,

“Do I really need that?”

There was a ghost at one of my recent closings. Not an actual ghost, but someone who had died 60 years ago was very present at the closing table. When he died, his wife inherited the house and later sold it.  This sounds fairly typical, correct? It was, except that wife had not filed any probate documents related to his death.

What does mean? Potentially, if left issue  unresolved, there could be a problem with the Title when the (current) buyer tries to sell the property. For that reason, I strongly recommended to my client that he should get Buyer’s Title Insurance.

Buyer often ask, “Do I really need that?” Don’t tell anyone, but before I started doing real estate closings, I may have thought no. Why would I want to spend even more money than I’m already spending on this house? Shouldn’t I be putting that money towards a new set of plush towels and paint?

My answer is very different now. Reviewing titles regularly, I realize how easily there can be a issue with a title; it doesn’t have to be big, something like a missing death certificate or an old lien, can either delay or stop a house from being sold or bought.

What is Title Insurance? (click on the link)

Is Title insurance worth the investment? Yes, yes, yes. Sometimes the risk obvious, like the friendly ghost in the story above; other times, it is not as easily resolved and significant expense can be involved.

The one-time expense for Title Insurance is usually minimal, especially considering the overall cost of buying a house. On an average house, the cost of a policy is equal to two or three hours of legal services. Without insurance, the cost of correcting or litigating a Title dispute could easily cost thousands or tens of thousands of dollars.

,

Putting the home in Homestead

As many of you probably know, I represent parties in transactions regarding residential properties. I love working with buyer and sellers, starting with Purchase and Sales, and through closing. I happily work with lenders and real estate agents to make sure that the deal not only happens, but that my client is properly protected.
As part of the closing process, I always offer to provide a Homestead for buyers. Most people do not know a lot about Declarations of Homestead, sometimes not even knowing if they have one on their current house; in order to help buyers better understand the benefits of having one, I always provide the information below.
It is never too late to file a Homestead, even if you have lived in your house for 20 years. If you are not sure if have one, I am happy to look it up for you.

WHAT IS HOMESTEAD?
Homestead protection is available for owner occupied, residential one to four family homes, condominium unit, operative apartments and for manufactured homes, which in each case serves as the homeowner’s principal residence. Co-owners of a home ‘share’ the exemption amount.

A homestead estate exempts a certain amount of the equity of a home from attachment, seizure, execution on judgment, levy, and sale for the unsecured debts of the owner of the home, except for the following:
• Federal, state, and local taxes, assessments, claims, and liens;
• Liens recorded prior to creation of the estate;
• Mortgages;
• Orders of the probate court for support;
• A levy or sale for ground rents (where the homeowner does not own the land); and
• An execution from a court to enforce a judgment based upon fraud, mistake, duress, undue influence or lack of capacity.

Under the Act, the homeowner’s equity in the home is protected for up to one year after the sale of the home, and, if the home has suffered a casualty that results in the payment of insurance proceeds, then the insurance proceeds are protected for up to two years, in order to allow the homeowner to acquire a homestead in a new (or reconstructed) home.

AUTOMATIC HOMESTEAD: All homeowners are entitled to automatic homestead protection of up to $125,000 of the equity in their homes. You do not need to do anything to benefit of this protection.

DECLARED HOMESTEAD: By making a written declaration of homestead, recorded in the Registry of Deeds, a homeowner’s homestead protection is increased to $500,000.

Some other benefits of declaring a homestead include:
a. A non-owner spouse who lives with the owner has the benefit of the homestead (until terminated in writing);
b. A declared homestead cannot be subordinated to an unsecured debt;
c. If an unmarried owner declares a homestead and marries thereafter, the declaration will automatically benefit the owner’s spouse upon marriage; similarly, a divorce and/or remarriage will not affect the homestead of the spouse who remains in the home as his/ her principal residence.
d. A trustee of property held in trust can declare homestead for the beneficiaries of the trust who occupy the home as their principal residence;
e. Elderly (age 62 or older) and disabled persons who declare homestead are each entitled to separate exemption of up to $500,000, which is personal and not shared with any other co-owners of the home.

, ,

Know Before You Owe

Have you ever purchased a house? If so, you know how stressful it is to have last minute adjustments made to the amount that you must pay at the time of closing. Effective on October 3, 2015, the Consumer Financial Protection Bureau has instituted changes which should make the process less stressful.  Buyers should expect the changes to positively effect future closings with two (2) major changes:

  • Providing Buyers with full disclosure, by postal mail or email, usually from the lender at least three (3) days prior to closing (with additional days allotted for mailing and receipt), thereby eliminating surprises and providing an opportunity to ask questions; and
  • Eliminating excessive documents by using two (2) easy to understand forms, the Loan Estimate and Closing Disclosure.

Along with Residential Mortgages Services, of North Attleboro, and Old Republic Title Insurance, I am sponsoring a free continuing education seminar for real estate agents on these changes, on October 26, 2015. If you are an agent or know someone who might be interested, please contact me for more information and to register.

If you are a potential Buyer or Seller and want more information, please feel free to contact me or check out this link:
http://www.consumerfinance.gov/blog/know-before-you-owe-making-the-mortgage-process-easier-for-you/

Happy Fall!

Three Lawyers and a House

Is the title, “Three Lawyers and a House,”  the start of another lawyer joke? No, not this time. Buying a house is not usually a funny experience. To the contrary, purchasing real estate is usually quite stressful, because it is often the biggest asset and expense that people will have during their lifetime.

Massachusetts General Law ch. 184, Section 17B states, in part, “The responsibility of the attorney for the Mortgagee (aka the entity or organization who is lending the mortgage, typically a bank or mortgage company) is to protect the interest of the Mortgagee. Mortgagors (the person requesting a mortgage, usually the homeowner) may, at their own expense, engage an attorney of their selection to represent their interests in the (closing) transaction.”

Closing attorneys are usually pretty considerate to buyers and seller during the transaction. They typically are open to resolving any last minute negotiations or disputes; however, they are not obligated to do so.

Hiring an attorney to represent your interest is worth the additional expense; the cost is usually minimal, especially considering the overall expense of purchasing a home. What makes it so important to have someone on your side?

1. Buying a house is one of the most important legal agreements an transactions that you will enter into during your lifetime.You want someone to protect your interests and make sure that they are present in the agreement;

2. There are a lot of legal documents that you will be asked to sign and they can be confusing. You want someone who will take the time to explain to you what you are signing, to discuss the implication thereof, and answer your questions;

3. Errors happen even with the best attorney. You want someone to confirm that the terms of the loan are what you expected, because an error could cost you a lot of money during the life of the loan or cause an issue with your Title; and

4. Last minute disagreements between Buyer and Seller are not uncommon. You want someone to advocate for your position and make sure that any resolution is in your best interest.

Mortgagees will often allow your attorney to also appear as their Closing attorney; this is an exception, where the conflict of interest can be waived, assuming that all parties agree. By doing so, you can be assured that the Closing attorney is protecting you.  If you want your private attorney to serve as a Closing attorney, be sure that they are qualified to do so and that they have access to Title Insurance, with a reputable company, such as Old Republic Title Insurance Company, for which I am an Agent.