Tag: title

The purchase of a home is most likely one of the most expensive and important purchases a person will make. The buyer and the mortgage lender must be certain that the home is indeed completely the buyer’s and that no other person or government entity has any right, lien, or claim to the property at all whatsoever. Like most types of insurance, having title insurance is better to have and not use than needing it and not having it available.

Title Insurance companies are in business to make sure the rights and interests of the property are clear, that the transfer of title takes place efficiently and correctly, and that the interests of a homebuyer are protected to the maximum degree.

Hidden issues can pop up after the closing of a home. Having title insurance will protect the buyer from some pretty sticky situations. Some of these unforeseeable title claims can be:

• Forgery | False Documents – for example, the seller misrepresents the identity of the person selling the property.
• Fraud | deception to achieve unfair gain -for example, someone steals identity and either sells the house without the owner’s knowledge or consent or takes out a second mortgage on the property and walks away with the money.
• Clerical error | inconsistent paperwork and historical records – for example, an unforeseeable discrepancy in the property or fence line confuses ownership rights.

Title insurance is a safeguard against loss arising from hazards and defects already existing in the title. While claims on title insurance are rare compared to other types of insurance, they still happen and can be complicated legal issues to fix.

• Outstanding mortgages and judgments, or liens against the property because the seller didn’t pay required taxes.
• Pending legal action against the property that could affect your ownership.
• An unknown heir of a previous owner is claiming ownership of the property.

After the title company conducts an exhaustive search relevant to the property with assurance that no one else has an interest in it, a policy will be issued. Because of this examination of all the records, any problems with the title will be cleared up before the purchase of the home. Once the title policy is issued, if a problem arises leading to a file against the property, the title company pays the legal fee that would be incurred in the defense of the owner’s rights as well as any loss arising from a valid claim. This protects the owner and any heirs as long as it is their property.

The Bottom Line: The title company hired will conduct a meticulous title search, however, the possibility of something being overlooked cannot be eliminated. That’s why it’s crucial to have title insurance. The policy will protect against any unforeseen issues that may arise with the property’s title. Without title insurance, an owner could end up dealing with expensive legal costs and other charges. An investment like a home should be safeguarded and a title policy should be in place before the day of closing.

So you have decided to have your dream home custom-built on a plot of land that you love. What could be better than watching it all happen from the ground up just the way you want it? While you might be better off doing this, it’s not as easy as it seems. There are a lot of details that need to be worked out and you will need to be prepared.

The first thing you should do is hire the most experienced realtor with new home construction knowledge, who will best represent you and your interests during your home search and the home-building process. A realtor that regularly deals with builders, but isn’t affiliated with a builder. Do this before even visiting a builder’s home construction site. Many model homes are represented by a real estate agent who has a relationship with the builder, and many builders won’t allow you to hire your agent once you already visited their sales office without representation. Seeking the help of a knowledgeable professional who regularly deals with builders and knows the local community will save you time and money. Besides, it will cost you nothing as a buyer to be represented by an agent since it is typically the seller who pays for the commission. Many builders are also happy to work with agents.

Do your research on the builders. Search for online reviews, testimonials, and any news and updates you can find. Then check for the validity and trends in those reviews, since many builders will surely have a history of both happy and unhappy clients. If possible, also talk to local homeowners or current residents. Connect with them in online groups or communities through social media to better educate yourself before making a decision. Also, research the location and the community where the new construction is being built and you can learn about your potential neighbors as well. Ask your realtor if they’ve worked with the builder before and gain insights about their reputation.

It’s normal to be fascinated by that picture-perfect model home, but don’t let it blind you. Model homes are, of course, decorated to look desirable and striking. They have been furnished and staged so that rooms will appear bigger. Model homes were often constructed using a mix of standard materials and fixtures and include many upgrades that don’t necessarily represent what you can get, so it’s crucial to note what exactly you will be getting. Enlist the help of your agent to get a list of the standard features and common upgrades, together with their associated costs.

Most builders are reluctant to lower their prices because it may set a precedent for future buyers in the development who may expect similar discounts. The best way to negotiate with a builder is through upgrades. Consider asking for the builder to negotiate “on the back end,” such as paying for closing costs and performing upgrades at no additional charge. This is the less obvious way for builders to sweeten the deal while still maintaining the value of their neighborhood. With the help of your agent, research the builder’s negotiating style so that you can plan for an effective way to make a creative offer.

Consider other sources where you can find a lender who will offer you the best deal. Don’t automatically use the builder’s lender without shopping around for better options. Builders often have their preferred lender so that they can be fully informed of your progress as a borrower. However, they may not work with your best interests in mind. Your agent can also help you by referring to a trusted list of private lenders.

