The title company performs research into public records, such as deeds, mortgages, paving assessment, liens, wills, divorce settlements, and other documents affecting title to the property. Then it performs a title examination on the documents found during the title search that affect the title to the property to verify the legal owner of the property and any outstanding debts against it that have been filed publicly.
But not all issues can be uncovered during the research stage. Sometimes public records are inaccurate or not properly filed. To avoid potentially losing a property to an error that was out of the control of all parties to the transaction, property insurance must be carried by the Purchasers in the names of all parties (Buyers, Sellers and possible Mortgage Company).
Title insurance is available to ensure the validity of the title that is to be conveyed to the Purchaser – subject to the condition that the Purchasers pay the amounts contracted for in the Bond for Deed contract.
The IRS considers a Bond for Deed/Land Contract the equivalent of an ordinary real estate sale. Therefore, deductions for interest and depreciation by the Purchasers are treated similarly by the IRS. Our Servicing provides the needed IRS forms for this included with the service.
Prorations (other costs)
Real estate taxes, insurance premiums if assumed, rents, condominium dues, assessments, and/or other dues owed to homeowner’s associations and the like for the current year are to be prorated through the date of closing.
Act of Sale costs, abstracting costs, title search, title insurance and other costs required to obtain financing, shall be paid by the BUYER unless otherwise stated herein.