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How to Stay Proactive on Title Issues Part One

“We cannot close today as there two liens on record.” Unfortunately, this nightmare occurs more than most realtors and title agents care to admit. There are numerous (public) filings that can stop or even kill your real estate closing, yet most can be managed prior to reaching closing – ensuring your transaction is completed without undo-stress or complication.

If you want to avoid extending or even cancel your purchase or sale of a property due to title issues, you will need to arm yourself with the right information. Knowing what questions to ask and then gathering answers to those questions can make all the difference. To help you with this task, we created a helpful checklist to stay proactive on title concerns.

Schwartz Realty’s Proactive Title Checklist

  1. Does the seller have legal right to sell the property?
  2. Is the property’s title clean of defects?
  3. Have your completed your own title search at the County Recorder and/or Clerk’s Office?
  4. Do you need title insurance?

Does the Seller have Legal Right to sell the Property?

Starting with Question No. 1 from the SR Proactive Title Checklist, save yourself considerable time and limit wasted effort by simply confirming whether the seller has the legal right to sell you his or her property. If the seller does not have proper title, you must locate the individual, entity, or trustee that does. If this is not an option or proves to be more difficult than desired, it might be time for you to move on to another property.

Is the property’s title clean of defects?

After confirming that your seller has the legal right to sell, next you need to confirm whether the property has any recorded title defects. What are defects? There are countless examples, however there are three common types of defects that surface either at or before closing: (i) liens, (ii) bankruptcy, and (iii) divorce.

1. Liens

If you find that there is lien on the property, such as a mechanic’s lien(s) for unpaid work on the home, your transaction and transfer of property will not close until it (they) are satisfied. An example of a mechanic’s lien is when a contractor files a lien against the property in connection with an improvement to that property –generally filed prior to work commencing – which is placed on title to ensure payment is received for the services performed by that contractor.

In some cases the work is completed and payment is received by the contractor, however this contractor fails to take action to remove the lien(s), which may be a simple error. With such occurrences, you must contact that contractor and request that the lien be removed. Unfortunately this is easier said than done as this contractor may not be based in your area or may no longer be in business; possibly resulting in months of unnecessary effort to track down a professional responsible for the lien(s) in question at the 11th hour – further demonstrating the importance of discovering defects early.

2. Bankruptcy

Do you know if there is a bankruptcy issue? A common bankruptcy related title issue occurs when a single individual purchases a home, then shortly thereafter gets married to someone else that files or is currently in bankruptcy at the time of the transaction. Although the seller‘s finances do not directly affect your own, the sale of the property could require bankruptcy approval if the seller is still in bankruptcy at the time of the closing.

In this example, your transaction could be subject to your ability to successfully submit a request to the bankruptcy court, and request approval of the sale (which generally requires an attorney). If you or your title company are aware whether the these impediments to closing are resolved, you could avoid additional fees and costs relating to advisement on navigating bankruptcy court statutes.

3. Divorce

Divorce can cause several complications with respect to transfers of property. In some cases, the forgetful actions of a spouse for outstanding child support or a settlement agreement coming out of a divorce could remain on title well after that financial obligation was satisfied. To remedy this type of defect you must confirm, in writing, via a release of lien/judgment, detailing that the debt was satisfied. Failure to get this issue resolved could prevent you from closing.

Another possibility arising with property and divorce is when a property is inherited by a family member. Often times, inheritances come with liens from one of the original owners (or former spouses), one that the seller of the property had no prior knowledge of prior to selling the home. Sadly, this unintentional lapse of information can result in the heir’s inability to possess legal right to sell their property – returning us to Question No.1 of the SR Proactive Title Checklist.

Completing your own title search

Generally, all reputable title companies will complete a very thorough title search once you enter into a contract to buy or sell a home and open escrow with that company, however, it never hurts to initiate your own search. In some cases, an additional search yields information that is either missed or even overlooked in an initial report.

Each state has its own processes to search and view public records, however, generally speaking you can access these records at your County Recorder or Clerk’s Office. Additionally, thanks to the ever-increasing reach of the internet, you may also have the option in some states to search records online. Check with your agent and/or title company to confirm the appropriate office to contact.

Do You Need Title Insurance?

