THE COMPANY YOU CAN TRUST

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2 THE COMPANY YOU CAN TRUST Making many parts mesh to run Like Clockwork is the job of every real estate professional, and it has been a North American Title Company tradition for more than 60 years. That history of performance is part of your assurance that North American Title will deliver what you need on time, every time. North American Title s nationwide network of offices gives us insight into local conditions and situations, and provides the basis for personalized service that is responsive, capable and flexible. Our size enables us to put customized systems and personnel to work on your behalf; our local presence lets you work with someone who knows you and the challenges of your area. Our premier status in the industry enables us to attract associates whose capabilities and commitment help us set the standard against which all others are measured. As we continue our rapid growth throughout the country, we invest the time and effort needed to attract and retain the human resources that are the foundation of our success. Our associates have the company support, the ability, the knowledge, and the attitude that results in better service for you. We hire only the best associates because we are uncompromising in our intent to deliver only the best service. Our people add value to every North American Title transaction. Our commitment to you is a commitment from every associate at North American Title. We combine a carefully chosen team, superior resources and an unyielding commitment to quality. The result for you Like Clockwork.

3 Table of Contents Home Buyer s Guide Title Insurance: Where Does Your Dollar Go? 4 What Do Your Closing Costs Cover? 5 Common Forms of Nevada Residential Ownership 6 Common Ways of Holding Title 8 Title Policy Comparison Chart 9 Nevada Branch Locations 10 Statement of Information 11 What Is Escrow? 12 The Good Faith Estimate (GFE) 13 What an Escrow Holder Does and Does Not Do 15 The Escrow Process 16 Who Pays What? 17 Successful Closings 18 Nevada Annual Property Tax Calendar 19 Avoid Property Tax Penalties 20 Moving Checklist 21 Your Guide to Real Estate Terminology 22 Why a Home Warranty? 25 Why a Home Inspection? 26 Important Numbers Las Vegas 27 Important Numbers Washoe County 28 3

4 TITLE INSURANCE: Where Does Your Dollar Go? It pays for legal interpretation Title insurance, unlike property or casualty insurance, operates under the theory of risk elimination. Title companies spend a high percentage of their operating income each year collecting, storing, maintaining and analyzing official records for information that affects title to real property. Their technical experts are trained to identify the rights others may have to 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. In fact, according to the American Land Title Association, more than one-third of all title searches reveal a problem that title professionals fix before you go to closing. It pays to identify and eliminate potential risk Most other types of insurance anticipate losses and collect premiums based on a certain number of claims that will be made over time. Instead, title insurance premiums are paid to identify and eliminate potential risks and claims before they happen. In addition, title insurance involves a one-time premium, paid when you close the real estate transaction, while property, casualty and medical insurance require regular renewal premiums. It pays for research and claims management The goal of title companies is to conduct such a thorough search and evaluation of public records that claims will never arise. Of course, we live in an imperfect world where human error and changing legal interpretations make 100 percent risk elimination impossible. So when claims arise, professional claims personnel are assigned to handle them according to the terms of the existing title insurance policy. It pays for property plant resources In Nevada, most title companies have access to computer-based title plant systems that speed the delivery of the title search to the customer. This investment in skilled personnel and advanced data processing represents a major part of the title insurance premium dollar. Proper title plant maintenance, research, evaluation and legal interpretation are the foundations upon which a title policy rests. That is where most of your dollar goes when you pay for title insurance at your closing. Title Insurance rates are filed with the Nevada Division of Insurance, and each company is required to publicly post its schedule of fees. As in all competitive business environments, rates vary from company to company, so you should make comparisons before deciding on a particular title company. In addition, there are many helpful customer services provided by title companies that you and your real estate professional may find beneficial to your transaction. 4

5 What Do Your Closing Costs Cover? When you apply for your loan, you will receive a Good Faith Estimate of Settlement Charges and a booklet explaining these costs in detail. In addition, North American Title personnel will review and explain your settlement statement when you are ready to close your transaction. Here are some closing costs you may incur on the purchase of your home. }} Loan origination fee This fee covers the lender s administrative costs in processing the loan. It is a onetime fee and is generally expressed as a percentage of the loan amount. }} Loan discount Often called points, a loan discount is a one-time charge used to adjust the yield on the loan to what market conditions demand. One point is equal to 1 percent of the loan amount. }} Appraisal fee This is a one-time fee that pays for an appraisal, which is a statement of property value required on most loans and made by an independent appraiser. }} Credit report fee This one-time fee covers the cost of the credit report, processed by an independent credit reporting agency. }} Title insurance fees There are two title policies, an Owner s title policy that protects the new homeowner, and a Lender s title policy that protects the lender against loss due to a defect in the title. These are both one-time fees. }} Miscellaneous title charges The title company may charge fees for a title search, title examination, document preparation, notary fees, recording fees and a settlement of closing fee. These are all onetime charges. }} Document preparation fee There may be a separate, one-time fee that covers preparation of the final legal papers, including the note and deed of trust. }} Prepaid interest Depending on the day of the month your loan closes, this charge may vary from a full month s interest to just a few days interest. If your loan closes near the end of the month, you will only have to pay a few days interest. }} Private mortgage insurance (PMI) premium Depending on the amount of your down payment, you may be required to pay a fee for mortgage insurance, which protects the lender against loss due to foreclosure. You may also be required to put a certain amount for PMI into a special reserve account, called an impound account, held by the lender. }} Taxes and hazard insurance Based on the month you close, property taxes will be prorated between you and the seller. You will also need to pay an entire year s hazard insurance/ homeowner s insurance premium up front. You also may be required to put a certain amount for taxes and insurance into an impound account held by the lender. }} Short-term and reissue rates When the property s current owner was insured with an Owner s policy within the past five years, North American Title Company will honor the policy even if it was written by another title company. The new Owner s policy will be discounted. Other reissue rates are available that may save on the normal Owner s policy rate. Call your Escrow Officer for other discounts that may apply to your situation. 5

