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What is a Title Search?

It may seem like there are a million steps to the closing process when buying or selling a home. A title search is just one of the many stages and title problems may account for almost 10% of closing delays. As a seller, doing a preliminary title search can help avoid costly delays at the end. So, what is a title search and what does it disclose?

In the simplest form, a title search identifies who owns the property. This may be obvious, but surprisingly, sometimes the party selling the home may not actually have the legal right to do so, at least on paper. For example, in the case of a married couple, the property might be in only one spouse’s name. Another example would be a property held in trust or probate; it could take some paperwork to correct title to allow a sale.

A title search also uncovers any existing liens on the property. This would include any current mortgages and may find old debt or unreleased loans. Items which must be paid off or removed prior to sale. Finally, a title search will list any deed restrictions, such as easements or property restrictions.
If the title search does find any issues, the seller will need to remove them before the closing can occur. Once the sale is closed, title insurance ensures the new owner against any title issues that were not discovered during the search.

No one wants unexpected delays during closing. A seller can help mitigate title issues by running a preliminary title search at the time of listing. This gives them plenty of time to address any outstanding title issues before it costs buyer and seller valuable time in delays.

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Buying a Home with an Easement

If the home you’ve fallen in love with has an easement, you may be wondering how this affects you. An easement gives a person or entity the right to use part of your land, but only for a very specific reason. For example, a utility company may have an easement on your property to maintain an electric pole. Another example is an easement which allows your neighbor to drive through a portion of your land to access their garage.

Easements will be disclosed as part of the sales process and if you’ve discovered that your new purchase is subject to an easement, it’s important to learn the different types and their effect on your use of your land.

Types of Easements

  • Appurtenant vs. Gross – An appurtenant easement benefits the property, by allowing access through another’s land, such as the neighbor’s garage example above. A gross easement benefits an individual or entity, such as the utility company example above.
  • Private vs. Public – A private easement allows a specific person to access your property while a public easement allows any member of the public to use your land.
  • Affirmative vs. Negative – Most easements are affirmative (which is to say they allow something to happen) but some are negative easements, such as preventing a neighbor from building a second story that blocks a view.

Easements are not permanent and can be challenged if the need no longer exists. If your property is subject to an easement. It’s important to understand how it will impact your property before completing the purchase.

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Getting Outbid? Strategies to Make Your Offer Stand Out and Get Accepted

Summer is traditionally a busy time for buyers and sellers. This year has been no exception—and with lower interest rates, many homebuyers are finding the competitive environment challenging. With multiple buyers competing for properties, even terrific offers are often being outbid.

Fortunately, there are some things you can do to make your offer more attractive to the sellers and increase the chances of getting the property.

  • Have Full Pre-Approval – A step beyond pre-qualification, a pre-approval involves submitting your full application to underwriting. Your lender will collect all your financial data and submit for review. This is stronger than a pre-qualification; a pre-approval requires the buyer to provide the proof of their ability to qualify for the loan.
  • Increase the Earnest Money – Earnest money is the deposit held in escrow. While the contract will dictate how monies are disbursed in the event of a cancellation, increasing the amount offered can show the seller you’re serious.
  • Add an Escalation Clause – In a bidding war, it can be difficult to know what to offer because you want to outbid the competition without going too high. An escalation clause is one way to automatically outbid the others. The clause typically offers an amount—$1,000 for example—higher than any verifiable offer up to a specific amount. This can ensure yours is the highest offer.
  • Pay any Appraisal Shortage – When offering more than asking price, sellers become concerned about the appraisal coming in too low. If you are willing to pay over market value, include the amount of shortage you are willing to pay.
  • Remove Inspection Contingency – This option can be tricky, but if you are planning a large remodel or are willing to tackle any defects found, then you can make your offer stronger by accepting the home as-is.

In this fast-moving, competitive real estate market, it’s important to make your offer stand out from the crowd. These strategies are great ways to demonstrate to the sellers that you’re serious about buying their home, increasing the chance of having your offer accepted.

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5 Home Buying Acronyms You Need to Know

For many, the idea of buying a new home can seem overwhelming; the reality is the process is rather simple once you understand the steps. Part of that understanding is learning the most common acronyms used in buying a home. Here is a quick reference list of the 5 most often used acronyms and how they pertain to your transaction.

