Real Estate

JUST SAY “NO” TO INSANITY

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Joey came home one day to find a man in his living room. The man said, “In my Father’s house are many mansions.” “This ain’t one of them,” Joey replied.

“I’m not breaking and entering,”said the man. “This is my house.” He pulled a deed from his pocket.

“I’ve got a deed too,” said Joey, “and it’s not printed on the back of a psychiatric release form.”

“I’m recycling. Save the planet!” said the man.

“This is crazy,” said Joey. He ushered the man out, but he could not get rid of the man’s claim.

No matter how insane /bogus/absurd/bizarre a title challenge is, the homeowner is responsible to defend his ownership rights.

So Joey crashed in an investment for $10,000 to pay a retainer fee for an attorney.

Legal fees kept coming in after that for his title defense-filing fees and billable hours. Joey had planned to buy a new truck, but he realized he’d have to hold off on that, just like he’d have to put off retirement another twenty years, and drive his old truck the whole time. Joey was going through money like his toes were going through the ends of his socks.

Finally the title claim case came to a close and Joey lost his house.

What! That’s not how the story is suppose to go!

Title claims don’t always follow “supposed to”.

But Joey lost the house to a crazy man!

Joey didn’t have title insurance, which would have paid for not only his legal defense, bu would have also paid out the policy amount when the court failed to rule in his favor. So who’s the real crazy on in this story?

For a nominal, one-time fee for title insurance, you can stop further legal expenses regarding title claims against your real estate. Don’t go insane with court costs on title claims.

Land Title of AmericaJUST SAY “NO” TO INSANITY
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Congrats Habitat for Humanity of St. Johns!!

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It took 486 Volunteers only 108 Days to make homeownership come true for a local family.  Congratulations to Habitat of Humanity of St. Johns for the completion of another home in St. Johns County!!

Habitat for Humanity of St. Johns has helped over 100 families realize homeownership in our county, allowing them to establish a stable home environment in which to learn and grow and share with each other.

Habitat for Humanity/St. Johns offers homeownership to St. Johns County residents based on need, ability to pay, and willingness to partner with the program.  Qualified applicants put in 250 to 400 sweat equity hours on the construction of their home—it’s a hand up, not a hand out.  The home is then sold to the new homeowner with an affordable monthly mortgage payment.

It’s a great deal for a new homeowner, and a great deal for our community!!

Congratulations to Delores Washington on your new home, and congratulations to Habitat for Humanity/St. Johns for building hope.

If you would like to contribute or learn more about Habitat for Humanity St. Augustine/St. Johns, please visit their website at www.habitatstjohns.org or call (904) 826-3252.

Stephen CollinsCongrats Habitat for Humanity of St. Johns!!
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Habitat for Education

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The National Association of Realtors cites increased education as a benefit to home ownership.  You can run the numbers of renting versus buying and see that it makes a lot of financial sense to purchase a home rather than rent, but you cannot realize the full value of home ownership until you see what it does for a child.  Habitat for Humanity is all about that!!

A stable home allows parents and/or guardians a safe place to establish positive learning routines and homework zones—staging for books, backpacks, and supplies as well as a place to ask questions and seek answers.  Habitat for Humanity St. Augustine/St. Johns helps area families by supporting this home learning environment as part of their mission “to build homes, community and hope.”

In addition to the financial counseling requirement for housing participants, Habitat St. Augustine/St. Johns also offers a college scholarship to its local families, and has a monetary rewards program for Habitat children in Kindergarten through Twelfth Grade.

If you would like to contribute or learn more about Habitat for Humanity St. Augustine/St. Johns, please visit their website at www.habitatstjohns.org or call (904) 826-3252.

 

Stephen CollinsHabitat for Education
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Please, Please, Please Get A Survey!!!

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I am not making this up, though I wish I were. Maybe by sharing this story I can prevent you from making the same mistake of not getting a survey when you purchase property. (Please note that certain aspects of the story have been changed to protect the identity of those involved.)

This is the tale of an older lady who thought she was getting a deal on a distressed property with a house. She paid $35,000 in cash and closed without a survey…because she didn’t need one because she was paying cash—you only need a survey if there’s a bank involved, right? She moved into the house and lived there for six months before she found out what she had actually paid for was the four acres of vacant land behind the house.

The house had been winterized, there was a sign out front, and the buyer lady was using a Realtor. The buyer paid cash for a Bank-Owned Property (or REO), and closed without a survey. The legal description of the contract used the abbreviated tax reference. The bank had winterized the wrong house, and six months after the buyer was in full possession, the couple from California who owned the house politely informed the lady that she was in her house.