6 COMMON FORMS of Nevada Residential Ownership How should I take ownership of the property I am buying? Nevada real property purchasers who ask their real estate, escrow and title professionals this important question must understand that these professionals may identify methods of owning property. However, they may not recommend a specific form of ownership, as this would constitute practicing law. Because real property is among the most valuable of assets, the question of how parties take ownership of their property is of great importance. The form of ownership taken the vesting of title will determine who may sign various documents involving the property and the future rights of the parties in the transaction. These rights involve such matters as real property taxes, income taxes, inheritance and gift taxes, transferability of title, and exposure to creditors claims. Also, how title is vested can have significant probate implications in the event of death. Ownership of real property Real property may be owned by a sole owner, or it may be owned jointly by two or more persons. Concurrent ownership or co-ownership means simultaneous ownership of a given piece of property by two or more persons. The common types of concurrent, residential ownership are: Tenancy in Common A tenancy in common is characterized by only one unity, that of possession. It is created whenever an instrument conveys an interest in real property to two or more persons and specifies tenancy in common. If a recorded conveyance document does not expressly specify the tenancy (joint tenancy, community property, etc.) the legal presumption is that the vesting is tenancy in common. Interest may be any fraction of the whole; thus one party may own one-tenth, another three-tenths, and a third party may own the remaining three-fifths. There is no right of survivorship; each tenant owns an interest which vests in his or her heirs or devisees upon death. Joint Tenancy Joint tenancy exists when two or more persons are joint and equal owners of the same undivided interest in specified property. The main characteristic of joint tenancy is the right of survivorship. When a joint tenant dies, his or her interest in the property is terminated, and the estate continues in the survivor or survivors. The usual method of creation of a joint tenancy is by a deed describing the grantee as follows: to A and B, as joint tenants. The words with right of survivorship are often added, but are not a requisite, since this right is an incident of a joint tenancy, whether expressly recited or not. Problems have frequently arisen regarding the true character of the ownership of property by husband and wife as joint tenants. Frequently such property, despite the status of joint tenancy ownership, has been treated as community property for purposes of succession, transfer, disposition in divorce or seizure by creditors. It may be shown that property taken in joint tenancy was thereafter converted into community property by either an oral or written agreement. The contention that joint tenancy property is in fact community property is often raised in divorce cases. The court does not have the power to make an award of separate property, but if it is established that joint tenancy property is in fact community property, the court may award such property to a spouse. Upon the death of one joint tenant, the title automatically passes to the survivor. Title insurance companies will require some formal procedure before recognizing the new owner. Two methods are followed: Filing an Affidavit of Death of Joint Tenant or obtaining a court decree of death of joint tenant. 6

7 Community Property Community property is a creation of the Civil Law of Rome and came to Nevada via Mexico. In general, community property represents the earnings and accumulations of the marriage. Persons who are not married to each other, or are not domestic partners, cannot hold community property together. All property of married persons that is not their community property is the separate property of one or the other. Separate property consists of: } Property owned before marriage } Gifts and inheritances received after marriage } Proceeds of separate property, such as dividends, rents, profits or property received in exchange for separate property } Property agreed between the spouses to be separate property } Earnings of the wife when she is living separate and apart from the husband } Earnings of the husband when he is living separate and apart from the wife } All deeds conveying community property must be signed by the wife as well as the husband. Community Property with Right of Survivorship This is a form of vesting title to property owned together by husband and wife or by domestic partners. It shares many of the characteristics of community property but adds the benefit of the right of survivorship similar to title held in joint tenancy. There may be tax benefits for holding title in this manner. The interest must be created on or after July 1, Legal and tax consequences How title is vested has important legal and tax consequences. As a Nevada real property purchaser, you may wish to consult an attorney or tax advisor to determine the most advantageous form of ownership for your particular situation. 7

8 COMMON FORMS OF Residential Ownership in Nevada How To Take Title to Real Property TENANCY IN COMMON JOINT TENANCY COMMUNITY PROPERTY COMMUNITY PROPERTY WITH RIGHT OF SURVIVORSHIP PARTIES INVOLVED Any number of persons (can be spouses) Any number of persons (can be spouses) Only spouses or domestic partners* Only husband and wife or domestic partners* DIVISION Ownership can be divided into any number of interests, equal or unequal Ownership interests are equal Ownership interests are equal Ownership interests are equal TITLE Each co-owner has a separate legal title to his or her undivided interest There is only one title to the whole property Title in the Community (similar to title being in a partnership) Title in the Community (similar to title being in a partnership) POSSESSION Equal right of possession Equal right of possession Equal right of possession Equal right of possession CONVEYANCE Each co-owner s interest may be conveyed separately by its owner Conveyance by one co-owner severs the joint tenancy Both co-owners must join in conveyance of real property separate interests cannot be conveyed Both co-owners must join in conveyance of real property separate interests cannot be conveyed PURCHASER S STATUS Purchaser of an undivided interest becomes a tenant in common with the other co-owners Purchaser of an undivided interest becomes a tenant in common with the other co-owners Purchaser can only acquire whole title of community cannot acquire a part of it Purchaser can only acquire whole title of community cannot acquire a part of it UPON DEATH Upon co-owner s death, his or her interest passes by will to devisees, or to heirs by intestate succession Upon co-owner s death, his or her interest passes automatically to the survivor(s) Upon co-owner s death, decedent s half passes automatically to surviving spouse unless willed to another party (Consult attorney with specific questions) Last survivor owns property individually SUCCESSOR S STATUS Portion passing by will results in tenancy in common between devisee and survivor Last survivor owns property in severalty Portion passing by will results in tenancy in common between devisee and survivor Last survivor owns property individually CREDITOR S RIGHTS Co-owner s interest may be sold on execution sale to satisfy his creditor creditor becomes a tenant in common Co-owner s interest may be sold by execution sale to satisfy a judgment lien. Joint tenancy is severed, and creditor becomes tenant in common with other co-owner Co-owner s interest cannot be seized and sold separately (whole property may be sold to satisfy debts of either spouse depending on the debt consult attorney with specific questions) Co-owner s interest cannot be seized and sold separately (whole property may be sold to satisfy debts of either spouse depending on the debt consult attorney with specific questions) PRESUMPTION When vesting (form of ownership) is not specified, tenancy in common is presumed by law Must be expressly stated and properly formed Rebuttable presumption that any property acquired by husband and wife is community property (Consult attorney with specific questions). Must be specified on deed for title insurance purposes Rebuttable presumption that any property acquired by husband and wife is community property (Consult attorney with specific questions). Must be specified on deed for title insurance purposes *Domestic partners should confer with legal counsel. 8

