Month: April 2022

Title Insurance Myths

MYTH: You don’t need title insurance

Everyone needs title insurance. You may think you know the entire history of the house you’re purchasing, but it’s impossible to know everything. Title insurance protects your right to the property in the event that a previously unknown heir claims ownership of the property if it is later revealed that the “sellers” were not the rightful owners, or if liens against the property resurface. If you have an owner’s title insurance policy, you will not be responsible for paying any of the fees associated with protecting your right to the property, should these types of issues arise.

MYTH: New construction homes don’t need title insurance

Your home could be brand new, but the land on which the house is built isn’t. Chances are, the land had several previous owners before construction began. Buying property on such land opens you up to certain risks tied to ownership issues from previous owners.

Disputed wills, easements, and property liens are just a few of the issues common to land ownership. You could get caught in between the mess and end up losing your resources or, worse still, your new property as well. Title insurance is crucial even for a new home and should be among your list of priorities during the closing process.

MYTH: If no one challenges ownership, then the title policy is a waste

At the closing, when you purchase a title insurance policy, the closing company does the bulk of the work behind the scenes. The title company goes through many steps to make sure that everything is in place by that time, including conducting a comprehensive title search and identifying any potential issues. The team investigates the entire history of the property to ensure that you, the buyer, will be aware of any problems that will need to be addressed before closing. By the time the closing comes around, the title company has completed a great deal of research and legwork for you.

MYTH: Title insurance offers only minimal protection

When you purchase a home, you receive the “title” to the property. This title is your legal right to own it. Early in the home buying process, a title search is conducted to review the history of the property and uncover any issues that could limit your right to ownership. Even after the most meticulous search of public records, there can be hidden title defects, such as tax liens, forged signatures, claims by ex-spouses, and recording errors. These title defects can remain undiscovered for months or even years after you purchase the home.

MYTH: Title insurance is the same thing as homeowner’s insurance

Homeowners insurance protects you so you have the resources to pay for any damage that might occur to your property. Title insurance protects you from anyone else claiming your home is theirs or for some prior owner’s back taxes or encumbrances or any other real property dispute

Title First Agency: Dedicated to innovation and passionate about service, Title First Agency is your comprehensive, nationwide resource for title and real estate settlement services. Headquartered in Columbus, Ohio, Title First has branch offices throughout the Midwest and a robust virtual partner network throughout the country. Title First got its start in 1956 as an affiliate of a local law firm and has since emerged as one of the largest independent title agencies in the nation. Proudly servicing Realtors, lenders, builders, developers, law firms, buyers and sellers, Title First is equipped to serve your residential and commercial title and settlement needs.

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Should You Be Present During a Home Inspection as the Buyer?

Yes. The home buyer and the Realtor should attend the home inspection. A home inspection is a critical part of any home sale, and there are many misconceptions and often some confusion surrounding it. This is the best time for questions to ask and clarify items that will be included in the final report.

Buyers make an offer to purchase a home based on a few walk-throughs with their realtor. The inspector they hire will spend several hours thoroughly examining the house. If the buyer is not present, a golden opportunity is gone to see the home they intend to purchase through the eyes of an expert.

More often than not, the report will come back with a list of dozens of defects. Some can be quite expensive. There is no such thing as a perfect home, especially if the property is a few decades old. Don’t worry too much about the length of the list of problems; instead, pay attention to the severity of the problems. Many issues, such as loose doorknobs or cracks in the paved driveway, will be so minor you won’t bother fixing them right away, even though you know they’re there.

The following issues can be deal-breakers:

Faulty Electrical Wiring:
The electrical system is an important, and potentially hazardous, part of a home, which is why it is included in every thorough home inspection Newer homes have more supply of power and electrical outlets. Older homes do not. A good inspector should check the outlets throughout the home as well as check the interior of the electrical breaker/fuse box assuring that there are no “double taps” – two electrical circuits attached to a single breaker – as it is a fire hazard. The wires, conduits, and boxes should be securely fixed to the building. There should be no visible signs of damage or deterioration. There should be at least one ground rod or other approved grounding means present at the service.

Plumbing:
Some of these issues are obvious. Skilled inspectors are trained to find obvious, like a clogged toilet as well as the not so obvious, like illegal pipes that could result in being cited for plumbing violations. He will look around the entire home for signs of mildew, fungus, or mold related to water leaking from broken pipes and cracks in the ceiling or floor.    

Grading Toward the Home:
Water in the basement, damp or wet crawlspaces, foundation movement, cracking and settlement may all be caused by grading. Water in the foundation could lead to rot in the walls, framing members, and mold. Some indications of foundation movement include windows that are out of square; interior doors that have large, uneven gaps at the top when the door is closed; or floors visibly out of level. Some of the most experienced home inspectors believe that the most common issue they find during inspections is the lack of grading (improperly sloped soil) away from the home. 

Roofing:
A roof usually lasts about 30 years, so you will need to find out when it was installed. A home inspector will look at the quality of the shingles and know if any are curled, broken, or even missing which are signs that you might need a new roof soon.