The lady had purchased the four-acre piece of property behind the one acre up front where the house was. Now she’s going to have to pay another $64,900 for a home and land she thought she already owned. She didn’t have a clue. She had paid $35,000 for four acres of vacant land worth about $11,000—an expensive mistake! She just spent $29,900 to find out what a $300 survey could have told her. What she thought was a good deal turned out to be a nightmare all because she wanted to save $300 on a survey.

For the bank, “AS IS” is “Where Is.”

Please, please, please don’t make this mistake—GET A SURVEY!!! Without a survey, title insurance can’t cover you for this kind of error. Spend a few hundred dollars on a survey, even if it’s a cash deal—ESPECIALLY IF IT’S A CASH DEAL. Spend a few hundred dollars on a survey to save thousands of dollars in a mistake.

If you are paying cash, you need a survey more than ever because your cash is the money at risk.

Really this is Reason Number 2 to get title insurance (Remember: the Number 1 Reason is because it’s expensive to be innocent!). It shows up on my true story list of “1001 Reasons to Get Title Insurance” as Number 7.

Stephen CollinsPlease, Please, Please Get A Survey!!!
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What You Don’t See Can Really Bug You

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In June 2014, my band OE-2-KB (Old Enough-2-Know Better) had a gig along the St. Johns River.  It had rained all day, but Eddie said he had a thousand-foot tarp that we could put over everything.  So we started setting up and we were watching the radar…and wondering if that tarp could really cover all of our band equipment.

There were a few little blind mosquitoes around, but they didn’t bite, so no big deal.  We played our first set, took a break, and came back.  By then it was very obvious the atmosphere had changed—there were blind mosquitoes everywhere!!  At first I thought they were just around the lights, but they were everywhere!!  Still, they didn’t bite, so we started our second set.

It was like the plagues of Moses—the blind mosquitoes were in our mouths, in our ears, and all over the keyboards, the guitars, the drums.  I’ve never seen anything like it before.  My brother, Rusty, had pages of music stuck together with dead bug bodies.  We had been worried about the rain, but what we didn’t see coming that stopped the music.  The same can be true of real estate title claims.

Owner’s Title Insurance addresses not just the title problems you can see in public records, but also the hidden risk.  

Home ownership should be hassle-free.  You should be able to check the radar, have a big tarp handy to cover everything, but even so, challenges to your ownership can happen.

Most property disputes are something small—not a big claim like fraud or forgery on a deed, or someone trying to claim ownership of the entire property.  Usually it’s a matter of feet, an encroachment.  It’s the freak bizarre things, and you just don’t see them coming—that’s why you get title insurance.

Title Insurance provides an initial service when you pay for it—a title search—and provides a secondary service—legal representation and / or compensation of the policy amount—at no additional charge to you should the title come into question.   Title Insurance can’t always prevent an attack on home ownership rights, but it can shield the Homeowner from court costs in a legal defense of property title.

Title Insurance helps keep title claims from bugging you.

(If you’re looking for OE-2-KB, you can keep up with us on Facebook at https://www.facebook.com/OE2KB or our band website at http://www.oe-2-kb.com.)

 

Stephen CollinsWhat You Don’t See Can Really Bug You
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Title Insurance Provides a Free Collection Service

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There are 1001 reasons to buy Title Insurance, and 1001 reasons it’s good.  What you may not realize, though, is that Title Insurance benefits more than just the individual homeowner.  Because Title Insurance tries to eliminate risk, it provides a free collection service as part of its job, which helps society as a whole.

Title Insurance forces the issue.  From mortgage liens, to judgments, and child support, Title Insurance not only exposes the problems, but insists on resolutions.  Collection of these moneys owed is simply part of the function of Title Insurance, no added fee.  Beyond what government and private mortgage companies can accomplish, Title Insurance enforces the payoffs that are supposed to happen.  Thus the value of Title Insurance is a lot greater than the protection of a single homeowner.

 

Stephen CollinsTitle Insurance Provides a Free Collection Service
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Sense of Wisdom & Humor

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Why are there more jokes about attorneys than about title companies?  Because nobody understands what title companies do, answers my attorney brother, Rusty Collins.  Now that’s funny, but it’s sad too.  You can lose your sense of humor real fast if you lack a sense of wisdom about real estate ownership.  Without knowledge of title insurance, your stake is at stake, the land you own and the money you put into it.