For some instances where the builder’s preferred lender is the only option, find out if there are incentives, special offers, or competitive rates available to you if you agree to use the builder’s lender. In some situations, it can be a cost-efficient option since they are often willing to offer competitive rates and terms, especially if the builder owns the lending company.

Get an inspection! New homes can have problems or defects since construction workers can make mistakes as well. There may be problems with the HVAC or plumbing installation that only a licensed home inspector can detect. Getting an independent inspection is always a good idea since any problems can be identified before a builder’s warranty expires. It will also help you learn more about the home. A home inspection will guarantee that everything is safe and up to code.

Even if you are working with a respectable builder, make sure that everything you have negotiated and agreed upon will be included in writing. They may honor your requests, but verbal conversations are not binding so they may forget about the promises they made to you. Make sure that everything important will be put in binding documents that must be signed by all parties. It’s especially crucial if you are buying a home that is not yet complete. Your experienced real estate agent can help you ensure everything is in writing and that all documents are properly signed.

Lastly: ask about warranties. Find out what is and isn’t covered and for how long, since not all warranties are created equal. Most builders use third-party warranties that cover materials and workmanship. Builders often use construction materials from different manufacturers or suppliers, like for windows or tiles, so those products may have separate warranties. There’s a great chance the builder might refer all issues to the manufacturers instead of handling the issues directly. Get the builder to specify each product’s warranty information so you can prepare your offer documents to address any concerns before closing. Warranties will also help you understand the process you need to follow once something needs to be fixed.

Pricing your home too high can be damaging. Overpriced homes sit on the market, day after day and month after month while the price gets lowered. The listing becomes stagnant, and buyers assume there is something very wrong with the house thus avoiding it. Eventually, there will be a buyer out there who knows they can get a deal on the house and make a lowball offer.

The first 30 days on the market are the most important. This is when the most showings will occur. Having a home that is priced too high, will push buyers away and they will choose to ignore it or bookmark it to check on the status of the price later. The longer the home sits unsold, though, the more negatively it is viewed. Buyers believe it is overpriced or there is something wrong with it. Waiting too long to drop the price will mean most likely losing the people who have bookmarked the home as they have probably already moved on and bought something else.

Additionally, if the home is on the market too long, potential buyers will think they are in a better negotiating position and end up tossing out a real lowball offer. Even when the negotiating begins, it will be less than the original asking price. To attract the most potential buyers possible, the home must be priced correctly from the onset of its going on the market.

If by chance a seller is lucky enough to get an offer on their overpriced home, there is still a hurdle to get over. The home may indeed be in a desirable neighborhood and have all the bells and whistles, but for the buyers to get a mortgage, they need to have the home appraised. The dollar amount the bank will lend the buyer is based on the appraised value of the house rather than the agreed-upon purchase price between the buyer and seller. The appraiser will use the prices of recently sold nearby comparables to help determine the value of your house.

If the home does not appraise at the price the buyer offered, the seller will either need to reduce the price to meet the appraisal value or the buyer will need to come up with additional funds to make up the difference. Not many buyers are jumping to ante up more money on even their dream home if the appraised value is not matching. Sadly the home will end up back on the market with additional expenses and adding to the days on the market.

Another issue is that any good realtor who is showing homes to buyers is obligated to do what is best for their clients and showing a well-known overpriced home is something they will steer clear of. Properties shown to buyers will meet the current fair market value. They will wait until the price is eventually reduced. If then, the lowered, overpriced home is shown, the buyers will look for all the things that are wrong with it – because they know there has to be if it’s on the market for a long time. The real problem all along was always the price.

Picking the right realtor is the key to a successful sale of a home. Interview several agents before choosing one and have them write out how much they think they can sell the home for. If one gives a significantly higher number than the others, be wary. It’s unfortunate but some realtors will throw a high number into the ring just to get hired. The realtors should come armed with the comps (competitive market analysis) and be able to back the number they came up with.

Some sellers mistakenly believe that Zillow’s pricing estimates, called Zestimates, and other online valuation tools can be used as a good barometer for estimating the price of their home. Beware of these tools and websites as they will never replace a good real estate agent who knows the local market and their estimates are usually far off the the actual selling price of a home.

The Bottom Line: When a house starts overpriced, it almost always ends up selling for less than market value. By pricing it high to drop the price later, you are completely bypassing the best candidates for buyers. They will look for homes for sale that are more accurately priced. Experienced real estate agents know that pricing a home appropriately from the start is critical to getting it sold quickly and at the best price.

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 if 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 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 on 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.