Real Estate

Real Estate Ownership Questions and answers

No comments

Q:  When should you have Title Insurance?

A:  You should have Title Insurance for every piece of real estate that you ACQUIRE.  Whether you take title of a property through purchase or inheritance, you take on the liability that goes with that ownership.

Under the new regulations, a Title Insurance Policy can transfer to the heirs of a property.  They can inherit the title along with the title insurance.  However, if you receive a home or land as a gift, title insurance does not come with it, and you do not buy the title insurance policy at the purchase price of a property.  You are responsible to defend your ownership should a challenge come up against it from previous owners, their heirs, or lien holders.

In these tough economic times, desperate people can do desperate things.  You’re a sitting duck without feathers if you don’t have title insurance because a challenge can cost you more to defend your ownership than you can afford, unless you have an owner’s title insurance policy to cover those litigation expenses.

Q: When does your liability of real estate ownership stop?

A: When you croak. You are responsible for the title on land you’ve sold.  When you sell a home or land, you transfer ownership to the buyer by warranty deed.*  Don’t throw those policies away!

Title insurance protects you even after you sell. Because the contracts and the new title insurance for the buyer require you to convey with warranties, you become liable for anything that has ever transacted on the property. Hold on to that owner’s title policy, even if you let the property go.

Answers! Answers! Answers! If you have more questions about Title Insurance, we have more answers.

*Warranty Deeds are required in most Real Estate Contracts for Purchase and Sale.

Stephen CollinsReal Estate Ownership Questions and answers
read more

Money Pit

No comments

When you’re buying a home, what you don’t know can cost you.

There are great deals on the market right now, especially through REO’s (Real Estate Owned), also known as Bank Owned Properties. Bank Owned Properties are pieces of real estate that has been repossessed by the lender or bank. In many cases, you can pay a low purchase price for an amazing potential on an REO. The drawback is that the bank doesn’t know what’s wrong with the property. The bank doesn’t live there, so it doesn’t know if the place needs a roof replaced or if it just needs a new doormat. The bank can’t give you guarantees.

You can avoid buying a money pit with a home inspection. Get a home inspection before buying a home, especially an REO, that way you have an idea of what repairs will be needed, and you can consider those costs in your budget.

You can avoid owning a money pit with an owner’s title insurance policy. Purchase title insurance at the real estate closing, that way you can focus on fixing up your home without financial concern about somebody else trying to claim ownership after you’ve paid for it and spent money on repairs.

Title insurance gives you peace of mind about your legal rights to real property. It’s a one-time fee at closing that protects you for as long as you or your heirs have an interest in the property. It pays valid claims and covers the cost of a legal defense of your ownership.

As a buyer, you should be aware of how good a deal you’re getting by having a home inspection done ahead of time, then as an owner, protect that deal with an owner’s title insurance policy.

Stephen CollinsMoney Pit
read more

Am I Speaking English?

No comments

I don’t want to speak title jargon. What’s a Title Claim? What’s a Title Challenge? When I say there’s hidden risk, how can you tell if you can’t see it? I might just be making up words.

I can be pretty detached from Standard English. Real Estate is not a Romance Language—it’s full of big words that are often compressed into nonsensical acronyms. I’m an industry insider, fluent in Property Pidgin from any Landguage. My job is to translate it to you.

Let’s talk title. Real Estate Title is a combination of all the elements that constitute the highest legal right to own, possess, use, control, enjoy, and dispose of real estate or an inheritable right or interest therein. It is the rights of ownership recognized and protected by the law. Sometimes problems occur with the property title, including errors or omissions in deeds, mistakes in examining public records, forgery (yaouch!), or undisclosed heirs.

These are the kinds of problems you can’t see coming—someone down at the courthouse made an error in recording a deed, someone at the title company (not mine I hope!) missed a claim on public record, someone forged a document, or the heirs of a previous owner came forward within their allotted 30 years to stake their claim.

It doesn’t really matter what kind of title problem it is, the bottom line is that you as the property owner have to fix it. If your ownership is being challenged, you are responsible to defend your ownership. Make sense?

You have three options:

  1. Don’t defend your ownership and thereby lose your property.
  2. Rely on your own financial resources to either pay the claim or hire a lawyer to defend your ownership in a court of law (where you still might lose—then you’d be out the legal expenses as well as being out of your house).
  3. Buy Title Insurance which protects you from claims and legal fees.

You get to a closing table with a half-inch stack of documents to sign. I want you to walk away with a full understanding of the deal you just made, including the liability you take on with real estate ownership.

Don’t just take my word for it. For more real estate terms, check out the glossary at alta.org.

Stephen CollinsAm I Speaking English?
read more

Real Estate Ownership Liability

No comments

Q: When does your liability of real estate ownership stop?

A: When you croak. You are responsible for the title on land you’ve sold. When you sell a home or land, you transfer ownership to the buyer by warranty deed.* Don’t throw those policies away!

Title insurance protects you even after you sell. Because the contracts and the new title insurance for the buyer require you to convey with warranties, you become liable for anything that has ever transacted on the property. Hold on to that owner’s title policy, even if you let the property go.

