Overview - Acquisition Services
What are the basics?
When a corporation decides to move an employee, the corporation or the corporation’s third party company, will order what is called a “preliminary title” on the employee’s home.
The title report is either ordered through a title company or an attorney, depending on the state where the property is located. Sometimes, the title company (attorney) will order an update to the abstract of title (history of the property). The abstract will have an attorney’s opinion of title. Both a title report and an abstract (attorney’s opinion of title) accomplish the same goal.
This report will show the “condition” of the title to the property including:
1. Who is in title to the property? (Who owns it?)
2. Are there any liens on the property such as a mortgage?
3. Are there any other liens on the property such as real estate taxes?
4. Anything else that could “cloud” the title to the property and make it so “clear” title cannot be given to a buyer to the property?
The corporation wants to know that if it does a buyout with the employee or allows the employee to participate in an Amended Value program, that the corporation has received “clear” title to the property that can then be passed on to the outside buyer.
If the title report shows anything other than the employee being in title to the property, the mortgages that the employee has disclosed, and current real estate taxes, the title will have to have curative work done to it. Sometimes, this curative work is quick; other times, it can be both quite lengthy and costly (i.e. litigation involving condominium or homeowner association).
From this title report, transfer documents (a deed, power of attorney, affidavits, etc.) are drafted for the employee’s (and spouse’s, if applicable) signature. These are held until closing with the outside buyer.
The title is updated at the time of the actual closing with the buyer of the property and the transfer documents are used to transfer title to the new buyer.
What are the basics?
When a buyer and a seller enter into a contract of sale for a home, a closing must take place between the two. This will entail transferring title to the buyer and having the buyer and seller finalize the financial aspects of the deal.
When a buyer and seller have both met the requirements of the contract of sale between them, they will close the deal. This closing, dependent on the state and local custom, could be a physical meeting of the buyer and seller and representatives of both (a table closing) or it could be an escrow closing (buyer and seller both complete the paperwork necessary to finalize the deal, the buyer and buyer’s lender deposit funds needed to purchase the property, and the seller deposits the deed transferring title to the buyer into escrow). In some cases, the buyer and seller will also have legal representation during the finalization of the contract and the closing itself.
At the time of closing, the buyer’s and seller’s cost of the sale are itemized in a HUD-1 Settlement Statement. This statement will detail the buyer’s and seller’s credits and charges as they relate to the contract and to each other as well as the buyer’s lender. Additional charges or credits to the buyer or seller include tax adjustments, HOA adjustments, title charges, real estate commission fees, etc.
Normally, the buyer will have to bring in money at the time of closing to pay to the seller and the seller will receive money from the buyer. In down real estate markets, the seller may actually have to bring money to the closing to settle up the difference between what the house has sold for and the seller’s costs together with any mortgage payoff on the home.
Closings traditionally take place at real estate offices, title company offices, attorney offices, or escrow company offices, which also handle escrow closings via mail.
What’s Unique about Chicago?
Chicago is blessed with many seasoned relocation professionals at major corporations as well as some high quality companies that specialize in providing professional, customer oriented title and closing services.
Please check www.crcchicago.org and click “Service Providers”, then “Acquisition Services”.
Authored by: Laura J. Henneberry CRP, GMS
Morreale Real Estate Services, Inc.