have in your property, such as recorded liens, legal actions, disputed interests, rights of way or other encumbrances on your title. Before closing your transaction, the title company “clears” those issues. Although a thorough search of the records is made before the transfer of property, fraud, unforeseen events and human error make 100 percent risk elimination impossible. A mortgage lender will require you to purchase title insurance to protect the lender’s investment, but Lender’s Title Insurance does not protect you. Owner’s Title Insurance is one of the most important and affordable protections you can buy. For a one-time fee paid at closing, it protects you for the entire time you own the home.

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PREPARING FOR CLOSING

The closing or sign-off of a real estate transaction may be delayed by a number of inadvertent missteps that can be prevented. In preparation for the closing, make sure all required forms are turned in and the escrow officer is informed of any changes. Also let the escrow officer know if there are any special circumstances, like the inability of a required signer to attend the closing, the intention to use a Power of Attorney, or if the seller is a foreigner. On the day of the closing, make sure you have everything you need including proper identification and the necessary funds to close.

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1031 EXCHANGE

A like-kind exchange is permitted under Section 1031 of the U.S. Internal Revenue Code if it is an arms-length transaction, meaning the seller or exchanger never has access to the proceeds from the sale. It allows an investor who holds property “for productive use in trade or business or for investment” to sell that property and purchase another like-kind property without paying capital gains taxes on any appreciation realized in the sale of the first property. There are several requirements that must be met to ensure the exchange is protected under IRC Section 1031.

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FIRPTA

The Foreign Investment in Real Property Tax Act (FIRPTA) regulation requires the Buyer of U.S. real estate interests owned by a foreign Seller to withhold 10-15 percent of the amount realized from the sale, unless certain exemptions are met. The withholding takes place at the closing, and the Escrow Officer or Settlement Agent remits the funds to the Internal Revenue Service (IRS). It is imperative that the Seller address this issue, long before the closing. Contact an accountant or attorney to review options to avoid delays at the closing.

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HOW TO TAKE TITLE TO REAL ESTATE

There are various ways to hold title to property, and the laws vary by state. This is a decision you will be asked to make before you can purchase your new home. In general, property can be held by a single individual, often called Sole Ownership; by two or more persons, such as Joint Tenancy, Tenancy in Common, Tenancy in the Entirety or Community Property; or by an entity, such as a trust, a corporation or a partnership. This decision has many legal ramifications that can affect you and your heirs. Please seek legal advice before making this decision.

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