Harbin & Miller LLC
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FAQ


Why must I bring a cashier’s check or have funds wired to the escrow agent?

In Georgia, an escrow agent cannot accept a personal check if the amount exceeds $5,000.00.


How do I know how much money to bring in to closing?

Prior to closing, we will forward copies of the settlement statement/closing statement to the lender and agents. Your agent will forward the settlement statement/closing statement to you. If you do not have a real estate agent, we will ask that the lender forward the settlement statement/closing statement to you prior to the closing date. The settlement statement/closing statement will disclose all closing costs, closing credits and will also indicate the amount the buyer (or seller) needs to bring to closing.


What should I bring to closing?

If you are a buyer:

  • Identification (driver’s license or other government issued identification)
  • Evidence of hazard insurance  (this should be provided prior to the actual closing)
  • Cashier’s check or bank wire of the amount indicated on the settlement statement
  • Checkbook for any extra costs that may arise at the closing table
  • Any invoices to be paid from the closing (this should be provided prior to the actual closing)
  • Any other items specific to the deal

If you are a seller:

  • Identification (driver’s license or other government issued identification)
  • Any invoices to be paid at closing (this should be provided prior to the actual closing)
  • Social security number/EIN
  • Properly executed powers of attorney if applicable and if pre-approved
  • Written payoff statements for seller’s lenders (this should be provided prior to the actual closing)
  • Wire instructions/payment instructions for sale proceeds
  • Any other items specific to the deal

What are deeds and deed requirements in Georgia to convey title to property?

Deeds are relatively short documents with specific legal terms of art designed to convey title as the grantor (seller) or grantee (buyer) desire to convey title. An accurate legal description of the property must be included or attached to the deed. Georgia law requires one witness and a separate notary to sign the conveying deed along with the grantor’s signature.

Once the deed has been executed by the grantor, delivered to and accepted by the grantee, title has been transferred. However, your deed must then be recorded in the appropriate county office so that it is a matter of public record. 


What are the costs involved in a commercial real estate transaction?

Typically, the Lender has a list of costs which they disclose to you and which varies from lender to lender.

  • All assessments, whether condominium fees, and property taxes will be prorated between the buyer and the seller and same shall be paid current at closing, if applicable.
  • Any and all loans or liens on the subject property must be discovered by a proper title exam and UCC/lien search and paid off at closing so as to ensure the priority of any new loan on the subject property and personal property associated therewith.
  • Broker commissions are also to be paid from the closing, the percentages having been determined by the purchase and sale agreement.

The attorney costs essentially break down into three categories:

  • Title insurance
  • Title exam
  • Survey
  • Fees
  • Hard costs
  • Lender costs (third party reports, etc.)

Title insurance safe guards the insured from any claims relating to ownership of the property or any liens claimed against the property. Essentially, title insurance will guarantee marketability of title to the property up to the date of the policy. Your lender will require title insurance.

What is title insurance and do I need owner’s title insurance?


