What Does a Title Search and Title Insurance Actually Entail?
A title search is utilized to determine if the current owner of the property being sold actually has the right to sell the property. Also, the title search reveals if there are any state restrictions on the property, if there are any liens or judgements on the property, and what the possible cost might be on the judgement/liens. Under the umbrella of a lien, it can incorporate state and federal back taxes, mortgage payments, and court judgements.
With a title search, all of the aforementioned is out in the surface for your viewing pleasure. Nothing will come as a surprise in the later stages of the closing. All of these liens don't actually disappear if they are valid. This is where title insurance comes in handy. With title insurance, you guard yourself from scenarios in which tax auditors/collectors, and distant relatives crawl out of the woodwork to make claims on the property. We have seen instances where the buyer will pay off all of these unpaid debts, and the seller would lower the price of the property as a form of quid pro quo. Also, there are instances where the right of ownership or the seller's right to actually sell the property is simply not allowed under various legal clauses. How do you protect yourself? Title insurance. This is one of the most important tools you have throughout this entire process. Title search and title insurance for the sale of the property is equivalent to food and water for a human to survive
Richard F. Rozhik, Esq., knows exactly what to identify during the title search process and has the right contacts within the real estate community to ensure you are paying less out of pocket during this phase of the real estate closing.
What is a “lender’s policy” and is title insurance expensive?
The “Lender’s Policy” is insurance that covers the lender/seller of the property. This insurance typically makes sure that the financial institution has a valid lien on the property. This really does not protect you, the buyer of the property. Your aim should be to acquire the owner’s policy. This protects you from any issues with the title that existed prior to the closing of the property. In the event you suffer a loss due to a faulty title, the owner’s policy of the title insurance is what will hedge you from any financial strain.
Speaking of title insurance, it must be very expensive, right? Not necessarily. It is simply a one-time payment. On average, it can be anywhere between $3,000-$5,000. As big as that number sounds, that one time payment protects your investment of hundreds of thousands to even millions of dollars. The Rozhik Law Firm is here to help you find the best deal on the right title insurance. Our contacts in the industry can provide you with the best price on this crucial insurance.
What should I expect during the home inspection?
To start, what is the home inspection? You are entering into the biggest transaction of your life. Once all of the documentation is signed, you will be unable to back out of this transaction. With that said, you want to ensure the property you are investing into has been properly examined to address any repairs and other physical issues. Why? So you can either negotiate with the seller on adjusting the price, or becoming comfortable with the new cost of additional repairs plus the dollar value along with the principal amount of the home.
You can certainly perform the home inspection yourself but we do not recommend that. Typically, you can spend anywhere between $225 - $475 for the entire inspection. The Rozhik Law Firm knows the right home inspectors to check for asbestos and other hazardous materials, faulty electrical structuring within the electrical panel of the home, if the roofing and plumbing follow the proper building code requirements, as well as several other key items that may pose to be dangerous and problematic that is only revealed during a detailed home inspection. Whether you are purchasing a newly built property or a home that is decades old, this step is crucial in ensuring you and your family are living in a safe environment.
What are the common problems of buying a property with tenants?
Under state and federal laws, tenants of a home are protected. There are two scenarios that have tenants living in a newly purchased home. The first is when there was a lease in place prior to the sale of the home. A lease is a legal and binding contract which allows the current tenants to live within your new home. The second scenario is when tenants live within a home without a lease. In this scenario, there is a process that needs to take place in order to evict them.
The common problem with the two above scenarios is fairly straight forward which is that you may not even want to have tenants living in your new home. The ordeal of trying to evict them can be long and strenuous and even expensive. Another problem you may face is the rent that the tenant is paying simply isn’t worth the space they are occupying and you are actually losing money by having them reside in your home. Also, in case you forgot what it is like renting, remember that security deposit you had to provide when you found your first rental apartment? Well, these tenants probably have a security deposit as well. You might be stuck with that bill also if they decide not to renew their lease once it expires.
Our advice is this; if you are in the market for a home, try finding a home without any tenants living in it. If however you found a home and a lease is in place with someone occupying space, have The Rozhik Law Firm examine the lease agreement that is in place in order to value and assess what the tenants will actually cost you in the long run. At times, it can be profitable, but allow us to be the judge of that.
What are the issues of buying a property in the name of a trust?
When purchasing property in a trust, you are holding the property for your own benefit as well as the benefit of your named successor and beneficiaries. Some remarkable benefits of a trust is the privacy aspect as well as the legal protection that you retain. The name on the title of the property is the trustee. Trustees are a third party that manage the property. What this means is your name will be seen absolutely nowhere. Another benefit is the ability to avoid judgement and liens against any beneficiaries who are associated with the trust. The beneficiaries may be affected, but not the trust.
