Tag: title insurance

Paying Cash For a House

You’ve offered to buy a home for cash and it has been accepted. You will make the earnest money deposit and provide the evidence of the available funding as soon as possible, if not before signing the contract. It’s still important to get a title search done, conduct a final walk-through, have inspections all before you go to closing where you will sign paperwork to transfer the property.

Buying a home for cash may feel great, but it’s not always the best choice for everyone who can afford to do it.

THE PROS

Faster Closing

First, sellers may take less than the asking price to a buyer who offers cash. Closing costs are lower and there aren’t any fees for a bank attorney or mortgage broker. There are no loan origination fees or other lender fees assessed. During a typical home sale, it averages about four weeks to close. If you’re buying in cash without a lender the closing can happen within as little as a week.

No Contingencies

Mortgages can fall through for buyers that are preapproved. When you pay in cash, you eliminate that possibility. Presenting a cash offer removes the need for a financing contingency which is usually a requirement in a real estate transaction where the buyer is using bank financing. Depending on market conditions, the buyer may present a lower offer than what other bidders with financing are offering the seller. The seller may be willing to accept a lower purchase price in exchange for being able to close a deal quickly.

You Own Your Home

Bottom line, if you’ve got a mortgage, you don’t actually own your house — the bank does. When you buy a house in cash, you can feel secure knowing that no one can take that house away from you, and big, unexpected problems like a job loss won’t leave you without a roof over your head. Furthermore, you have immediate equity in the property.

Interest Money is Saved

Even today when interest rates are extremely low, interest paid on mortgage loans adds up to a large sum of money, sometimes you would be paying nearly double the asking price of the home.

THE CONS

Tying Up Your Funds

If you spend your life savings buying a house in cash, you’ll tie up all your money in one large investment. The money you use to buy your house isn’t liquid (meaning you don’t have direct access to the cash, and you’d have to sell your home to get your hands on it), so if you need your money for any other reason, it won’t be readily available. Additionally, you may face a shortage of cash that could have been used to invest in other lucrative assets. Taking some of the cash you use to pay for a home and investing it instead, could possibly make you more money in the long run.

No Tax Deductions

A buyer that uses a mortgage to purchase a real estate property enjoys tax breaks on the mortgage interest payments. When a buyer decides to purchase a home using cash only, they miss out on the tax deductions that they would’ve enjoyed if they used mortgage financing to complete the transaction.

Extra Title Protection

Reviewing the title for any other claims, liens, or issues that could prevent you from taking full ownership is all part of the home-buying process. The title research takes place whether you pay in cash or get a mortgage, and it’s always smart to get title insurance on your investment, which will protect you in the event that the title research missed any claims.

When you get a mortgage to buy your house, there’s another entity interested in making sure the title is clear and that you stay in the house and keep paying your mortgage: the mortgage lender. Your lender will secure title insurance, too, so that if there is a claim filed at some point, you’ll have an additional layer of protection that a cash buyer wouldn’t have.

The Bottom Line:

It’s scary to spend your entire nest egg in one place. If you can pay cash for a house and still have money left over for emergencies, home repairs, and other unexpected things that come your way, paying in cash is probably a great financial move. On the other hand, if paying cash for a house completely wipes you out, you might want to reconsider.

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Prepare Your Home to Weather Cold Temperatures

Indoor Preparations

  1.  Insulate exposed pipes to prevent them from freezing. These pipes are often found in crawl spaces, exterior walls, attics and garages.
  2.  Make sure your attic is properly ventilated and insulated. This can prevent ice dams and costly water damage.
  3.  Test your heating system early to make sure it works before it gets too cold.
  4.  Replace your air filters and make sure vents are clean and clear.
  5.  Insulate your water heater to help it work more efficiently in cold weather.
  6.  Test your smoke and carbon monoxide detectors. Heating, candles, holiday décor and storms can increase the risk of house fires and dangerous CO levels during the winter.
  7.  Make sure your doors and windows seal correctly. In some cases, you’ll need to seal exterior gaps with caulk. In other cases, you may want to invest in more energy-efficient windows.