Insurance is something you don’t want to pay for until you need it. In the first 3 questions of the SR Proactive Title Checklist, we focused on pre-closing items that could prevent a successful transfer of property. Equally important is what may arise post-closing. Spending time and effort ensuring you can close is important, but ignoring the possibility of a defect (lien)that arises after closing, and prevents you from occupying and/or later selling the property is not a desirable result.

Consulting with your agent and title company on your options, regarding potential benefits and costs for title insurance is another great example of protecting your investment via information. Even if you elect to decline this coverage option, exploring this offer could help you save you additional fees and costs as well as headache down the road.

Recapping – proactive consideration of potential title issues that might prevent you from successfully navigating your closing is a must. Moreover, knowing what questions to ask and the subsequent actions to take to be sure you receive clean title is equally paramount. Selecting an agent and broker who can assistance you in evaluating such aspects of your transaction is necessary for anyone who desires a clean transfer of ownership of a property from seller to buyer.

Our professionals can share details with you about potential pitfalls associated with your transaction as well as standard practices to avoid them – ensuring you properly navigate your transaction. At Schwartz Realty, we strive in helping you understand the best course of action and guide you through the process with ease. Let the some of the top realtors and agents in Las Vegas help you make the right decisions. For more information or to set up a consultation, give us a call today at (702) 485-1400.

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Full Service Real Estate – What Are You Getting?

Trulia, Zillow, and Google search…MLS Listings?

Do you know what to do with all the real estate information available to you online? Have you used Trulia, Zillow, or and felt overwhelmed? In years past, agents and/or brokers traditionally serviced sellers throughout their real estate transaction, from listing the home for sale to closing the transaction. The services offered typically included a consultation, marketing of their home via the Multiple Listing Service, various analog platforms (e.g. yard signs, flyers and post cards) and culminating in negotiations between agents to finalize a purchase and sale agreement.

Brokerages and their agents are now responding to the Digital Real Estate Landscape – Trulia, Zillow, – by offering a la carte option(s), allowing sellers to hand pick the real estate services they want. While there are always sellers looking for assistance from day one to close, many savvy homeowners who experienced lack-luster services during a previous real estate transaction welcome self-directed options. Sellers’ choices have also led to providing a method for capping professional commissions at closing, subsequently forcing agents to validate their commissions.

Is Your Agent/Broker Worth a Commission?

The old question many sellers asked – Why is there a 6% commission. More and more agents are hearing – Why is the commission not 2% or less?

Despite the recent transition to more digitally based services, seasoned industry professionals are still focusing on quality of service – the industry basics of property transactions. So the question remains, what does “Full Service” include? Nevertheless, before you can answer this concern, you must first ask yourself what is required to successfully complete your real estate transaction. If you are still in the planning stages, begin with asking yourself the following:

  1. Do I have the time and knowledge to market my own property listing?
  2. Do I feel comfortable in negotiating the terms of my transaction with real estate professionals working for the other side?
  3. Do I understand the current market trends and timing components of my potential sell?
  4. Would hiring a professional provide additional benefits that I am willing to pay for?

At Schwartz Realty, we can help you understand the best course of action and guide you through the process with ease. Start by scheduling a free consultation so you can explore not only the 4 key questions listed above, but also address others that you have not yet thought of. Let the some of the top realtors and agents in Las Vegas help you make the right decisions. For more information or to set up a consultation, give us a call today at (702) 485-1400.

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Millennials, Student Loans and Homeownership

The term Millennial applies to young adults born between the years 1982 – 2004. Recent trends show that a majority of Millennials have not shown much interest in investing and buying a home of their own and would rather rent.

Annual homeownership rates across all generations declined after hitting their peak 10 years ago. One of the contributing factors to that was the housing market collapse, which lead to the recession. But a recent study of millennials found that they just don’t want to buy a house. The surveyed millennials were not asked for reasons why, but there are some good guesses. Young adults are getting a later start on marriage – per the census bureau. The median age of a first marriage for men is 29 and 27 for women.

Millennials still facing significant debt

Another reason why is the mounting student loan debt that millennials are still facing. Another survey was done with student loan borrowers and a majority said that student loan debt hindered them from buying a home. A high percentage of millennials in the same survey said that their student loan debt even prevented them from moving out of a family member’s house.