Title Insurance helps to protect your financial investment in real estate.

Title Insurance is a policy that protects the real estate owner from financial loss due to a challenge against his or her real estate ownership.  Without it, you could lose your property and your financial investment.  In simple terms, Title Insurance works in two ways:

  1. Prevention
  2. Protection

Though title insurance works mostly through prevention, it offers security via financial protection from the massive costs of litigation and other legal expenses should a problem, challenge, or complication to a Florida homeowner’s title arise.  No matter how much effort is put into this prevention, bad things can still happen.  It’s expensive to be right when someone thinks you’re wrong.  Owner’s Title Insurance provides and pays for all costs associated with a title claim (whether through settlement, legal defense, and / or reimbursement of the policy amount to the homeowner if that defense does not prevail).

Knowledge is realizing the difference between an acceptable risk and an unacceptable risk.

Wisdom is taking precautions to avoid unacceptable risk.

If you value your land, I encourage you to learn more about Title Insurance, and Land Title offers a variety of free educational resources, including the following:

  • Land Title Blog at www.GoLandTitle.com
  • “Land Title Talk” radio show every 1st and 3rd Thursday of the month on 102.1 FM WFOY (http://www.1021news.com) from 8 to 9 am. Listeners are encouraged to call in with your real estate-related or legal questions or comments
  • Call or stop by the Land Title Office. If you have questions about a title policy and what it can do for you, or if you need to find out if your property even has a title policy, we’ll be glad to assist you at no charge.  Land Title is located in the Lewis Point Plaza at 2495 US Highway 1 South, St. Augustine, or call us at (904) 797-9600.

 

Stephen CollinsSense of Wisdom & Humor
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Claims Versus Reality in Title Insurance

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The perception of Title Insurance is that for every $100 that gets paid into the pot, only $6 of that gets paid out.  The reality is that for every $100 paid in, $94 goes into making sure no more than $6 will have to go towards a title claim.

While Title Insurance takes on the financial responsibility for title-related issues, that financial responsibility is limited to the policy amount—the cost is much greater than what’s covered.  The power of Title Insurance is the preventative work that goes into it.

Title Insurance is NOT casualty insurance—Title Insurance is PREVENTATIVE insurance.

Coverage:

Title Insurance coverage is unique because it reaches both forwards and backwards at the same time to protect the homeowner.

Title Insurance is good from the beginning day of the policy backwards.  It covers everything that happened before the real estate acquisition, including all unforeseen title flaws, and the policy pays for litigation should someone challenge the ownership through a lien, claim, or taxes.*  Thus the coverage protects the homeowner during their ownership of the property and for everything that happened before they took title.

Title Insurance insures the homeowner’s financial interest forwards into the future, even protecting them after they sell that property.  Because the Contract for Purchase and Sale typically requires the Seller to convey ownership with warranties, the Seller becomes responsible for anything that has ever transacted on the property. Thus the homeowner retains liability for their link in the Chain of Title even after they sell.  A Title Insurance Policy protects the homeowner for as long as that person has a financial liability to the property…which is until death.

Service:

The Title Insurance company’s objective is in lockstep with the consumer’s best interest:  to avoid questions or challenges of the homeowner’s title.  Owner’s Title Insurance is primarily for prevention of claims against home ownership, and a title search is part of the risk assessment.  Thus in the examination of public records, the title company has a vested concern to find any and all complications to the ownership title, in fact to kick the proverbial sleeping dog…on purpose.  We’d rather find out now (rather than after the fact) whether or not that dog has teeth and a temperament for biting.

Though Title Insurance works mostly through prevention, it offers security via financial protection from the massive costs of litigation and other legal expenses should a problem, challenge, or complication to a Florida homeowner’s title arise.  No matter how much effort is put into this prevention, bad things still happen.  It’s expensive to be right when someone thinks you’re wrong.  (Just remember, another person’s perception is reality.)  Owner’s Title Insurance provides and pays for all costs associated with a title claim (whether through settlement, legal defense, and / or reimbursement of the policy amount to the homeowner if that defense does not prevail).

Cost:

The cost of Owner’s Title Insurance is promulgated by the State of Florida, and the current rate has been the same for over 20 years.  It is a nominal fee compared to litigation costs.  Furthermore, Owner’s Title insurance is a one-time fee, typically paid at the closing of a real estate transaction.  Once it’s paid, it’s paid—no monthly premiums, no annual fees—no additional charge to the consumer, the homeowner.