Glossary

  • Appraisal – the valuation of the property to be purchased to be used by the lender to ensure that its security interest is fully covered in the event of a default.
  • Assessments – includes fees that the property is subject to including, but not limited to home owners’ association fees and condominium association fees.
  • Assignment of Leases and Rents – this instrument assigns to the creditor any rents or interests due under leases related to the real estate that secures the loan from the creditor to the borrower. 
  • Chain of Title – the historical “chain” of ownership traced from a predecessor to the current vested owner. In general, Georgia title standards call for a record title search to extend back fifty years or more.
  • Cloud on Title – generally, this is an encumbrance on the subject property which may affect “marketable title”.
  • Condominium Association – this is the governing body of a condominium building charged with management of the common areas of the property.
  • Executor’s Deed - conveys title out of an estate of a deceased person who had a will probated.
  • Fee Simple Absolute – An estate in land of indefinite or potentially infinite duration. Black’s Law Dictionary
  • Fixture - Anything which is intended to remain permanently in its place even if it is not actually attached to the land is a fixture which constitutes a part of the realty passing with it.
  • Foreclosure – occurs when the lender exercises its rights to conduct a sale under its Deed to Secure Debt in order to apply the proceeds of the sale to the outstanding debt of the borrower.  
  • Homeowner’s Association – manages common areas of a subdivision and may have rights to collect dues and enforce protective covenants.  Homeowner Association dues may be mandatory or optional, and if applicable, are prorated between the purchaser and seller based on the time of year the property is purchased.
  • Homeowner’s Insurance – insures against loss or destruction to real property improvements.
  • Inter-creditor Agreements – agreements negotiated between senior and junior lien holders addressing courses of action, rights, and remedies in the event of a borrower’s default.
  • Joint Tenancy with Survivorship Deed – This type of deed allows the property to transfer upon the death of a co-owner to the surviving co-owner without probating the deceased co-owner’s interest in the property.  See O.C.G.A. §44-6-190.
  • Limited Warranty Deed - by executing this deed, the seller guarantees that they hold clear title to the property, have a right to sell it to the buyer, and that there are no hidden liens or encumbrances on the property. This type of warranty is usually limited to the seller of the property.
  • Marketable Title – a marketable title is one that is not only valid in fact, but one that can again be sold to a reasonable purchaser or mortgaged to a person of reasonable prudence. See Pindar §12-65.
  • Perfected Security Interest – a security interest that has completed the statutory requirements for achieving priority over other security interests that are subject to the same requirements. Black’s Law Dictionary.
  • Personal Property - all property which is movable in nature, has inherent value or is representative of value, and is not otherwise defined as realty. 
  • Private Mortgage Insurance (PMI) – an insurance policy generally required when the borrower’s down payment on the property is less than 20% of the total purchase price. PMI protects the lender from certain losses incurred in the event of borrower default on the loan. 
  • Quiet Title Action – this is an equitable action brought by a party attempting to establish the title to a property where ownership is unclear.
  • Real Property – land and permanent improvements, including fixtures, attached or with the intent to be attached to the land.
  • Security Agreement –an agreement between the debtor and creditor which operates to create the security interest to the personal property.
  • Security Deed –  a deed to secure debt, often referred to as a security deed or debt deed, is in form an outright conveyance of land by warranty deed which often includes the statement that it secures payment of a specified indebtedness; a power of attorney authorizing the grantee of his assigns to sell the property upon default; a statement that upon full payment of the debt the grantee or his assigns will cancel the deed or reconvey the property to the grantor; and special stipulations regulating the rights of the parties under various situations, all carefully shaped toward the protection of the grantee (lender).  Pindar’s §21-2.
  • Security Interest – A property interest created by an agreement or by operation of law to secure performance of an obligation. Black’s Law Dictionary.
  • Simultaneous Issue Rate – the rate applicable when an owner’s title insurance policy and a lender’s title insurance policy are issued at the same time. The borrower who purchased the required lender’s title insurance can obtain the owner’s title insurance for a premium based only on the difference between the purchase price and the loan.
  • Subordination Agreement – an agreement whereby a party claiming an interest in property agrees to make their interest inferior to another creditor also claiming an interest in the subject property. In the event of a borrower’s default, the creditor with priority may recover before the subordinated creditor.
  • Termite Letter – this is an inspection report which indicates whether a home has or had an infestation of subterranean termites or other organisms which damage wood. This must be dated within 30 days of the date of closing.
  • Title Exam – conducted by a title examiner who searches real estate record indices to produce the chain of title for the subject property.
  • UCC Financing Statements – a form which indicates the debtor and their address, the secured party and their address, and the collateral securing the loan.
  • Warranty Deed – a deed by which the seller warrants or guarantees he holds clear title to the property, have a right to sell it to the buyer, and that there are no hidden liens or encumbrances on the property. A general warranty deed is not limited to the time the seller owned the land, but instead, extends back to the original owner. The seller or grantor “shall warrant and forever defend” title to the property.
  • Zoning – governmental regulations that control land use.