9 Comparison Of Owner s Policy Coverage Between the CLTA Owner s Policy And the ALTA America s First Homeowner s Policy AVAILABILITY COVERAGE Amount of insurance coverage increases automatically by 10% in each of first five years after policy is issued without any additional premium Someone forges your name to a deed or mortgage after your policy is issued to you CLTA OWNER S POLICY To any insured For any type of property No No ALTA AMERICA S FIRST HOMEOWNER S POLICY One-to-four unit family residences, including condominiums Yes Yes A neighbor builds an improvement over your property line after your policy is issued to you No Yes The improvement on your property encroaches into an easement and you must remove it No Yes The improvement on your property encroaches over the property line and you must remove it The improvement on your land was constructed without a valid building permit and you must remove the improvement or correct it The improvement on your land was constructed with a valid building permit, but does not comply with zoning laws and you must remove or correct it Your coverage continues to the benefit of your spouse who receives title upon a divorce No No No No Yes Yes Yes Yes You transfer title to the trustee of your trust after the policy is issued No Yes Someone else claims to own the property Yes Yes Someone else claims to have a lien against the property Yes Yes 9

10 NEVADA Branch Locations Southern Nevada DIVISION HEADQUARTERS 3200 East Camelback Road Suite 150 Phoenix, AZ t: f: LAS VEGAS 8485 West Sunset Road Suite 111 Las Vegas, NV t: f: GREEN VALLEY 2470 Saint Rose Parkway Suite 104 Henderson, NV t: Northern Nevada DIVISION HEADQUARTERS 1855 Gateway Boulevard Suite 600 Concord, CA t: f: RENO Professional Circle Suite A Reno, NV t: f: If you require additional information or have questions regarding one of our locations, please contact your local North American Title office. 10

11 STATEMENT OF INFORMATION What s in a name? When a title company seeks to uncover matters affecting title to real property, the answer is, quite a bit. Statements of Information provide title companies with the information they need to distinguish the buyers and sellers of real property from others with similar names. After identifying the true buyers and sellers, title companies may disregard the judgments, liens or other matters on the public records under similar names. To help you better understand this sensitive subject, here are answers to some of the questions most commonly asked about Statements of Information. What is a Statement of Information? A Statement of Information is a form routinely requested from the buyer, seller and borrower in a transaction where title insurance is sought. The completed form provides the title company with information needed to adequately examine documents so as to disregard matters that do not affect the property to be insured matters that actually apply to some other person. What does a Statement of Information do? Every day, documents affecting real property liens, court decrees, bankruptcies, etc. are recorded. Whenever a title company uncovers a recorded document in which the name is the same or similar to that of the buyer, seller or borrower in a title transaction, the title company must ask, Does this document affect the parties we are insuring? Because if it does, it affects title to the property and would therefore be listed as an exception from coverage under the title policy. A properly completed Statement of Information will allow the title company to differentiate between parties with the same or similar names when searching documents recorded by name. This protects all parties involved and allows the title company to competently carry out its duties without unnecessary delay. What types of information are requested in a Statement of Information? The information requested is personal in nature, but not unnecessarily so. The information requested is essential to avoid delays in closing the transaction. You will be asked to provide full name, Social Security number, year of birth, birthplace and information on citizenship. If you are married, you will be asked the date and place of your marriage. Residence and employment information will be requested, as will information regarding previous marriages if you are divorced. You may ask, Will the information I supply be kept confidential? The information you supply is completely confidential and only for the title company to use in completing the search of records necessary before a policy of title insurance can be issued. What happens if a buyer, seller or borrower fails to provide the requested Statement of Information? At best, failure to provide the requested Statement of Information will hinder the search and examination capabilities of the title company, causing the delay in the production of your title policy. At worst, failure to provide the information requested could prohibit the close of your escrow. Without a Statement of Information, it would be necessary for the title company to list judgments, liens or other matters as exceptions from coverage, which may affect the property to be insured. Such exceptions would be unacceptable to most lenders, whose interest must also be insured. In conclusion Title companies make every attempt in issuing a policy of title insurance to identify known risks affecting your property and to efficiently and correctly transfer title so as to protect your interests as a homebuyer. By properly completing a Statement of Information, you allow the title company to provide the service you need with the assurance of confidentiality. This information is reprinted with permission from the California Land Title Association and has been approved for its application in the state of Nevada. 11

