Residential Real Estate FAQs
Most people have a great many questions about purchasing real estate, especially if it is their first time. We have put some answers to these questions on this page, but we understand that you probably have more questions. Don’t hesitate to contact our attorney at The Jorgensen Law Firm, LLC, with any additional questions regarding a residential real estate transaction.
Do I need to hire a lawyer to buy a home?
Having a lawyer handle your real estate closing is required in Connecticut. Working with our attorney can help make the process go smoothly and reduce your stress. Purchasing a home is a significant investment, likely the largest purchase most individuals make in a lifetime. It is also the most complex.
We review all the documents and engage in the necessary due diligence to ensure that you have a clear title and that there are no misrepresentations within the paperwork. We can review the financing and assist if you need help in securing financing. We provide knowledgeable assistance when problems develop, working to help resolve any issues that occur during the purchase or sale of the property.
What is a ‘clear title’?
The title to land is the document that indicates the owner of the property. Because real property can be ‘encumbered’ with creditor’s liens or levy, the title would not be ‘clear’ as encumbrances are recorded on the title.
This is the purpose of a title search, as banks and other lenders will require that there is a clear title before they provide a mortgage.
What is title insurance?
Title insurance is used to protect buyers in the event that the property they purchase has a ‘cloud’ on the title. A cloud on a title means there is a lien, a levy, an encumbrance or other defects, such as fraud or undisclosed heirs on the title, that interfere with the transfer to the new owner.
The bank wants to ensure that it receives its payment for the loan or mortgage, so it demands that there is a clear title or, if there is a defect, that the title insurance can cover the cost of any title defects. Our attorney can help you decide if you need your own title insurance policy in addition to the bank’s policy.
What is a mechanic’s lien?
A mechanic’s lien is placed on the property, typically by the contractor, when work is done on the property. If you remodel your bathroom, paint the home or put on a new roof, the contractor or subcontractors are likely to place a mechanic’s lien on the title to the property for the amount of their work.
If you fail to pay their bills, the lien will remain on the title and it is unlikely that you will be able to sell the property until the lien is ‘cleared’ as it creates a cloud on the title and no finance company will provide money for a mortgage until the title is clear by paying off the lien.
What is ‘escrow’?
Escrow is an account used to hold money, typically your ‘earnest money’ and then after the closing, the money for your property taxes and homeowners insurance. These accounts are used to ensure that your taxes are paid and that the property is insured.
This is required by your lender, and the amount will depend on the value of your property, which means this number may change from year to year as property taxes and insurance go up or down.
We know that you have more questions about your real estate closing and other related real estate issues. Call our Hartford office at 860-856-8397 or use our online contact form to schedule a consultation.