Month: July 2023

Most buyers acknowledge that when they are buying a home title insurance is a vital part of the transaction. Title insurance protects the buyer from any unanticipated property issues. Are there risks if title insurance is not bought? Absolutely.

Buying a home is one of the largest investments anyone will probably ever make. You are prepared, you have stayed within your budget, the home has been inspected and the home insurance is locked in. What’s the worst that could happen without title insurance?

• Unknown Liens on the Title: Occasionally businesses will file a lien against a home, which means they are legally entitled to any proceeds made in the sale of the house to settle a debt the seller owed them. This lien is attached to the home, not the seller, so it will end up being the buyer’s issue. Examples: contractor’s fees, taxes, and child support. A title company will do a search on the home to check for any of these claims.
• Unrevealed Heirs: You can lose your home, quite literally. Upon the death of someone, the ownership of their home can end up in the hands of the heirs either by direction of a will or in the absence of a will, to the closest living relative in accordance with the county/state law. However, there might be heirs that are missing or unknown at the time of death that could appear years later and claim part ownership and will ask for financial compensation for their portion of the property. Or, they can claim that the home is theirs. With title insurance, the new owners will be given money for their legal bills if the issue ends up in court, plus insurance will pay any compensation they might be required to give the missing heir.
• Encroachment Issues: Encroachment occurs when someone, such as a neighbor or a construction company, takes over part of your property without permission or proper legal notification. This happens due to an inaccurate survey or otherwise. Title insurance covers these unknown risks that are not agreed to in the sale, but if discovered at a later date will interfere with the title.
• Identity Theft and Fraud: Title insurance provides a clear chain of ownership for the home. The real estate industry experiences millions of dollars worth of fraud every year. Documents such as deeds, transfers, and even wills are forged. This will all be covered by a title policy.

The Bottom Line: Essentially, there are no perfect titles. Government restrictions, utility easements, claims of adverse possession, and tax liens are examples of limitations or defects that can impact a title. Title searches will uncover a lot of these limitations or defects. However, there are some that may not be discovered in even the most diligent title search. Title insurance protects you from these risks.

Why would anyone do a “rent to own” agreement? This process can be a way for people with limited savings or with questionable credit scores to buy a home. This type of agreement allows for the opportunity to save for a down payment. If there are credit challenges, this process can buy some time in the home before having to qualify for a mortgage.

In the contract, a portion of the rental payments will go toward the home purchase. The contract will stipulate what the price of the home will be when the lease ends. At the end of the lease, the renter acquires a mortgage for the property and finalizes the sale.

State laws vary on rent-to-own contracts, but typically, the deals can be set up any way the buyer/tenant and seller/landlord prefer. Both parties must agree on the purchase price, which can be tricky when the sale is happening several years in the future. In a rising market, for example, the seller might want the buyer to pay more than the current value of the property.

There are two types of agreements:

• A rent-to-own contract also called a lease purchase, refers to the contract where the buyer is legally obligated to purchase the property at the end of the lease.
• A lease with the option to purchase also called a lease option, gives the buyer the right to buy the property at the end of their lease term. In other words, the buyer is not contractually obligated to purchase the home.

The terms rent-to-own and option to purchase are sometimes used interchangeably so both the seller and the buyer should be clear about the nature of the contract before signing it. In particular, the buyer should be aware of the terms and conditions so they do not mistakenly agree to buy the home when the lease ends.

Until the tenant exercises the option and purchases the rental property, the premises are owned by the landlord.  The title to the house remains with the landlord until the tenant exercises the option and purchases the property.

It’s often advised to consult with a real estate attorney to clearly define the details such as when rent is due; how much of the rent will go toward the purchase; who takes care of any repairs and the general upkeep of the home during the lease period and so forth. Once the best terms have been reached for both parties an inspection should be conducted with an arrangement of payment by the landlord. An inspection will single out any major issues that could end up being a big expense going forward as well as a way to protect the person leasing from any claims of damage if the intention is not to buy at the end of the contract.

The Bottom Line: Renting to own may be a great option for people that want to own but have a poor credit score or don’t have the money for a down payment. Additionally, this might be the best option for a seller in a market that isn’t doing very well. There are plenty of pros and cons that come with this process, so it’s in the best interest of everyone to consult with a real estate attorney as well as a realtor to help make this decision.

Selling a home is often a long and complicated process that requires skills, strategies, and the best realtor on your team to succeed. Some homes seem to effortlessly hit the market and sell quickly. What’s the secret behind these sales? Key strategies that the highest performing realtors will tell you:

PRICE RIGHT: Get the perfect most competitive price point and your home won’t be sitting on the market long. Your realtor should be proficient in determining the price by using comparables in your local area. Data shows that pricing a home slightly below market value and on par with the lesser competition is the best way to get the most money. Aggressive pricing like this can set up the conditions for a bidding war as people tend to be motivated by the fear of missing out on a great deal.

ONLINE MARKETING: Numerous buyers go to realtors after finding their dream house online. An outstanding web presence is proving to be one of the most effective ways to get buyers into your home. It’s important that you have a realtor on your team that understands how to utilize all the resources available online. The content they create to showcase your home must be consistent and of high quality. Photos should be professional and captured in the best light and staged appropriately. Adding descriptions to pictures is another way to grab the buyer’s eye. Everyone loves a good story.

KILLER FIRST IMPRESSION: After a buyer looks through your online presence, they may do a drive-by and what they see will either get them in the front door or have them drive to the next option. Powerwash off the mud, dust, water stains, and accumulated dirt. Freshen up the landscaping with mulch and annuals, trim overgrown shrubs, and clear away any fallen debris. Don’t forget to wash all your windows and if needed – refresh and repaint your front door. Some of the best realtors will have a crew at their fingertips ready to help make your home look its very best. After all, the realtor wants you to sell fast, too. He should have all the resources to find the best vendors in your area that he has worked with before.

STAGE: The atmosphere inside your home must be appealing and void of any personal collections, keepsakes, photographs, and such. The buyer needs to imagine themselves living there. If you can’t hire a professional stager, your realtor should be able to guide you in maximizing the full potential of your home by rearranging furniture, removing pieces to make rooms look larger, and making the very best welcoming impression.

The Bottom Line: The condition of your home is key to how quickly you will sell it. A house that is well-maintained coupled with the above tips will sell faster than a house that hasn’t been taken care of. If the home is in disrepair but is well staged, makes a good first impression, is priced right, and is marketed well will fall apart during inspections. It’s important to know what upgrades and renovations you need to do before listing your home. Work with a professional, experienced realtor who knows your market and can provide expert advice to streamline the selling process and increase all chances of a quick sale.