Real estate. When most people hear or read the term ‘real estate’ they think of their home. This is understandable since the home is the single largest investment most individuals will make during their lifetime. If the choice of investment was made with time and consideration to both needs and wants, the thought of the home should bring a smile. However, while we take great pleasure in our home, do we take the time to consider the liabilities we expose ourselves to as either a seller or buyer?
As the seller of real estate, you will most likely be asked to sign what is known as a General Warranty Deed. Do you know that when you sign this deed you are warranting the title against defects or claims of others that may arise as a result not only of your actions, but the actions of all prior owners of the same real estate? As a buyer, do you realize that when you accept the deed or title to real estate, you are accepting title subject to all outstanding claims or interests existing at the time you complete your purchase?
A common title issue with real estate is when a seller or prior owner is involved in a divorce. One party is awarded the home, but without specific language or deed from the other party, there is no effective transfer of title. In rural areas, where descriptions may be long running metes an bounds descriptions composed by a surveyor, typographical errors cause the property to not be adequately described. In such cases corrective deeds or even court action may be required to clear title.
If you are acquiring title from an estate, or the family of a deceased owner, watch out! Without a probate proceeding to determine heirs and clear claims of creditors, particularly those claims related to the last illness or burial, you may be acquiring only an interest in the real estate, and that would be subject to prior claims of creditors.
Short sales are a product of today’s economy. A short sale is when a seller is selling the property for less than the balance owed on the existing mortgage. The mortgage holder has the right to approve or reject the sale. The mortgage holder can dictate the terms under which the mortgage will be released. If the terms are not strictly adhered to, the mortgage company is not obligated to release their prior lien.
The current economy has created a strong market for investors in residential and commercial properties. The residential properties may or may not be occupied by the seller; they may be occupied by tenants. Commercial properties will most likely be occupied by tenants. As a buyer you take title subject to the terms and conditions of the existing lease – instant landlord. Be sure to read and understand the terms of the lease and the liabilities you are assuming.
We have more than thirty years experience dealing with real estate sales and purchases – residential, rural and commercial. This includes addressing and clearing issues related to outstanding liens, ownership interests, boundary disputes, and commercial interests.