The Bottom Line: A home inspection is the buyer’s last opportunity to discover problems with the house before purchasing. And it’s a chance for the seller to address those problems and negotiate pricing with the buyer.  If the buyer is present for the home inspection, the inspector can review his findings with the buyer directly and answer questions about the repair’s location and severity.

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Did You Hire the Wrong Realtor?

Good and professional Realtors should be held to a higher standard with their daily responsibilities and their fiduciary duty to their clients. Unfortunately, there are plenty of “bad Realtors” out there. Have you hired the latter to sell your home or find you your dream home? Here are three important red flags to watch for.

Communication

Does your real estate agent return your calls, text messages, or e-mails in a timely manner? If not you may have hired the wrong real estate agent. Time is of the essence in real estate, so if it takes your agent hours or days to get back to you odds are you might miss that new listing, an important deadline when you’re under contract, or a potential buyer if you are selling your home.

Financial Advice

When it comes to setting a home-buying budget, the best person to determine how much mortgage you can afford is you. Of course, your lender may pre-approve you for a certain loan amount, or your agent might run some numbers and advise on a price range to stick to. But at the end of the day, you are the only one to set a price range for buying a home. If you present that number to your real estate agent and they don’t respect it, then it’s time to move on. Don’t be pressured into buying a property that isn’t right for you or selling your home at a lower price than it’s worth. You have little to gain by working with a real estate agent who isn’t doing his or her job well and doesn’t have your best interests in mind.

Technology Skills

Technology is a big factor in real estate today.  Your agent should be doing everything possible to market your property. Whether it be blogging on the internet, using social media, taking high-definition pictures and video, using scanners, drones, sending documents for signatures electronically, or something else if a real estate agent is not up to speed on the latest tech they run the risk of slowing you down and losing out on deals. Only half of real estate agents use social media to market listings, a new NAR survey found. Find the one who does by looking at websites, Instagram, Facebook, TikTok, etc.

The Bottom Line: Successful agents are those who are passionate and enjoy what they do for a living. They have a passion for serving and helping people by showing them excellent properties within their budget. Real estate agents that do well are enthusiastic about what they do, are always presentable, and take care of their appearance. They are in the business to help clients find or sell their homes. Take your time to research and find the best in your area.

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Get Your Offer Accepted

After searching online real estate sites, visiting open houses, and going on tours with your Realtor, you’ve finally found your dream home. If you’re willing to pay the asking price, the process should be simple, efficient, and worry-free. But often it is not. In a seller’s market, there are more home buyers than there are homes on the market. Your full-price offer will probably have some competition, so how what are some ways you can craft it so that it lands the perfect home?

A qualified and knowledgable Realtor is important. He will be your right-hand man, especially when it comes to finding the perfect home, making an offer, and negotiating the sale. For the buyer, this is a very emotional, stressful process so it is important to let the Realtor guide and advise you. If you have researched and hired the best Realtor, he will have plenty of years of experience and plenty of deals under his belt, thus being your primary source when you make that offer.

Get your pre-approval letter that will show readiness to buy a home. Not only does it solidify how much house you can afford to buy, but it also helps you determine if you should buy a house for the total amount you’ve qualified for. Plus, when you can supply a preapproval letter with your offer, the seller knows you are a serious candidate and are ready to get the deal done. In competitive real estate markets, it’s basically guaranteed that you need a preapproval letter to have a chance at catching the seller’s eye. 

Limit the contingencies. Contingent offers are common because they protect the buyer from the conditions of unexpected repairs, insufficient value, and title defects. If any of the conditions aren’t met, either party can consider the contract null and void. Contingencies typically benefit the buyer, and you can’t expect a seller to get multiple offers to accept unnecessary contingencies. With multiple offers on the table, they have more leverage. 

Your Realtor should let you know, however, that there are contingencies you absolutely do not want to remove such as a home inspection. After all, the last thing you want is to purchase a home that you can’t afford the repairs for. Limiting contingencies can make your offer more appealing, but make sure you don’t give up too much. Again, your Realtor will be your guide on strategy and approach.

Offer earnest money, also known as a good faith deposit, to put down prior to closing. Not always required but a good idea to offer it to show the seller you’re serious. When a buyer and seller enter a purchase agreement, the seller takes their home off the market. If the buyer backs out and the seller needs to relist their home, it can be very costly and they might have missed out on more serious buyers. 

Earnest money protects the seller in case the buyer backs out of the agreement. Typically, it’s around one to three percent of the sale price and is held in an escrow account until the deal is finalized. If the deal goes through, the earnest money is then applied to the buyers’ closing costs or down payment. 

The Bottom Line: Over the past couple of years, the real estate market has been so hot that it’s not unusual for homes to go off-market in days. We are even seeing homes that need serious work breaking price records. It’s easy to feel pessimistic if you are a buyer. Don’t give up. Make sure you have the best Realtor as your wingman and know that the key to getting your offer accepted in a heated market is to present the easiest, stress-free scenario for a seller.

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