12 What is Escrow? Escrow is the depositing of funds and documents by the parties with a neutral third party for delivery upon completion of the terms of the escrow instructions. When the parties deliver documents and money to the Escrow Officer to be held for further delivery until certain conditions have been met, we say the documents are held in escrow. We may also say the parties have opened an escrow. Each of the principals of the escrow (Seller, Buyer, Lender) will give to the escrow holder written instructions setting out the conditions under which further delivery is to be made. These instructions are usually typed by the Escrow Officer or the Escrow Assistant from oral information supplied by the principals or from a contract signed before they arrived at the escrow office. The Purpose of an Escrow The common use of an escrow is to enable the parties in a real estate transaction to deal with each other with less risk, since the escrow holder acts as: } Custodian for funds and documents } A clearing house for payment of all demands } An agency to perform the clerical details for the settlement of the accounts between the parties Typical Escrow Transaction Typically, an escrow begins with the Escrow Officer opening the order for title work. Based on the information provided, North American Title prepares a title report. There are two basic types of title reports: a preliminary report and a commitment. A preliminary report provides the customer with a report of the present status of the property as revealed by the public records filed or recorded in the county in which the property is located. A commitment additionally specifies the requirements that must be met in order to issue the requested insurance. Upon receipt of the title report, an analysis is made to determine the necessary action and documents required to complete the transaction: demands for satisfaction of liens not acceptable to Buyer and/or Lender; documents for recording; and instructions and requirements of the new Lender. In most areas, Buyers and Sellers instructions are prepared for signature from the information gathered. When all the title and financial requirements are met, and instructions from all parties can be fully complied with, the escrow is ready to close. At that point, the financial settlement takes place, the documents are recorded and the title insurance policies are issued. 12

13 The Good Faith Estimate (GFE) When you apply for a mortgage, the government requires your lender to give you a Good Faith Estimate (GFE) within three days of your application. This document sets out all the costs associated with the mortgage, and most experts recommend against committing to a loan before seeing it. A GFE is also helpful because it allows you to compare the real costs of competing mortgage offers. However, it can be tricky to understand especially if different lenders don t list the same costs in the same way, or if the costs are incomplete or inaccurate. So, it pays to take a close look at your Good Faith Estimate when it arrives. Here are some of the things to look out for. Interest Rate and Points A GFE shows your interest rate and any discount points you can pay at closing. Make sure you understand that paying discount points will buy you a lower interest rate and lower payments, but it will take many months before the savings make up for the fee. Lender s Fees The long list of lender s fees includes the appraisal fee, credit report fee, application fee, mortgage broker s fee and interest rate lock-in fee, if any. Watch for big differences between lenders no fees should vary widely. Also, watch for extra fees applied only by certain lenders, or missing fees that may not have been included but are sure to appear later. Ask a lender about any fee that seems out of line. Title and Transfer Charges The closing or escrow fee, title search and title insurance fees, and government taxes are pretty much standard. All title companies in Nevada must strictly adhere to their filed rates. However, you have the right to shop around and compare prices along with the company s reputation for service and reliability. Prepaid Interest One item paid in advance is the interest on the loan for the period before the first payment date. Putting your closing date close to the end of the month can minimize this charge. Insurance A GFE may specify a figure for home or hazard insurance but it may be less expensive to arrange your own. Also, if you are being charged for mortgage insurance or flood insurance, make sure you know why. The Consumer Financial Protection Bureau has created new integrated disclosure forms that will go into effect on Aug. 1, 2015, replacing the Good Faith Estimate, the Truth in Lending disclosure and the HUD-1. The new forms are called the Loan Estimate and the Closing Disclosure. } Continued 13

14 } continue... The Good Faith Estimate (GFE) Differences in Fee Amounts on GFE versus HUD-1 On the final page of your GFE, there is a table stating which charges can only increase up to 10 percent at the time of settlement. Those charges include: } Required services that the lender selects } Title services and lender s title insurance (if the lender selects them or you use companies the lender identifies) } Owner s title insurance (if you use companies the lender identifies) } Required services that you can shop for (if you use companies the lender identifies) } Government recording charges When your transaction is ready to close, the Escrow Officer will prepare a HUD-1 form summarizing the costs owed by the borrower to the seller. The final HUD-1 page compares your GFE estimates to your HUD-1 charges. The second section of the final page separates charges that in total cannot increase more than 10 percent. If the increase between your HUD-1 and GFE charges is more than 10 percent, then the amount over the cap must be paid to you as a tolerance cure or reimbursement. If you have any questions about this benefit, be sure to ask your Escrow Officer. Truth in Lending Statement Along with the Good Faith Estimate, a lender will also give you a Truth in Lending (TIL) disclosure form. This gives you the Annual Percentage Rate (APR) on your mortgage, which takes into account discount points, mortgage insurance and other fees on top of the basic interest rate. The Truth in Lending form also lists the total finance fees, the amount financed, the total amount you ll pay over the life of the loan, the total number and amount of your payments, and when they re due each month. And it contains other important details, such as whether the mortgage is assumable if you sell the home, and whether there is a penalty for prepaying the mortgage; if the form says you may have to pay a penalty, it means you probably will. Most important, understand that the figures in the TIL form can also change. If your interest rate or any of the fees go up by closing day, so will your APR and the overall cost to your loan. 14

15 What an Escrow Holder Does and Does Not Do: The Escrow Holder: } Serves as the neutral stakeholder and the communication link to all parties in the transaction } Carries out the written instructions given by the principals } Requests a preliminary title search or commitment to determine the present condition of title to the property } Requests a beneficiary s statement if debt or obligation is to be taken over by the Buyer } Complies with Lender s requirements as specified in the Lender s instructions } Prepares or secures the deed or other documents related to escrow } Prorates taxes, interest, insurance and rents according to the instructions } Secures releases of all contingencies or other conditions as required by the terms agreed upon by the parties } Records deeds and any other documents as instructed } Requests issuance of the title insurance policy } Receives purchase funds from the Buyer } Closes escrow when all the instructions of the Buyer and Seller have been carried out } Disburses funds as authorized by instructions, including charges for title insurance, recording fees, real estate commissions and loan payoffs } Prepares final statement for the parties accounting for the disposition of all funds deposited into escrow (These are useful in the preparation of tax returns.) The Escrow Holder Does Not: } Negotiate the transaction } Offer legal advice } Offer investment advice and/or tax advice The professionals at North American Title specialize in closing all your real estate transactions. Our title insurance comes with an assurance of expertise and personal attention. Will provide additional information upon request. 15