With Owner’s Title Insurance, consumers pay a set amount for financial protection against the unknown cost of hidden risk to home ownership. 

The Big Picture:

Title Insurance plays a vital role in Florida’s recovering housing market.  As a source of financial protection, Owner’s Title Insurance assures potential Florida buyers they can invest in real estate with stable value backing that investment.

Owner’s Title Insurance adds real value to real estate rights, thus it benefits every Florida citizen.

Any further questions, tune into “Land Title Talk,” on the First and Third Thursday of each month from 8:00 to 9:00 a.m. on 102.1 FM WFOY (http://www.1021news.com).  Please call or text during the show to comment or ask about real estate-related issues.

*Please note Title Insurance does have exceptions.

 

Stephen CollinsClaims Versus Reality in Title Insurance
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Agreement for Deed

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Agreement for Deed also known as “Contract for Deed”

You’re looking for a house to rent because you can’t afford to buy.  Landlord comes to you and says:  “You can rent to own this house.  We will use your security deposit and first and last month’s rent towards the down payment if you decide to buy.”

Reasons you (the tenant) would do this:

  • Lock in purchase price in a low market (while prices are down) so you can build equity
  • Effort and love and work you put into a home will be yours to keep
  • So long as you make the payments, the lease doesn’t expire and it’s the same monthly cost year to year (no rent increases)

Reasons your landlord thinks this is a good idea:

  • Keep the tenant
  • Tenant will upkeep the property better
  • Stability of who’s in the property
  • If tenant doesn’t pay, landlord doesn’t have to foreclose—he can just evict them
  • With the recording of an Agreement For Deed, he can even get the tenants to pay for the taxes with homestead exemption and insurance
  • Tenant is responsible for all costs of repairs and upkeep.

Sounds great?  It may look like a Twinkie, but the filling is something you do NOT want to step in!  Here’s why:

  • You (the tenant) could be paying five years with the intention on getting the property…and at the end the landlord has issues—tax liens, judgments, landlord dies, and the list goes on and on….and on! All your hard work, effort, love, repairs go to waste.
  • Your landlord would still have to foreclose an agreement to deed*. Don’t think that this type of transaction gets your landlord out of having to foreclose.  A Three-Day-Notice isn’t going to cut it.  (You might like this actually.)

In short, with an Agreement for Deed, you (the tenant) have all the risk with no security.  And your landlord doesn’t have all the shortcuts he thinks are available to him.  It’s not what you think it is.  It’s not what your neighbor told you it is.  It’s not what you heard on TV.

Do a Deed and Mortgage instead of an Agreement for Deed.*  Have your landlord deed you the property so that you will own it.  In exchange you will give him a promise to pay (known as a promissory note) together with a collateral document (known as a mortgage) giving him the right to take back the home if you don’t pay.

Reasons this is a better idea for you as a tenant:

  • You won’t be a tenant anymore—you’ll be the owner.
  • You’ll be the owner, so judgments and/or liens against the landlord, or death of the landlord won’t affect your ownership.
  • Interest on homestead property is tax deductible—rent isn’t.
  • Security, security, security, security so long as you make your payments.

Reasons this is a better idea for a landlord:

  • The foreclosure process on a Deed and Mortgage is more standardized—less loopholes for you to use against him.
  • The landlord no longer own the property; therefore, he has no liability for your grandmother who is visiting and broke her hip on the front steps of the property.
  • The landlord is not responsible for repairs.
  • The landlord is not responsible for the taxes any more.

 

*Contract To Deed, Rent-To-Own, Lease Option

 

 

Stephen CollinsAgreement for Deed
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Great Deals in Real Estate, Especially Foreclosures

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If you haven’t noticed lately, there are some great deals in real estate! Look around—it’s a buyer’s bonanza! If you’ve got the finances, real estate is a great investment—take advantage of the low rates.

Holly Yelton recently reported that lending is loosening up.  She is doing quite a few loans on condos, FHA and VA loans, construction loans for both primary residence and second homes, and down payment assistance for first-time homebuyers (yes, though the Federal program has ended, there are ongoing programs for first-time homebuyers). So that’s good news for real estate buyers.  Furthermore, there is a home fix loan, which is designed for a distressed property, such as a foreclosure.

The foreclosure properties out there are often great deals, but may need a little work. The home fix conventional loan product Holly mentioned is only available for a primary residence, but it is well-suited for buying a house that’s been foreclosed on, making a great deal even sweeter!

Stephen CollinsGreat Deals in Real Estate, Especially Foreclosures
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