1. APR (Annual Percentage Rate) – APR is the total cost of borrowing money; this includes the interest rate, closing costs and other fees associated with the loan.
2. FRM (Fixed Rate Mortgage) – A fixed rate loan is one where the interest rate remains the same over the life of the loan.
3. DTI (Debt to Income) – DTI is the percentage of your income used to service all your recurring debt; this includes your mortgage, credit cards, car loans and other loans or lines of credit.
4. PMI (Private Mortgage Insurance) – Loans for more than 80% of the home’s value are subject to PMI. This is insurance which protects the lender in the event of borrower default and every loan with less than a 20% down payment will include PMI.
5. P&I (Principal and Interest) – P&I is the portion of your loan which goes to pay down the principal of the loan amount. Other monthly costs could include taxes, PMI, association fees and other costs which are included in your payment but separate from P&I.

Real estate has a lot of terms, and understanding the most common can take the mystery out of the home buying process and provide peace of mind as you search for your new home.

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Be Prepared for Closing Costs

Saving for a down payment in preparation for buying a new home is pretty common knowledge.  While FHA and VA loans still offer little to no money down, most potential homebuyers will need to save at least 5-20% of the home value.

Unfortunately, many first-time homebuyers are dismayed to learn that in addition to the large down payment, they also owe thousands of dollars in closing costs that they might not have expected. The national average for closing costs ranges from 2-4% of the purchase price, which adds considerably to the amount of savings needed to buy a home. In addition, while not a closing cost, most lenders also require a savings reserve equal to at least two months of the mortgage payment. Needless to say, it adds up.

Let’s break these costs down.

Closing costs include fees charged by the escrow or closing attorney, as well as costs associated with obtaining a home loan, including:

• Escrow fees
• Title search and filing fees
• Appraisal fees
• Home inspection fees
• Wire transfer fees
• Loan costs – These include what are termed “points”; each point is 1% of the purchase price and is used as both commission for the lending officer and as an upfront fee to reduce the loan interest rate.

These are just a few of the extra costs associate with buying and closing on a new home. It’s important to know these costs ahead of time, so potential homebuyers can save the appropriate amount of money needed to buy a home. Nobody wants to be surprised by unexpected costs and and end up missing out on the perfect property.

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Save on Housing in Retirement Years

Retirement is a time of freedom; it’s something people look forward to most of
their lives. As you prepare for retirement, it’s natural to consider ways to reduce
your housing costs. Fortunately, there are some great ways to enhance your
lifestyle while reducing costs.

6 Ways to Save Housing Costs in Retirement

1. Downsize – The most common way to reduce costs is to downsize. Many
older Americans find they can greatly reduce or eliminate monthly
payments while reducing upkeep.

2. Home Sharing – If you are single, consider finding a housemate.

3. Retirement Communities – 55+ communities offer a lower-cost, low maintenance lifestyle.

4. Retire in Phases – Plan for the stages of retirement, including possible
assisted living. Buying into these multi-stage communities can save
thousands throughout your retirement.

5. Look at Your Mortgage – Make your current monthly payment more
affordable by refinancing at a lower rate. You might also consider a reverse
mortgage. Federally insured reverse mortgages can provide income to
supplement your retirement savings.

6. Sell Your Home – Maybe you no longer need to own a home at all. Selling a
home and pocketing the proceeds can give you the freedom to travel more
and rents may be less expensive than owning.

If it’s finally time to retire, or if you are in the final planning stage, consider the
cost of housing. Saving money on monthly expenditures is the best way to make
the most of your hard-earned retirement.

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Top Trends for Your Outdoor Living Space

Summer is in full swing and you’re spending more time outdoors. For most of us, this still
means primarily in our own backyards. Personal outdoor space has never been
more popular and if yours could use a little sprucing up, here are the hottest
trends for 2021.

Outdoor Kitchens – This trend is going nowhere. Ever since the first built-in
BBQ showed up, homeowners have loved cooking outdoors. Choose from a
simple pizza oven to a full chef’s set-up with multiple ovens, refrigerators,
cooking spaces, and bar.

Edible Gardens – While home gardeners have enjoyed seasonal tomatoes
and herb pots for decades, the rise of sustainability trends have increased
the attention on home-grown, organic fruits and vegetables. Any small
space can be transformed to grow your favorites.

Privacy Structures – Creating some private outdoor space is relatively easy.
Simple strategies, such as a large, well-placed umbrella or planter
containing tall grasses, can carve out some private outdoor space. Another
trend is using larger furniture, such as covered daybeds or gazebos have
made a strong return to the pages of design magazines.

Front Yards – With the lock downs and restrictions of the past year, front
yards have made a comeback. As people have enjoyed the ability to
socialize with neighbors and friends as they pass by, not only have front
porches become more popular but adding a patio or sitting area in the front
yard has topped the garden trends this year.

The warm weather is here for a while. This is a great time to explore the many ways to enjoy
your outdoor space. From simple weekend projects to large-scale remodels, the
trend toward using the outdoors to supplement indoor living space is here to stay.