Outdoor Preparations

  1.  Check the roof for loose, damaged or missing shingles. Make repairs before the winter storms hit to prevent more serious damage to your roof and your home.
  2.  Clear out all the gutters to make sure water drains properly. This can prevent expensive water damage inside and outside your house.
  3.  Shut down your sprinkler system and blow out the line. (You may want to hire a local professional for help.)
  4.  Disconnect and drain outdoor hoses and faucets to prevent freezing.
  5.  Repair cracks in driveways, walkways and stairs leading to your house. This makes your home safer and makes it easier to clear snow.
  6.  Put away or cover patio furniture, barbeque equipment, gardening tools, etc.
  7.  Stain or seal your deck so it is more resilient during winter storms.
  8.  Check the trees in your yard and make sure there are no weak branches that could damage your home (or someone else’s property) if they broke under a heavy snowfall or in a windy storm.

We wish you well this winter! Contact us anytime if you have questions about your home financing options.

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Selling a Home During the Holidays

Putting your home on the market to sell during the holiday | Winter season is not the most optimal but if you hire a Realtor that knows your market well, you still can sell your home at a competitive price. If you are living in the Northeast, Midwest, or other cold areas, the following are some ways that can help to sell your home faster and at a fair price during the busy month of December and then through the darker months of January and February.

There are fewer homes being sold now, and winter in general, which makes people nervous about putting their homes on the market. More home buyers are house-hunting in the Spring months when the weather is warmer, and the days are longer. But, you might be surprised to find out that Winter could actually be a great time to put your home on the market. The new year is a time when most people are back at work after the holidays and will often search the web for their next big move. If you are serious about selling your home, it should be online and marketed early to ensure they don’t miss this audience.

Because it isn’t a high-selling time, you will need a very experienced Realtor to help price your home as it can be complex. You don’t want to scare off buyers by pricing too high or even too low, causing buyers to wonder what’s wrong with your house. When your home is put on the market in the winter, buyers often assume you are desperate to sell your home and may lowball you thinking you’ll sell for any price. Buyers that are house hunting during this traditional off-season time, usually mean they are eager to buy and more willing to negotiate the price.

One of the beauties of the holiday months is that many people adorn their homes with festive lights and decorations. People purchasing a home during that time may see the neighborhood in a different light—more festive and cheerful—and may be more willing to consider an area that they may have been on the fence about.

Stirring up some interest during cold January is to price your home slightly under comparable homes in order to draw in multiple offers. More offers tend to drive up the value of your home prompting more competitive bids from buyers who often will end up paying more than the initial asking price.

The real challenge might be to help dress up your home after the holidays in dreary January and February weather. To help make your home feel more welcoming, shovel the walks, add outdoor illumination along paths, light candles indoors, add cozy throw blankets, have holiday-type smells such as cinnamon or cookies.

Furthermore, during the cold, any problems you may have in your home can become more prominent including drafts and leaks. To help lessen these potential problems, crank up the heat so buyers feel toasty warm and will be less likely to notice any issues.

While it may be difficult to sell your home during the holidays and January and February, it’s not impossible especially if you hire an experienced Realtor who knows your neighborhood well and can guide you to list your home at the best possible price. Sometimes, waiting to list your home during the beautiful Spring months when the sun is out and the trees are blooming and flowering can mean that you could miss out on potential buyers. Many Realtors will tell you, some of their best sales happened in the new year.

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The First Offer Is Usually The Best

Often, when a seller has taken the time to properly prepare their home for sale, and they’ve hired the best Realtor who takes pride in presenting and marketing that home well a seller will receive offers right away.

The time a home is on the market to sell decreases its value. The longer it is listed the less interested buyers and Realtors are in the property. People will begin to wonder what is wrong with the property. Sellers are in the best position to get a good price for their home when it is new to the market. If the home does not sell buyers become suspect.

So that first early offer? Sellers tend to reject it because they felt it happened too quickly and they want to hold out. Days, weeks even months later, they find themselves settling for less. That first offer should always be taken seriously and it’s probably the best opportunity you’ll have to control your price and terms. It might not be what the seller was hoping for, a good Realtor will walk the seller through a counteroffer, and even the ability to negotiate for other details can work for the seller.

