Home Ownership Information

 Posted by at 7:35 am
Nov 242009

The National Association of Realtors recently opened a new consumer website to “help you make smart and timely decisions about your home.” Content covers home improvement, maintenance, taxes, finance, insurance, and even ways you can get involved in and enrich your community. I’ve only surfed the site a little, but it does appear to have some good information. One of the things I like is that you get an estimate of how long different things will take and how much investment is required.

Since I’m putting together a short article on home insurance for the next “Mooseprint” I looked at that section on the site. “Improving your insurance score” takes an estimated two hours, costs $12.95 (for a report, apparently) and could yield a $60 annual savings. That’s not a bad return on investment, but I didn’t start the project–yet. (Another feature is that you can apparently create a “binder” (notebook) of projects.

Check it out at House Logic… let me know what you think!


Title What?

 Posted by at 10:11 am
Nov 112009

A recent question from a buyer client suggests it might be a good time to review some very basic concepts regarding title. Let’s start by understanding the word “title” is describing the evidence one has of right of ownership. A “clear title” basically means the ownership of the land is clear and without question.

When a buyer purchases a property, some assurance that the current seller has “clear title” is in order. I could sell you the Brooklyn Bridge, couldn’t I? How do you know whether or not I own it and have the right to sell it? (I could create a fake deed and register it–the existence of a deed is not a guarantee I truly own the property.)

There are three important terms we use when we talk about title.

A title search is performed to establish the links in the chain of title and discover any potential clouds or problems (such as liens) with the title. This is the service buyers and lenders commonly get. (If you are mortgaging your property it will be required by the lender.)

A title opinion may be issued by an attorney. This becomes the attorney’s legal opinion that the title is “good” or clear. Because the attorney is assuming risk; these tend to be expensive. Do not confuse a title search with a title opinion.

Title insurance is a policy issued by a Title Insurance Company. Typically the policy is issued based on the title search. It ultimately is about risk management. Nobody really says “you have a great (clear) title”—the insurance company says “based on the title search we are willing to insure your title.”

If something or someone comes along after you’ve purchased that brings your title/ownership of the property into question, the Title Insurance Company will either defend your title or pay you for the loss of your property – up to the face amount of the policy. The premium for this coverage is a one-time charge and there are numerous options available to the buyer including an “escalating” policy in which the face amount increases automatically.

Don’t let your eyes glaze over when the topic of “title” comes up. These are not difficult concepts, really and you should insist on explanations that you understand well enough to make good decisions.


Tax Credit Passes…

 Posted by at 2:53 pm
Nov 092009

Unless you live under a rock (do you want to list it?) you’ve probably heard that the President has signed the “expanded and extended” tax credit for home buyers. I’m not sure how many people have read the fine print… or, for that matter, done an objective analysis of whether or not this makes it a good time to buy. Perhaps the best news is that you at least have time to consider it–this time the program runs until April 30th to get “under contract” and until July 1st to close. The other big news is that the credit is not limited to first time home buyers. Note, however, that this does not automatically mean it’s a good time for you to “trade up.”

Rather than try to repeat the information almost everybody is publicizing, here’s a link to a document with frequently asked questions (and answers) developed by the National Association of Realtors. If after reviewing the summary information you think you might benefit, look at the big picture… in talking with a colleague today I noted that often times the best answer to questions is “I don’t know, but I know how to find out.” Should you take advantage of this tax credit?

I don’t know, but I know how to find out.