16 The Escrow Process Customer opens the order at NATC and earnest money is deposited Order Commitment from the Title Department Prepare all Buyers and Sellers pertinent documents Commitment received, reviewed and copies forwarded to all parties Buyer s and Sellers documents executed Order demands Receive demands and review Bills from termite company, hazard insurance company and home warranty company, etc., are forwarded to the Escrow at the direction of the customer Loan documents received from Lender and settlement statements prepared Buyer executes loan documents and deposits closing costs Prepare loan package to be returned to Buyer s Lender and request loan funds from Buyer s Lender Review file to determine that all conditions have been met and all documents are properly executed, notarized and prepared for recordation Loan funds received and deposited Documents are sent to County Recorder for recordation Close file, disburse funds and forward all pertinent documents to all parties in the transaction 16

17 WHO PAYS WHAT? A Guide to Closing Costs The SELLER is usually responsible for: } Owner s title insurance premiums } Real estate commission } 1/2 of the escrow fee } Any loan fees required by Buyer s Lender per contract terms } Payoff of all loans in Seller s name including any interest owed to the Lender being paid off, statement fees, reconveyance fees and any prepayment penalties, if applicable } Termite work per contract terms } Home warranty per contract terms } Any judgment, tax liens, etc. against the Seller } Recording charges per contract terms } Tax proration for any taxes unpaid at the time of transfer of title } Unpaid Homeowners Association dues } Bonds or assessments per contract terms } Any and all delinquent taxes The BUYER is usually responsible for: } Lenders title policy premiums } 1/2 of the escrow fee } Document preparation (if applicable) } Notary fees (if applicable) } Recording charges per contract terms } Homeowners Association transfer fee per contract terms } All new loan charges (except for those the Lender requires the Seller to pay) } Interest on new loan from date of funding to 30 days prior to first payment date } Assumption/change of records fees for takeover of existing loan } Beneficiary statement fee for assumption of existing loan } Home warranty per contract terms } Hazard insurance premium for first year per contract terms } Termite inspection per contract terms FHA and VA regulations mandate certain costs of the transaction to be specifically paid by the Buyer or Seller. Your Real Estate Agent and your Loan Officer will be able to assist you in determining your particular charges.? 17

18 Successful Closings 18 To ensure a smooth completion of your purchase, a few crucial items must be provided prior to your closing date or at your appointment to sign the escrow papers. } You must satisfy your lender s requirements prior to closing. } Your lender will require that the first year of hazard insurance premiums be paid into escrow. Provide your Escrow Officer the insurance agent s name and phone number so a copy of the policy can be forwarded to the lender. If you are purchasing a townhome, verify with your real estate professional whether your insurance is paid via your homeowners dues. } Read through the chart, Common Forms of Ownership How to Take Title to Real Property, and decide how you wish to hold title to your new home. Consult an attorney, a tax consultant or other qualified professional if you have any questions. } Obtain a cashier s or certified check made payable to North American Title Company in the amount indicated by your Escrow Officer. A personal check will delay your closing because we are required by law to verify good funds before disbursing payments from escrow. You must have government-issued photo identification in order to close. One of these forms must be presented at the escrow signing for the signature to be notarized: } Current Nevada Department of Motor Vehicles driver s license } Current Nevada Department of Motor Vehicles Identification Card } A current passport } Any other Nevada-approved identification with a photograph, description of the person, an identifying number and a signature of the person Check with your Escrow Officer if you have questions about acceptable forms of identification.

19 Property Tax Calendar for Real Estate and Mobile Homes Nevada Annual Property Tax Calendar 3 rd Installment due First Monday in January 4 th Installment due First Monday in March Tax Bills Mailed First of the Month August 1 st Installment due Third Monday in August 2 nd Installment due First Monday in October Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Month January March August October Installment Payment First Monday: 3 rd installment due 10 days later: Last day to pay without penalty* First Monday: 4 th installment due 10 days later: Last day to pay without penalty* First of the Month: Tax bills prepared and mailed out Third Monday: 1 st installment due 10 days later: Last day to pay without penalty* First Monday: 2 nd installment due 10 days later: Last day to pay without penalty* * Verify with the county Tax Treasurer for delinquent amounts. }} Tax rates are set in June of each year. Taxes may be paid in installments if the taxes on the parcel exceed $100. These are not quarterly payments, but four due dates set by the Nevada legislature. }} Applicable penalties are charged for delinquent payments. }} Visit your county Tax Treasurer website for more information. 19

20 Avoid Property Tax Penalties Many tax delinquencies occur during the first year of property ownership. As a new property owner, please be aware of the following: Name on tax roll and tax bill The assessment roll from which tax bills are prepared is required by law to list the assessee as of January 1 of that year. Property is assessed to the owner as of that date. Therefore, deeds recorded after January 1 would not reflect a change of ownership on the tax rolls until the following year. Tax bills are mailed only once a year Tax bills are mailed in the latter part of July to the owner of the property as of January 1 of that year. If your deed was recorded after that date, the tax bills will reflect the previous owner s name and you may not receive a tax bill even though as owner, you are liable for the taxes. If you do not receive a tax bill by August 1, contact the county Tax Treasurer for a replacement bill. Due date Real property taxes are due and payable the same Mondays every year, and delinquent 10 days following. The post office cancellation mark is used by the Tax Treasurer as the date of receipt of your payment. Here is the annual schedule for real property and mobile home taxes: First quarter Second quarter Third quarter Fourth quarter Third Monday in August First Monday in October First Monday in January First Monday in March If you do not receive a tax bill Failure to receive a tax bill does NOT relieve the owner from the liability to pay taxes, nor does it relieve the imposition of penalties. State tax laws place the responsibility of obtaining a tax bill and making payment(s) timely upon the property owners. Supplemental property tax bill If an improvement on real property is in existence on July 1, but not determined by tax authorities in time to be placed on the secured tax roll for that year, it must be placed on the unsecured tax roll. When that occurs, the property owner will receive a Supplemental Real Property Tax Bill. This bill is in ADDITION to the original tax bill. It is typically billed in two installments, the first Monday in January and the first Monday in March. These dates are the same as the third and fourth installments of the original tax bill. PLEASE NOTE: THIS BILL IS NOT SENT TO YOUR MORTGAGE COMPANY. Many mortgage companies do not pay supplemental tax bills, so please contact your mortgage company for its specific procedure. If you forward your bill to your mortgage company for payment, be sure to include your loan number on your bill. If you require additional information or have questions regarding your property taxes, please contact the Treasurer s office of the county in which the property is located. 20