With a “for sale” sign in any yard too long, no matter the reason, it makes it more difficult to stir up interest. As the days go on, the home becomes less desirable. The market could change and take a downturn leaving the home that is priced on the comps when it was listed, now priced too high. An identical home could enter the market at a lower price. 

The Bottom Line: The first three weeks are usually the most active that a property will have. If an offer is made during that time it’s worth working with that offer unless it’s ridiculously low.

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Rights of a Property Owner

The ownership of private property is one of our most cherished freedoms. Property divides power between the government and the individual and allows citizens to be rewarded for their own industry. But to fully enjoy the benefits of property ownership, knowledge and vigilance in defending and protecting those rights when they are being threatened.

In instances where either private or public actors are seeking to challenge your property rights, be prepared to defend yourself by knowing, in advance, what your rights are or by consulting an experienced real estate or eminent domain lawyer.

Following these tips will also help you better protect your interests as a property owner.

Know Your Rights

When you own real property, you have a bundle of legal rights that go along with the ownership, including:

  • The right of possession
  • The right of control
  • The right of exclusion
  • The right to derive income
  • The right of disposition

Property rights can also extend to:

  • surface rights: the right to use the surface of the land
  • riparian rights: the right to any water on your property
  • subsurface rights: the right to use what is below the surface such as oil, gas and minerals
  • air rights: the right to the area immediately above your property

Of course, these rights have exceptions and limitations and may also come with legal obligations (e.g, taxes). They may also be lost, voluntarily transferred or even regained after a period of time such as when you rent a portion of your property and the lease terminates.

Property rights may also vary from state to state and from community to community. They may be subject to local, state, and federal laws. Knowing your rights as a property owner makes you more aware of what you can and cannot do with your property, and how to protect it from intrusions or encroachments.

Familiarize Yourself with core title documents

There are many documents that contain vital information about a landowner’s property and the extent of their ownership rights. Among these documents, some of the most important typical ones are the following:

  • The Deed and other documents of title and exceptions to the title, sucah as easment
  • The Deed of Turst or other documents showing that the property has been mortgaged or collateralized for payment of a debt
  • Survey and boundary documents
  • Zoning maps and master plans\

Go Through the deed to the property

Property deeds are signed legal documents that transfer the ownership of the real property from one person to another. For the deed to be legally operative, it must identify both the grantor/seller and the grantee/buyer and contain an adequate description of the property, among other elements.

There are different types of deeds, each type providing different levels of protection to the grantee, as well as the obligation of the grantor. Deeds also typically include deed restrictions, which are important in understanding the extent of the owner’s use and enjoyment of the property.

Understand the Title Documents

Title documents prove the ownership of control and possession of a person over specific property or parcel of land.

Aside from establishing ownership, however, title documents also disclose liens, defects, deed restrictions, and exceptions to title that affect the property. Reading and understanding these documents will give you an insight into the limitations and exceptions that apply to your ownership of property.

Consult with a real property or eminent domain attorney

Anytime you encounter issues concerning your property rights, whether it’s a defect in title or a potential taking due to an act of eminent domain, seek the professional advice of a real estate or eminent domain attorney before taking any further steps.

Regardless of the type of property you own or property-related issues you’re faced with, these professionals can help shed light on the situation and steer you towards a more favorable outcome.

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Home Problems Easily Hidden to Look For as a Buyer

Looking at older homes to buy? There could be plenty of issues with the home that the seller tries to hide and while legal action can be taken after the fact, it’s inconvenient and can be expensive. A few examples of what you should look for that are easily concealed are:

Pests: Look for any signs of carpenter ants, rodents, termites, roaches, or other pests that can end up causing thousands of dollars worth of damage. They often leave signs like small holes in the drywall, dry mud tubes along the foundation, small piles of shredded paper, sagging floors, peeling paint, or even floorboards that sound hollow. Look for droppings, odd smells, pest control products, and holes. Damaged plants outside can also signify pest breeding.

Mold and Mildew: One of the easiest to hide with bleach spray or paint and one of the biggest warning signs of dampness issues. In many states, it is a requirement for sellers to disclose any known defects of the home to the buyers in paperwork. Including the history of mold and whether or not it has been professionally handled. Another good reason to have an experienced Realtor as he/she will be able to guide you around your state’s requirements as well as the ability to recognize potential mold/mildew problems. Your Realtor should also know to ask the seller the right questions whether or not disclosure is required.