And now the bads news: Trusts are taxed fairly high. Usually, the average tax rate is 40%. Sometimes it is better to just buy the property as an individual instead of utilizing a trust to avoid the tax bills. Also, when the property is in a trust, the trustee has the power to administer and control the property, not the founder of the trust. Sometimes a trust can have several trustees and issues do arise when the parties involved don’t see eye to eye on how the property should be managed.
At the end of the day, you would want to contact The Rozhik Law Firm in order to examine all of your available options and decide what is the best approach on buying property. Whether you are looking to establish a trust, or buy the property as an individual, we have the expertise to guide you towards the most profitable route.
What are problems you may face when closing a home?
The moment has arrived in which all those weeks and months of preparation are finally about to pay off. You are almost ready to finalize the purchase of your home. But not so fast. Here are a few items you need to be aware of before you really are ready to sign away on probably the biggest purchase of your life.
Remember that home inspection you did earlier? Well that was weeks ago and maybe even months. The Rozhik Law Firm strongly suggests you call your home inspection vendor once more and have one last look around the home. Perhaps the recent storm or earthquake caused structural damage. Maybe there was an issue with plumbing in the past week which caused some flooding in the basement. Whatever the case may be, we strongly recommend you inspect everything once more to avoid any surprises after the sale is already over.
Remember that title search you did? The results finally came in. Guess what, there is a lien on the property due to back taxes. Richard F. Rozhik can assist in resolving this situation. We would either have the selling price adjusted to account for the added issue that you might need to pay, or just delay the purchase of the home until the buyer takes care of their debt. Regardless of what action is taken, this is another issue that can arise prior to the closing.
The Rozhik Law Firm works fast, but are patient when it comes to ensuring all facets of the transaction are covered and the parties involved are protected from any unforeseen hiccups. We take that extra measure and step in making sure you are shielded from a financial loss due to negligence and impatience.
What are some common residential real estate issues?
In our experience, there are three issues that can have costly residual consequences that you as the residential buyer need to be aware of.
Title issues and title insurance are two items we continuously mention on our website. We are trying to get this message clear to the general public on how expensive a stained title can be to the homebuyer. A lien can appear on the title even after all of the routine checks are made. This is where your title insurance comes in. It is by far one of the most important protective measures you can take to avoid a huge bill years down the line.
The deposit amount is always a topic up for debate between the buyer and seller. The seller obviously wants a big deposit and the buyer wants the deposit to be as small as possible. When dealing with big purchases, the buyer wants less monies tied up in the escrow account so they can provide a larger down payment. The seller however wants to avoid a decreased deposited amount in order to protect themselves from the buyer reneging on the deal. The Rozhik Law Firm has no problem acting as an arbitrator in this situation to assist in both the buyer and seller coming to reasonable terms on what the deposit amount should be.
Repairs and damages are usually revealed by the home inspector. Our attorneys insist upon hiring a professional to ensure these damages are out in the open prior to finalizing the deal. One area of debate that often arises is when the buyer and seller disagree on who should pay for these damages. A method of reconciliation for addressing damages can be applied towards lowering the selling price or simply having the buyer pay for the damages.
When hiring Richard F. Rozhik and The Rozhik Law Firm, all of the issues as stated above are accounted for and calculated by a team of professionals and experts to ensure every “t” is crossed and every “i” is dotted. We examine each step of the real estate closing process to protect your investment. Our goal is to have you feeling secure every step of the way and living in your new home without worrying about dirty titles and unsubstantiated repairs.
What are some common commercial real estate issues?
Buying commercial property is considered to be one of the best investments a business or individual can make. Be it for rent, or for personal use, this investment can have massive residual benefits. At The Rozhik Law Firm, we have encountered three areas in which issues often arise. We want to give our audience some advice on what they should be aware of in the commercial real estate realm.
Contracts. How are we able to understand contracts and all of the legal jargon? Well, we went to law school. You probably did not. We have spent thousands of dollars and countless weeks understanding how contracts work, what is and isn’t binding, and how to interpret all of the legal semantics associated with a contract. Our top closing lawyer, Richard F. Rozhik, not only understands how to decipher contracts, but drafts them on a daily basis. The average business person is an expert in many things, but contracts is usually not one of them. We have seen instances where a hundred page contract did not contain language to make the contract legally binding which caused endless lawsuits for all parties involved. We are here to avoid that. Our contract drafting experts make sure the contracts are binding and flawless.
Liens exist for residential property as well as commercial property. Our staff and our contacts in the real estate industry are here to ensure any issues on the title are revealed as soon as the buyer and seller are serious about transacting a real estate deal. The Rozhik Law Firm is here to negotiate and renegotiate any terms when titles are shown to have liens and other claims owed.
Zoning is something most business people don’t even consider during the closing process. Richard F. Rozhik, Esq., is able get the correct permits in place, and deal with the appropriate government officials to ensure all of the red tape is taken care of so you can get your business up and running.