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5 Refinancing Mistakes to Avoid

Mortgage interest rates are the lowest they’ve been in years and perhaps you’re wondering if it’s time to refinance your loan. Lenders advertising their refinancing services make it sound as easy as filling out a form and paying less each month. While refinancing does not need to be complicated, here are 5 common mistakes that could cost you thousands of dollars over the course of the loan. Refinancing can be a great experience if you can avoid making these mistakes.

  1. Not Shopping Around – Not all loans are structured the same. It’s important to compare your options. Even loans with the same interest rate can have different costs, fees, and terms.
  2.  Shopping for Too Long – Interest rates change quickly and, in this volatile market, it’s possible to lose a great interest rate by looking for too long. Consider getting three different loan options at the same time and choosing the best option out of those three to work with.
  3. Adding Years to Repayment – Interest rates are not the only consideration in deciding to refinance. If you are 7 years into a 30-year loan, restarting the clock with a new 30-year loan can cost you thousands of dollars. Never refinance with a longer term than your current status.
  4. Not Considering Your Job Stability – The pandemic has created instability in the job market; consider your employment situation carefully before using precious savings for loan costs. Additionally, if you are moving from a 30-year loan to a 15-year loan, your payment might go up. Make sure you have the income to comfortably pay that increase each month.
  5. Assuming Your Credit is Great – Before looking for a refinance, check your credit score and make any adjustments before you get a surprise at closing.

This is a great time to reduce your mortgage interest rate, while rates are low. Consider all the aspects of the refinance offer first and make sure you get the best option to save money.

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10 Home Inspection Red Flags

Most homebuyers realize that they can’t expect a perfect home inspection report when buying a resale home. Cosmetic flaws and minor repairs are easily managed and shouldn’t be deal breakers. That said, there are some issues that are more serious and should give the buyer pause if not addressed adequately.

10 Home Inspection Red Flags

1. Leaky and Rundown Roofing – watch for signs of current or past water damage.
2. Poor Drainage – drainage issues can cause serious damage to the home foundation, siding and basements.
3. Foundation Issues – signs of foundation problems can include cracks around doors and windows or uneven floors. Foundation problems can cost thousands of dollars to correct.
4. Plumbing Problems – major plumbing issues should be considered carefully and further explored.
5. Pest Infestations – termites and other wood-eating pests can cause extensive damage that can be hard to find and costly to repair.
6. Mold – that musty smell could be due to hidden mold and further investigation should be undertaken as mold can be dangerous to the health of the family. Depending on the type of mold, it can be very difficult to remove entirely.
7. Faulty Heating System – a malfunctioning furnace can be a fire hazard.
8. Electrical Wiring – faulty wiring can cost thousands of dollars to repair.
9. Structural Damage – sagging joists, rafters and door jambs can be evidence of larger issues.
10. Deferred Maintenance – a home in poor condition could be hiding more serious issues due to chronic neglect.

Homebuyers should be alert to these issues and know the costs to repair before concluding the sale. Home sellers should address these issues before putting the home up for sale to ensure they get the best possible sales price

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Home Issues That Shouldn’t Be Deal-Breakers – and a Few That Are!

Finding the right home can sometimes feel like hunting for a needle in a haystack. Unless you’re buying brand-new construction, every home has some drawbacks, whether it’s style or real maintenance issues. If you’re looking for your next home, understanding the difference between minor issues and true deal-breakers can help you evaluate your options and make the best possible choice.

Manageable Annoyances

• Cosmetic – All aesthetic concerns can be fixed – for a cost. The key is to understand the difficulty and level of effort or money involved. A dying lawn can be addressed with new sod. Is the kitchen dated? A new backsplash is relatively inexpensive. With some fresh paint and new lighting fixtures, you can easily brighten a room and make a small space seem more expansive.
• Healthy Homes – Many homes have older carpet, drapes, and other elements that can irritate allergies. Home air filtration systems are affordable and very effective in clearing the particulates out of the air. Replacing the attic insulation and cleaning the vents are easy and inexpensive ways to correct these situations.

Deal-Breakers

• Foundation Problems – Foundation cracks and other issues can be expensive or impossible to correct.
• Mold – While treatments for mold are available, they normally involve major demolition to open walls and flooring for access. Unless the sellers will correct the mold issue before closing, it’s better to reconsider on this one.
• Water Leaks – Signs of water damage or existing leaks could be a reason to search for a different home. Leaks and water issues will most likely bring you to the mold issue above.

Buying a resale home almost always involves some kind of preexisting issue, but not all should be reasons to walk away. If the home you like has problems, before you move on, consider the costs involved to remedy the challenge.