Answers! Answers! Answers! If you have more questions about Title Insurance, we have more answers. Send us your comments.

*Warranty Deeds are required in most Real Estate Contracts for Purchase and Sale.

Stephen CollinsReal Estate Ownership Liability
read more

Equity Q&A

No comments

Q: My house is paid for and worth quite a bit—can I use the equity to purchase another house?

A: Yes. You can use the equity in your home by getting a line of credit, and then with that money, can do what you like. The bank you got the line of credit from does not need to take a look at the property you’re buying. Right now if you have equity in your house, real estate is a GREAT investment—take advantage of the great rates!

Holly Yelton was kind enough to help us with the answer. If you have a real estate-related question, please ask and we’ll be glad to address it.

Stephen CollinsEquity Q&A
read more

Short Sale, Quick Sale and Realtors

No comments

We recently had a question on our radio show about what is a Short Sale versus a Quick Sale. Both “Short” and “Quick” are terms referring to small measure, but in real estate, they’re not both talking about time.

A Short Sale is when we have to negotiate with the lien holders to accept less than what is owned on the loan. For instance, the house may be worth $100,000 in today’s market, but have a debt of $200,000 on it, thus we have to get the bank to accept an amount of $100,000 short of what is owed.

A Quick Sale refers to a property discounted so that it will move off the market as fast as possible, as in the case with a divorce settlement.

In both situations, the right way to sell the house is to list the property with a Realtor. You have to have a Realtor to market the real estate properly. We have a lot of great local Realtors, like Wendy Sawyer, who know the market, have access to the MLS (Multiple Listing Service) and other tools, and who operate with a professional approach and high ethical standard.

Again, this was a question that came up recently on our radio show, “Land Title Talk,” which airs Wednesday mornings at 8:00 to 9:00 on News Talk 1240 AM WFOY (online at www.1240news.com). If you’d like to join our live discussion with a real estate-related topic, call the station during the show at (904) 797-1919 or send a text to (904) 501-4481.

Stephen CollinsShort Sale, Quick Sale and Realtors
read more

Quit Claim Deed – Don’t Do It!

No comments

Get a warranty deed instead. A quit claim deed is not a “quick” claim deed, and it’s not fast. A quit claim deed is just a cleaning up tool. It’s like bleach—it has a purpose, but you don’t use it on colored clothes. And it can blanch your expectations.

When you quit claim deed interest in a property, you are conveying or giving all interest you have IF ANY (but you might not have any interest). There are no warranties. So therefore, if you bought a nice home and you got a title insurance policy to insure that, but then decided to do some estate planning and quitclaimed the home to your trust or family members, you have voided your title policy. DON’T DO IT. Quit claim deeds are great for cleaning up title related issues, but not much more.

Quit claim deeds can also be an easy way for someone to commit fraud. You can smell bleach, yes, but the odor of fraud often is the victim’s scent—undetectable until after the victim becomes the victim.

With few exceptions, always get a warranty deed instead of a quit claim deed. To discuss further, comment here, or listen to Land Title Talk on News Talk 1240 WFOY AM next Wednesday morning at 8:00. All of Land Title Talk can be found on this website here.

Stephen CollinsQuit Claim Deed – Don’t Do It!
read more

Short Sale Advantage

No comments

A Short Sale allows you to sell your home and the servicer agrees to forgive any shortfall between the sale price and the mortgage balance. Thus a “short” sale. This approach avoids a damaging foreclosure entry on your credit report.

The difference between a Promissory Note and a Mortgage is that a Promissory Note is a promise to pay back the loan. A Mortgage is the collateral document of the loan—if you don’t pay the Promissory Note, then it is paid with the Mortgage.

In the case of a foreclosure, the homeowner takes a credit hit, and the Promissory Note is still out there, so the lender can still come after the homeowner. The advantage of a short sale is that the homeowner avoids foreclosure and the Promissory Note is no longer an issue.

A short sale is better for a homeowner than a foreclosure because it is better on the homeowner’s credit, and avoids a deficiency and judgment that’s good for 20 years! We want the lender to forgive the deficit, and enable the homeowner to move to a place where he or she can be comfortable with the payments.

Stephen CollinsShort Sale Advantage
read more

Snow Forecast: Raining Northerners

No comments

While the North is hammered with winter storms, it’s raining snowbirds in our real estate market. Nobody wants to wish bad weather, but the positive side of blizzards is that there are property deals here in the Sunshine State. Northerners, come on down and buy some real estate!

Builders are having a time selling new construction. Right now, they’re building spec homes with no trouble selling to Northerners. People coming south want instant housing—nobody wants to wait to build. There’s actually a lot of construction going on in our area to accommodate this season’s buyers. The speculation homes are new, ready, and affordable…and you don’t have to shovel the driveway.

In the 1700s, William Bartram wrote of his travels to Florida:

I make no doubt this place will at some future day be one of the most populous and delightful seats on earth.

Today interest rates are low, there’s a good selection, in short: it’s a great time to buy in Florida.

Stephen CollinsSnow Forecast: Raining Northerners
read more