A Pocket Guide to the Self-Storage Real Estate Closing Process

By Stephen Grossman Comments
Print
Continued from page 1

The Broker's Duties

The real estate broker has specific duties to perform, which include but are not limited to:

  • Ensure the contract is properly executed.
  • Confirm all necessary disclosures have been given to the parties.
  • Make sure the legal description of the property is correctly documented in the purchase agreement.
  • Confirm contingencies in the contract are worded correctly and understood.
  • Contact the escrow/title company when the property is under contract.
  • Deposit or forward to escrow any earnest deposit.
  • If attorneys are involved, create a punch-list of mutual responsibilities.
  • Communicate all information to the attorneys and escrow officer to avoid ambiguity.
  • Assist the buyer, as necessary in obtaining financing.
  • Work with the escrow officer in distributing the title documents to all parties.
  • Get a copy of the seller’s existing mortgage account number and lender information.
  • Forward copies of the current title insurance policy information to the escrow officer and attorneys.
  • Current title policies may save time and money for the buyer.

The Title Company's Duties

The title company will be responsible for searching the title and determining any legal issues regarding conveying title to the new buyer. Title will list all relevant facts and provide them to the parties. Title search is conducted to historically trace the ownership of title through every available public record. The search will determine if the owner has legal ownership and the right to sell the property.

A title-company examiner will search the records of the county recorder and assessor as well as any other government taxing agencies to locate documents that may affect title. The examiner has four primary goals to meet:

  • The exact description of the property
  • The estate or interest in the property
  • The vesting of the estate or interest
  • The exceptions (liens, encumbrances and defects) affecting the current vested interest

The search will also disclose any deficiency on the title. The results are compiled in a preliminary title report or “prelim.” It reflects the conditions under which a title company would be willing to issue title insurance.
It’s important to clear any title issues, and a new title report should be issued, removing any questionable items. Ask for a revised copy of the title report showing the clear title. If money is owed and it appears on title, creditors should agree to release their claim subject to the debt being paid at the close of escrow.

Problems also can arise in the tax description of the property or land. Minor discrepancies between the tax description and the survey is normal, but significant differences will be problematic.

One of the more important aspects of closing the deal is determining how you take title to the asset. Not only does it establish how you’ll be insured, it has important legal and tax consequences. Get professional advice to ensure you’re proceeding correctly.

Comments
comments powered by Disqus