Aluminum Wiring: Many sellers are not even aware of what electrical hardware is installed in their homes. Common in homes built between 1965 and 1973, aluminum wiring is more likely to cause a fire than copper wiring. If the seller doesn’t know, it won’t be listed on the disclosures. This is when a home inspection is most important. But, if you are not even at the home inspection point, you can safely look at the electrical panel and see the cables that run into the attic and basement have an AL, ALUM, or ALUMINUM on the cable jacket.

Leaks: Sellers can temporarily plug the leak to show the home. When you are looking at the home, be on the lookout for significant cracks in the foundation, moldy odors, or any water damage on the ceilings, walls, or windows that may have fresh paint hiding the flaw. Lift rugs and move potted plants to see if they are covering water issues. Can you spot new tiling randomly placed in the bathroom and kitchen? Open the windows and the doors and see if there is any separation or soft spots that may indicate window leaks. A small separation could lead to humidity in your house, which may lead to mold. 

Foundation Problems: While walking through the home try to notice any window or door frame gaps or cracks in the wall that might be from a faulty or unstable foundation. Sellers will try to hide the cracks or separation with more caulking and paint. Look to see if the paint is a bit uneven around windows and doors. Foundation issues can cause doors and cabinets to not shut properly and can cause beams to stress and break – don’t be afraid to open and close cabinets.

The Bottom Line: Even though you may have found these and other problems but still want the home, a good Realtor will help you negotiate the price and/or have the sellers pay for the repairs. Of course, before you buy, it’s always in your best interest to have a home inspector check it out. You can let them know of any concerns that you have about the house, but an experienced inspector knows what to look for.

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A $5 Million Home for Zero Money Down?

At the start of 2020, the Bluewater Navy Bill, which was signed on June 25, 2019, by President Trump, became law, bringing some significant changes to the VA Home Loan program. The most significant change was the removal of loan limits, which in 2019 had previously been at $484,350.

This removal of loan limits freed up qualified lenders to start loaning out a lot more than what was previously possible. As a result, VA lenders set their loan limits, with lenders like VA Home Loan Centers setting their loan limit at $5 million. This no loan limit rule, combined with the fact that VA home loans do not require a down payment, makes it possible to take out a $5 million home loan for zero down.

Regardless of loan limit, lenders are still required to make sure that the applicant can afford to make their monthly payments on time.

The 28/36 rule means that an individual’s mortgage should not exceed 28% of their gross monthly income, and their debt-to-income ratio should not exceed 36% of the total revenue. Therefore, when purchasing a home, an individual should ensure that their monthly household expenses do not exceed 28% of their monthly income. While at the same time, their household debt should not exceed 36% of their monthly income.

This rule is not absolute, however. Some borrowers may exceed a 50% debt to income ratio with underwriter approval and what is known as compensating factors. A compensating factor can be certain liquid assets, significant employment stability, and related indicators of financial stability.

VA Home Loans Information
Created in 1944 by an Act of Congress, VA Home Loans has since helped more than 22 million veterans achieve the dream of homeownership. Today, VA loans remain one of the most significant benefits of being a member of the military.

VA loans offer several incentives like zero down payments, low monthly costs, low-interest rates, no mortgage insurance premiums, and no prepayment penalties. In addition to this, the loan also offers 15 to 30-year fixed mortgages.


VA Eligibility Requirements
When it comes to eligibility, VA loans are exclusive to Veterans, Active-Duty Service Members, and the surviving spouses of veterans who passed away due to their service. In addition to being a military member, there are also several military services, income, and credit requirements.

Military service requirements to be eligible for the VA home loan vary depending on what kind of service the applicant participated in while in the military. Active-duty applicants must have served for at least 90 consecutive days while in wartime and 181 during peacetime. Reservists and members of the National Guard must have served for at least six years.

The applicant must have a stable income to qualify for a VA home loan. Qualifying incomes include social security, VA disability, and full-time jobs. Moreover, many more revenues must have existed for at least two years, like part-time Jobs, self-employment income, 1099 income, and seasonal income.