21 Moving Checklist Task Notes Planning Your Move Obtain the booklet Your Rights and Responsibilities When You Move from the mover. The booklet text is also available on the Federal Motor Carrier Safety Administration website at Ask for recommendations from neighbors, friends and relatives regarding the mover. Check with the Better Business Bureau regarding the mover. Find out what the mover s responsibilities are for damages that may occur to your belongings. Ask if the mover has a dispute settlement program. Obtain estimates from at least three movers, and compare costs and all other services to be provided by the mover. Check on the website, to determine whether the interstate mover is registered with FMCSA and has a USDOT number. In Nevada, go to the Nevada Transportation Authority website at to determine if the mover has an active state certificate. Find out how and when pickup and delivery of your household goods will occur. Ask the mover how they can be reached before the move, during the move and after the move. Adequately insure your belongings. Moving Day Be present to answer questions and give directions to the movers. Stay until they finish. Accompany the movers as they inventory your household goods and resolve any questions regarding the condition of the materials being moved. Carefully read the information on the estimate, order for service, bill of lading, inventory and all other completed documents before you sign them. Keep the bill of lading until your goods are delivered, the charges are paid and any claims are settled. Before the moving van leaves, take one final look throughout the house to make certain nothing has been left behind. Give the driver directions to your new house. Inform the driver and the moving company of where you can be reached during the move. Delivery Day Be present to answer any questions and give directions. Pay the driver according to the terms of your agreement before your goods are unloaded. Supervise the unloading and unpacking of your goods. Note on the inventory list all boxes or other items that are damaged before you sign any documents. 21

22 REAL ESTATE TERMINOLOGY Every industry has its own terminology. The following are some common real estate terms and their meanings. Glossary of Terms Addendum: A list or other material added to a document, letter, contractual agreement, escrow instructions, etc. (See also: Amendment) Agency: Agency is the relationship that occurs when a Broker represents a Buyer or Seller in a real estate transaction. An Agent has fiduciary duties to the Client, such as confidentiality, accounting, reasonable care, loyalty, obedience, advocacy and disclosure. Amendment: A change, either to correct an error or to alter a part of an agreement without changing the principal idea or essence. Annual Percentage Rate: The yearly interest percentage of a loan, as expressed by the actual rate of interest paid. The A.P.R. is disclosed as a requirement of federal truth-in-lending statutes. Appraisal: An opinion of value based upon a factual analysis. Legally, an estimation of value by two disinterested persons of suitable qualifications. As Is: In an AS IS contract, the Seller is saying the property will be sold in its existing physical condition and the Buyer is taking the property s condition into account when making an offer. The clause does not negate a Seller s common law duty to disclose known latent material defects. Assumption Of Mortgage: Agreement by a Buyer to assume the liability under an existing note secured by a mortgage or deed of trust. The Lender usually must approve the new debtor in order to release the existing debtor (usually the Seller) from liability. Beneficiary: As used in a trust deed, the Lender is designated as the beneficiary, i.e., obtains the benefit of the security. Buyer-Broker Agreement: An employment agreement between a Buyer and a Broker that employs the Broker to locate property and negotiate terms and conditions acceptable to the Buyer for the purchase of a home. The Buyer usually agrees to work exclusively with the broker and the compensation the Buyer is obligated to pay is often offset by any compensation the broker receives from the listing Agent. Close Of Escrow: The date that title passes from Seller to Buyer and documents are recorded. Chain Of Title: The chronological order of conveyance of a parcel of land from the original Owner (usually the government) to the present Owner. Cloud On Title: An invalid encumbrance on real property, which if valid, would affect the rights of the Owner. The cloud may be removed by quitclaim deed, or, if necessary, by court action. Comparable Sales: Sales of properties used as comparisons to determine the value of a specific property. Conditions, Covenants & Restrictions (Cc&Rs): CC&Rs are recorded against the home and are an enforceable contract. The CC&Rs empower the homeowner s association, if there is one, to control certain aspects of the home. A home Buyer should always carefully read the CC&Rs (and any other association documents) because the Buyer will be obligated to comply with all the rules and restrictions. Contract: A contract for the sale of a home must be signed and in writing to be enforceable. Contingency: A contingency is a clause in a contract that requires the completion of a certain act before the parties are obliged to perform their contractual obligations. The most common contingencies are financing, acceptable property condition and condition of title. Conveyance: Transfer of title to a property. Includes most instruments by which an interest in real estate is created, mortgaged or assigned. Counteroffer: An offer (instead of acceptance) in response to an offer. For example: A offers to buy B s house for X dollars; B, in response, offers to sell to A at a higher price. B s offer to A is a counteroffer. Deed: Written instrument by which the ownership of land is transferred from one person to another. 22