There are ways, however, for millennials that are interested in purchasing a home to do so. One main reason that prevented younger people from purchasing a home was the fact they could not afford a down payment. The answer to this would be to apply for an FHA loan, which requires for only 3% down of the purchase price. Paying 3% on a first home is not an insurmountable amount of money. For younger borrowers who have minimal credit history, banks are now considering someone’s mobile phone and cable payment history. Having a car loan and credit card can also help boost your credit score.

Millennials vs. Gen Xers

A 20 year history still shows that millennials are at or near the same rate of homeownership as the Gen Xers. The biggest thing for millennials is to not overextend themselves and live within their means. Looking at the numbers, it seems like they are.

As Schwartz Realty, we pride ourselves in helping first time homebuyers make smart decisions. Please call us at (702) 485-1400 for a free consultation with the top Las Vegas realtors and agents and discover what kind of home makes the most sense for you and your needs.

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Homeowners Enjoying Profits from Sales

Profit margins from 2007 are returning to Las Vegas homeowners who sell their properties. Between 2007 and 2013, however, Las Vegas homeowners primarily sold their homes at a loss. Now, homeowners in Las Vegas are seeing more than 22 percent profit margins over their initial purchase price on home sales, according to RealtyTrac. Put another way, Nevada home buyers are making money, and lots of it.

Las Vegas homeowners seeing green

The increases in profit margins might not match the once booming market upswings realized all around the country 10-15 years ago, prices appear stable. Specifically, the Greater Las Vegas Association of Realtors recently noted the median home sales price locally is unchanged at $220,000 since June 2015, which hints at a stabilization of home prices in the Las Vegas market.

Further guiding this welcomed profit uptick and stabilization is the comparison of Las Vegas’ profit margin percentage to the national average, which is a less than stellar 17 percent. Upon reflection, Las Vegas’ almost 6 percentage point lead on the average national home sale profit stands as a solid indicator that local real estate market trends are moving in a positive direction.

In other key hot-beds of home sales, such as Phoenix, Miami, and Riverside, California, homeowners see profit percentages closer to 30%. Taking into account the higher median home prices in these hot-bed markets, Las Vegas seems to again offer homeowners and potential investors alike strong returns on investment. Although the hand-over-fist profit margins seen in years past are not back, homeowners and potential investors are now seeing cause to step back into the market.

As this market trend develops, Schwartz Realty will continue to share the latest insights such sales trends that can potentially provide new revenue opportunities for both homeowners and potential investors. To stay informed, enjoy commentary from the top realtors and agents in Las Vegas  and please check out our blogs each week.

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Can the FHFA Mortgage Reduction Program Help You? – PART ONE

For homeowners who may be struggling to pay their mortgage, a rescue could be just around the corner. The Federal Housing Finance Agency (FHFA) decided to re-crunch the numbers and revisit reducing the principle of particular mortgages – specifically those backed by Fannie Mae and Freddie Mac. With this new program, the FHFA attempts to foster sustained income from distressed homeowners and forego foreclosure proceedings on the negative equity stricken mortgage(s). Put another way, FHFA is considering giving underwater borrowers a new deal on their loans, including reducing the amount of your mortgage.

Although not a real revolutionary idea, the FHFA’s willingness to challenge current policy maker’s views – that principle reductions do not follow best business practices and could lead to setting unwarranted precedents for future distressed real estate markets – could nevertheless deliver a win-win for lenders balance sheets and the negative equity concerns. In other words, the Federal Government finally believes reducing principal and getting underwater borrowers back on the path to paying for their homes is in everyone’s best interests.

With over 4 million homeowners still currently struggling with negative equity in the United States, homeowners who have loans backed by Fannie Mae and/or Freddie Mac might have the opportunity to reduce their mortgage loan balances and reduce their payments. With this new option, you could begin restructuring monthly expenses without filing for bankruptcy, while also avoiding further damage to your credit score.

Details for the program are still being released as it is not final, however, as the requirements and restrictions are released to markets and homeowners – loans that were excluded from the current administration’s Home Affordable Modification Program will now have the potential of (similar) principle reductions. What does mean for you? It’s time for you to take charge of your finances once again and begin exploring how this new program applies to you.

At Schwartz Realty, we can help you understand the best course of action and guide you through the process with ease. Let the some of the top realtors and agents in Las Vegas help you make the right decisions. For more information or to set up a consultation, give us a call today at (702) 485-1400.