However, some incomes do not qualify for the VA loan. These include Worker’s Compensation unless it can continue for three years, the GI Bill, and cash payments.

When it comes to credit requirements, VA currently does not have specific needs, and most VA lenders have a minimum credit score requirement ranging from 580 to 640.

Conclusion
It is possible to get a VA home loan of $5 million; however, lenders must ensure borrowers can afford their monthly payments. Still, VA loans offer some great deals for those who are lucky enough to qualify for them.

Phil Georgiades is the CLS for VA Home Loan Centers, a government-sponsored lender specializing in VA loans. He has over 22 years of real estate experience. We would be happy to help you learn more about our programs or apply for a VA loan if you click here.

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The Good and The Bad of Buying a New Construction Home

Nothing beats the feeling of being the first person to live in a newly-built home. Everything is shiny and untouched. There are three ways to buy a spanking new home: already built on spec, semi-custom home built as part of a development where you will be able to choose from a set palette of finishes and upgrades, or a purely custom home designed and built to your specifications from start to finish. The process of buying a new construction home is a lengthy one. Here are some samples of what you should know; the pros and the cons.

Some Good News (Pros)

Personalize & Customize: For some, this is the most exciting part of new construction. You have the opportunity to choose what you want that reflects your tastes, preferences, and personality by choosing the finishes you want. This is an opportunity that doesn’t come with buying an existing home.

Energy Efficient: With modern construction and the integration of advanced technologies comes the added benefit of energy efficiency. New construction homes are built with the latest advances in construction materials and building practices, which can give new homeowners the benefit of reduced monthly utility bills

Pick Your Lot: The lot you choose for your home can impact your quality of life and the future resale value of your home. Consider the view, the location on the street, what direction the home faces at sunset & sunrise, and would future home buyers find the positioning of the home as convenient?

New Home Warranty Protection: Buying a new construction home means that everything in it often comes with a warranty. You can confidently know the builder will cover the cost of any issues during the warranty period, such as a leaky roof or broken water heater. Unlike when buying an existing home where you may not know about hidden defects or problems until after you’ve purchased the home – and you’re left with the bill.

Designed for Your Lifestyle: With several options to choose from, a new construction home lets you design a space that fits your style. The choice is yours. Pick ceramic tile, granite countertops, finished wooden cabinets, or palatable neutral wall color, your home will be finished in a way that’s tailored to your preferences.

Some Bad News (Cons)

Price: On average, it costs about 20% more to build your own home than to buy an existing one. Often, buyers walk through the builder’s model homes and want their new home to be just like that one. In reality, the model home will be much more expensive than the traditional properties in the community. It’s best to use a Realtor to help through the process.

Landscaping: When developers create new neighborhoods, they tend to tear down all of the vegetation in the area. It’s the most costly way for them to break ground and get started. Landscaping is just one part of the process of planning a custom home but is often an afterthought. The landscaping you want for your home may have an impact on the structural design of your home and where it will be situated on the property. Most new construction homes will give you a little bit of landscaping in the front to start off with but they won’t do anything in the backyard. This means that you’ll probably have to fence the backyard if that’s what you need, start from the ground up with growing trees (that take years to grow) and plants, and you may even need to lay turf or seed the lawn.

Homeowner Association Fees: Most new subdivisions and developments will have some sort of homeowner association dues that cover management and any common area maintenance. That being said, many of these new subdivisions will also have community amenities such as clubhouses, swimming pools, or playgrounds.HOA dues can range anywhere from less than $100 a year to several hundreds of dollars per month.

Commute: New construction typically happens further out from the cities. A new home usually means a longer commute to work. It also means you might have to wait for shopping, schools, libraries, firehouses and other key pieces of infrastructure to be built. Those things usually come after there are enough homes and people to support them

Noise: Unless the home that you decide to buy is the last one to be built in the neighborhood, you can count on the daily noise of the rest of the homes being built around you. This could be several months or even years depending on how long it takes to build up the community

The Bottom Line: Building a new home requires a buyer to be very involved.  A custom build gives you full control, but also means managing a lot of details and making hundreds of little decisions. No matter where you decide to build a new home there will be pros and cons to new construction that must be weighed properly before making a final decision.