23 Deed Of Trust: An instrument used in many states in place of a mortgage. Property is transferred to a trustee by the Borrower (Trustor), in favor of the Lender (Beneficiary) and reconveyed upon payment in full. Disclosure: To make something known. All disclosures should be in writing when dealing with real estate interests and real property. Discount Points: The amount paid to increase the yield. Discount points are up-front interest charges to reduce the interest rate on the loan over the term of the loan. Each point equals one percent of the face value of the loan. Dual Agency: Dual agency occurs when one Broker individually, or two Agents within the same brokerage firm, represent both Buyer and Seller in a real estate transaction. Dual agency is legal with consent. Due On Sale Clause: An acceleration clause that requires full payment of a mortgage or deed of trust balance when the secured property changes ownership. Earnest Money: Money given by the Buyer with an offer to purchase. Shows good faith. Easement: The right to use another person s land for a specified purpose, such as for public utilities, ingress and egress, etc. Escrow: A procedure in which a third party acts as a stakeholder for both the buyer and the seller, carrying out both parties instructions and assuming responsibility for handling all the paperwork and distribution of funds. Escrow Instructions: Escrow instructions are instructions to the escrow company on how to carry out the terms of a contract. The contract is often used as escrow instructions. Other times, the escrow instructions are preprinted forms from the escrow company with any necessary additional or supplemental instructions. Fair Market Value: Price that probably would be negotiated between a willing Seller and a willing Buyer in a reasonable time. Fixtures And Personal Property: A fixture is an item that was once personal property, but is affixed to the home in such a manner as to become part of the home itself. A Buyer purchases the fixtures affixed to the home, but personal property is not part of the transaction unless it is listed in the contract. The contract should specifically identify all items that are to be conveyed in the transaction. Hazard Insurance: Property insurance protecting against loss caused by fire, some natural causes, vandalism, etc., depending upon the terms of the policy. Homeowners Association (HOA): An association of people who own real property in a given area, formed for the purpose of improving or maintaining the quality of the area. Also an association formed by the Builder of condominiums or planned developments, and required by statute in some states. The Builder s participation as well as the duties of the association is controlled by statute. Homestead Exemption: The Homestead Exemption exempts the home in which the person resides from attachment, execution and forced sale due to a non-consensual judgment or lien, up to $150,000 in value or equity. The homestead only prevents certain creditors, such as judgment creditors, from taking the first $150,000 of equity in a person s home to satisfy a debt. Liens that a person allows to be recorded against the home, such as a mortgage or deed of trust are not affected by the homestead exemption. Homeowners do not need to take any action to assert the Homestead Exemption because the Exemption attaches automatically. Impound Account: Account held by Lender for payment of taxes, hazard insurance and other periodic debts against real property required to protect their security interest. Lien: An encumbrance against a property for the repayment of a debt. Examples include judgments, taxes, mortgages and deeds of trust. Listing Agreement: An employment contract between a Seller and a Listing Broker, the listing agreement establishes the duties of the Broker and the terms under which the Broker will earn a commission. MLS: The Multiple Listing Service (MLS) is a repository of information on homes for sale. The MLS is also a means by which Broker participants make offers of compensation to other Broker participants for bringing a ready, willing and able Buyer for the property. Glossary of Terms } Continued... Glossary of Terms 23

24 tinued... Glossary of Terms Mortgage: The instrument by which real estate is pledged as security for the repayment of a loan. Mortgage Insurance: Insurance written by an independent mortgage insurance company protecting the Lender against loss incurred by a mortgage default, thus enabling the Lender to lend a higher percentage of the sales price. Piti: Payment that combines the Principal, Interest, Taxes and Insurance. Power Of Attorney: An authority by which one person (principal) enables another (attorney in fact) to act for him or her. Public Offering Statement: If a purchased property is a new unit in a common-interest community (also known as a homeowner s association) or a condominium hotel, or if the community contains converted buildings or contains units that may be in a time share, the Buyer must be provided with a Public Offering Statement. The statement discloses development rights of contractors, the construction schedule, a description of proposed improvements, and a list of mechanical and electrical installations. Verify other requirements from the Nevada Real Estate Division of the Department of Business and Industry. Purchase Agreement: An agreement between a Buyer and Seller of real property, setting forth the price and terms of the sale. Title: The evidence one has of right to possession of land. Title Commitment: The title commitment reflects the condition of the title to the home. The commitment tells the Buyer whether the taxes and assessments are paid, whether there are deed restrictions, liens and easements on the property, and what the requirements are to the issuance of title insurance on the home. Title Insurance: There are generally two title insurance policies issued at close of escrow, the Owner s policy and the Lender s policy. The Owner s policy is an insurance policy that protects the homeowner from defects in the title to the home, such as a forged deed. The Lender s policy protects the Lender against the same sort of title defects until the loan is paid. Warranty Deed: A deed that conveys fee title to real property from the Grantor (usually the Seller) to the Grantee (usually the Buyer) Exchange: A tax-deferred or 1031 exchange is a transaction involving the transfer of investment or income property and the receipt of like-kind property that will be used as income or investment property. When certain criteria are met, as set forth in section 1031 of the Internal Revenue Code, the income taxes on any gain realized from the sale of the relinquished property are deferred. Quitclaim Deed: A Deed operating a release; intended to pass any title, interest, or claim that the Grantor may have in the property, but not containing any warranty of a valid interest or title by the Grantor. Glossary of Terms Recording: Filing documents affecting real property with the County Recorder as a matter of public record. Right Of First Refusal: A first right of refusal is a provision in a contract that requires the Owner of a home to give another party (usually a tenant) the first opportunity to purchase or lease the property before it is offered for sale to another. Subdivision: The division of one parcel of land into smaller parcels (lots) created by filing a subdivision plat with the governmental authority (city or county) and receiving approval from the governmental authority. 24

25 Why a Home Warranty? A home warranty also called a home service contract provides for the service, repair or replacement of major home systems and household appliances. Contracts generally cover items such as home heating, ventilation and air conditioning systems (HVAC); the plumbing and electrical system; and standard kitchen appliances including dishwashers, disposers, microwave ovens and range/cooktops. Contracts cover breakdowns or malfunctions due to normal wear and tear. Coverage does not include preexisting conditions. Many warranty providers also offer a menu of optional items such as swimming pool or spa equipment and other freestanding appliances such as kitchen refrigerators, washers and dryers for an additional fee. Contract terms are normally annual and renewable, and cost an average of $400-$500 per year. Service calls range from $50-$100. Home sellers may provide a one-year home warranty as a benefit to their home purchaser. Alternatively, homebuyers may purchase a warranty at time of closing to help provide immediate relief for unexpected repairs or replacements. Such a purchase provides needed peace of mind and budget protection during the first year of homeownership, when a new homebuyer is adjusting to expenses such as insurance, property, taxes, utilities, lawn care, pest control and the purchase of new items such as furniture. A home warranty or home service contract on a resale home is not the same as a home warranty provided by a builder on a new construction home. The National Home Service Contract Association (NHSCA) is a non-profit 501 (c)(6) industry trade organization serving home service contract providers and consumer interests throughout the country. Its members agree to adhere to a Code of Ethics that promotes sound and ethical business practices. For a current list of member firms, go to the NHSCA website at This information is taken from National Home Service Contract Association s press releases. 25

26 WHY A HOME INSPECTION? Buying a home could be the largest single investment a family or individual will ever make. To minimize unpleasant surprises and unexpected difficulties, buyers need to learn as much as possible about the newly constructed or existing house before the purchase. A home inspection may identify the need for major repairs or builder oversights, as well as the need for maintenance to keep it in good shape. After the inspection, a buyer will know more about the house, which allows for more confident decisions. What is included in a home inspection? A home inspection is an objective visual examination of the physical structure and systems of a house, from the roof to the foundation. The standard home inspector s report will cover: } Condition of the home s heating system and central air conditioning system (temperature permitting) } Interior plumbing and electrical systems } Roof, attic and visible insulation } Walls, ceilings, floors, windows and doors } Foundation, basement and structural components A professional home inspection is an examination of the current condition of a house. It describes its physical condition and indicates what components and systems may need major repair or replacement. While it s not required that a buyer be present for the inspection, it is highly recommended. In that case, buyers are able to observe the inspector and ask questions as they learn about the condition of the home and how to maintain it. The inspection fee for a typical one-family house varies geographically, as does the cost of housing. Similarly, within a given area, the inspection fee may vary depending on a number of factors such as the size of the house, its age and possible optional services such as septic, well or radon testing. When do I call a home inspector and how do I find one? Typically, a home inspector is contacted immediately after the contract or purchase agreement has been signed. To find a home inspector, buyers can ask friends to recommend a home inspector they have used, or they can use the website for the American Society of Home Inspectors (ASHI), the oldest and most respected professional organization for home inspectors in the United States, at In addition, real estate agents are familiar with home inspectors and may be able to provide a buyer with a list of names from which to choose. Be sure to use the inspector s qualifications, including experience, training, compliance with Nevada s regulations and professional affiliations as a guide to choosing an inspector. The lowestpriced inspection is not necessarily a bargain. The above information is from the FAQs of the American Society of Home Inspectors, and is reprinted with permission. See for additional information. 26

27 Important Numbers Las Vegas Power Company Information NV Energy, Gas Company Information Southwest Gas Corporation, Water / Sewer Services Las Vegas Valley Water District, City of Las Vegas, Sewer Dept., City of Henderson, Utility Service Dept., City of N. Las Vegas, Utility Service Dept., Clark County Sanitation District, Boulder City Utilities, Sanitation / Trash Services Republic Services, Telephone / Cable / Satellite / Internet Services Century Link, Cox Communications, Dish Network, DIRECTV, Education Clark County School District, College of Southern Nevada, University of Nevada, Las Vegas (UNLV), Other Important Phone Numbers Police / Fire / Medical Emergency Police Non-Emergency Dept. of Motor Vehicles, Voter Registration Clark County Assessor (personal property taxes) Clark County Treasurer (real property taxes), U.S. Postal Service, Veteran s Affairs, HUD / FHA, Internal Revenue Service, Unemployment Insurance Claims Employment Security Division, Important Numbers Washoe County Power Company Information NV Energy, Water / Sewer Services Truckee Meadows Water Authority, Washoe County Community Services Department, Water Utility City of Reno Sewer Services City of Sparks Sewer Services Sanitation / Trash Services Waste Management, Independent Sanitation Co Reno Disposal Co Sparks Sanitation

28 } Continued... Important Numbers Important Numbers Washoe County Telephone / Cable / Satellite / Internet Services AT&T, Comcast XFINITY, Comcast Education Washoe County School District, Carson City School District, Storey County School District, Humboldt County School District, Pershing County School District, Churchill County School District, Lyon County School District, Contacts Police / Fire / Medical Emergency Reno Police (non-emergency) Sparks Police (non-emergency) Washoe County... Property Taxes, Department of Motor Vehicles, Recorded Documents, Assessor s Office, City of Reno, City of Sparks, Animal Services, Senior Services, State of Nevada, Nevada Voting... State jobs... Unemployment Services... Libraries Downtown Reno Library Duncan/Traner Library Gerlach Library Incline Village Library North Valleys Library Northwest Reno Library Senior Center Library Sierra View Library South Valleys Library Spanish Springs Library Sparks Library Verdi Library Internet Branch Library, Hospitals Saint Mary s Regional Medical Center, Northern Nevada Medical Center, Renown Regional Medical Center, VA Sierra Nevada Healthcare System, Tahoe Pacific Hospital, 28