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Title Insurance for your Home

When you are out looking for your new home, it’s not on the top of your mind: title insurance. But, it should be. It’s one of the most important parts of the home buying process. Something that can protect owners of real property events and matters that can be brought up from the past. Imagine spending your nest egg on a down payment, closing costs, and a few years of mortgage payments. Suddenly, an heir to a former owner is suing to obtain the home, arguing that it never should have been sold to you in the first place. There is no reason to worry if you have title insurance, yet many homeowners decline it. Once they know how it is created to protect them from unknown claims against their property that can pop up years down the road they are less inclined to resist.

Title insurance is much more than a lender requirement. It’s knowing that what you are buying is free of any third party claims to ownership or use of any part of it. It assures the homeowner that they are clear of anything that would affect the ability to sell or borrow against their new property.  After thousands of real estate closings here at Title First, we can give you a rundown of the most common issues we can save you from:

Mistakes on titles, especially lately, that are transferred through a sale of foreclosure without certain rulings met, thus making the transfer of the title invalid.

Mistakes within all the paperwork brought to a closing. Somewhere along the line, there may be a forged signature or recorded documents that have been signed by people without legal authority.

Mistakes made during the probate process for the previous owner that overlooked someone else’s rightful claim (undisclosed heirs) to the property of someone else’s interest in the property. Misinterpretation of wills and deeds.

Mistakes made in the description of the property.

Mistakes were made where claims, tax information, or easements had not been recorded properly in the public record.

Mistakes missed of liens on the property or judgments against the previous owner.

Mistakes in unpaid taxes or mortgages and unpaid debts.

Investors need to be alert when protecting their investments. Title insurance assures the homeowner that the title to the property purchased is free of any defects and is “clear to close”. It is a guarantee that all matters of record that could harm the title of the new property have been disclosed and resolved. Title insurance protects the homeowner against any potential claims should an undisclosed event threaten the ownership of the property. Give us a call today at Title First Agency: 1-866-320-8400

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Rising Energy Prices and Tips to Keep Your Bills Down

With prices surging worldwide for heating oil, natural gas, and other fuels, the U.S. government said Wednesday it expects households to see their heating bills jump as much as 54% compared to last winter.

Whether you heat your home with a furnace, boiler, or central heating, there are ways to save money on your monthly bill. Begin now to winterize your home as the cooler temperatures are ushered in. It’s always a good idea to have your furnace inspected as well as stock up on filters. A dirty filter makes your furnace/heat pump work harder which leads to higher heating bills. Change the filters about once a month.

There are simple things that add up that will help reduce your monthly bills.  A few inexpensive ideas:

Turn your thermostat down. According to the Department of Energy, you can save as much as 10 percent a year on heating and cooling by simply turning your thermostat back 7-10 degrees Fahrenheit for eight hours a day.  Those eight hours can be while you are away at work. They also suggest having your thermostat set to 68 degrees when you are at home and dropping that even lower when you’re sleeping.

Run your ceiling fans in reverse. Hot air rises, so run your ceiling fan at a slow speed in reverse (counter clockwise) to push the warm air back down to floor level. Most ceiling fans have switches that allow you to change the direction of the motor rotation. 

Take advantage of the sunny days. Open your curtains and blinds on the south facing windows through the day,and feel how that sun heats up your home! Make sure you close them again once the sun sets to keep that heat inside. 30% of heating loss in a home happens through the windows, so the thicker the curtains and the shades – the better!

Seal up leaks. Check out your walls, windows, ceilings, doors, light fixtures, outlets and switches for any escaping air. Look for things like hole and gaps. Adding simple weather stripping around your windows and doors is the easiest and cheapest way to help keep the warm air in your home. Ducts tend to get small leaks over time which allow the heated air to escape. An easy and inexpensive fix to these leaks is using metallic tape found at any home improvement store. When you are not using your chimney, make sure the flue is shut to prevent warm air from escaping.

The Bottom Line: Bundle up! It could be an expensive winter ahead when it comes to heating your home. Check with your electric company to see if they have “even billing” where you spread your winter payments out over the whole year, paying the same amount each month. For now, the first step is to find the problems around your home and identify where you could be more energy efficient.

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