Real Estate Seacoast Blog

What is a cloud on the title? A cloud is any condition that affects the clear title to real property.

I have seen many different examples of title defects in my years of practicing real estate. Properties that were held 1/2 in trust and 1/2 by an LLC. Where the previous sale only transferred 1/2 of the property even though both the trust and the LLC were the same person. Septic systems on the neighbor’s property. Mortgages that have been re-financed 6 times but the discharges were not recorded properly. Floor plans on condominiums not recorded with the declaration. Whole condo communities where the deeds are not properly referencing the unit we are selling. The list goes on and on.

Clouds come in many forms

• Fraudulent Conveyance - they didn’t have the right to sell the property.
• Interests of Missing Heirs - maybe there was no will. There could be parties with rights to the estate
• Encumbranceslike liens or undischarged mortgages - IRS taxes, mechanic’s or materialman liens, pay off of the mortgage was never recorded properly.
• Boundary Lines - can come into play on many lots or maybe there is an adverse possession issue.
• Encroachments- the neighbor garage or the properties garage is built over the property line.
• Incompetent Grantor- mental capacity or not of legal age.

As you can see there are various types of clouds that can affect a title’s marketability. Many title companies are willing to do a preliminary title abstract prior to listing your home for sale. This will often come up with the most glaring title defects so that they can start correcting them immediately.

Are you starting to sweat the move? Does the thought of packing boxes put you in a state of paralysis? You bought/sold the house now what are you going to do with all your stuff? Have you stopped enjoying the thought of that fabulous new home?

Consider hiring a professional mover. I have done the move it yourself and hired professional movers. Now that I have had others pack for me, I will never go back. Yes, I do spend a lot of time clearing through the clutter of items that are mine in advance. But why kill yourself when moving is rough enough already. Having a professional pack and move your belongings allows you to concentrate on the positive aspects of your move. The important thing is to do your homework first.

Not all movers are alike, save yourself stress and broken dreams by investigating each potential moving company to be sure they are reliable and reputable. Ask everyone who they have used and had good luck with - your real estate agent, friends, neighbors, family. Check the Better Business Bureauto see if there are any complaints against them. Google them and see what comes up.

Once you have narrowed down your selection ask some important questions:

1. How long have you been in business?
2. How long has the estimator been in the industry?
3. Is the company insured?
4. How does this insurance cover your belongings?
5. Do they have worker’s compensation? (You don’t want to be liable for any accidents)

Next get an estimate of what it will cost for the move at least 6-8 weeks in advance. Local moves are usually figured out by the number of movers and truck multiplied by the hours on the job. Long distance moves your costs are mainly charged on the weight of your stuff and how far they have to go. In both cases there can be extra charges figured into the costs. These include the boxes, bubble wrap, special handling of antiques/art, etc. Have the estimator come to your home and look at how much stuff has to be moved. Then get a written copy of their estimate.

Written estimates are key in making this decision. First it protects you from surprise expenses and second you don’t want someone to understate the fee just to get your business. After the estimate you want to get on their schedule no less than 2 weeks before the anticipated move. The earlier the better is my rule of thumb. Try to remember that May and September are the busy months for movers.

Finally make sure the mover gives you an estimated time of arrival so you can have someone at the new house to accept your household goods otherwise the items could be put into storage which will cause delays and storage fees.

Now that you have the right professional on your side you can sit back and enjoy the moving day and the new start in a new home!

(c) Shannon Aldrich, Keller Williams Coastal Realty Portsmouth NH

You are ready for closing and you look at the settlement statement to check where all your money is going. One cost stands out becuasue you can choose not to pay it - owner’s title insurance. However, hidden risks of defects in the title can cost you thousands in legal fees not to mention the stress, frustration and time to correct. The best way to protect yourself is to purchase owner’s title insurance. Notice I am saying  owner’s title insurance  not lender’s title insurance. If you have a mortgage on the property the bank will require you to buy the lender’s policy. This covers their interest in the property not yours. The owner’s policy is optional and many buyer’s think they can save some money by passing it by. This is not a good plan. Even the most meticulous search of the public records by a title attorney can miss hidden defects. The owner’s title insurance policy pays the legal fees to defend your title in case of something missed. It is a one time charge that you see on the HUD at closing. Don’t pass it up because it can protect you from the following errors -

1. Forgery
2. Fraud in connection with the execution of documents
3. Undue influence (pressure) on the grantor (seller) or executor of a will
4. False impersonation by those puporting to be the owners of the property (This is why we bring licenses to the closing - are you really who you say you are when signing that deed? Or are you pretending to be the wife/husband and are really the girlfriend/boyfirend)
5. Incorrect representation of marital status of a grantor (Saying you are single when you are married)
6. Undisclosed or missing heirs
7. The will was not properly probated
8. Mistaken interpretaion of wills and/or trusts
9. Mental incompetance of grantors (Not all there in a legal sense)
10. Conveyance by a minor (Under 18)
11. Birth of heirs subsequent to the date of the will (The parent died before the baby was born and the will wasn’t updated)
12. Inadequate surveys
13. Incorrect legal description
14. Non-delivery of deeds
15. Unsatisfied claim not shown on the record (A lien that was not discharged)
16. Deeds executed under false poer of attorney
17. Confusion due to similar or identical names (Very common with juniors)
18. Dower or curtesy rights (homestead) of ex-spouse or former owner
19. Incorrect indexing of public records
20. Clerical errors in the recording of legal documents
21. Delivery of deed after the death of a grantor (Death stops everything)

Don’t pass up owner’s title insurance. Being penny wise and pound foolish could be a costly error when buying a house.

(c) Shannon Aldrich, Keller Williams Coastal Realty Portsmouth NH

You finally found the perfect new home, the seller eagerly accepted your offer, the loan is approved and you are ready to move in. But before the keys are in your pocket you have to get to the closing. A closing is where you pass ownership from one party to another. The seller signs the deed, you sign the mortgage papers and everyone signs the HUD. There is a lot of paperwork involved and can sometimes be very confusing.

As the Buyer, you will sign and initial and sign again until you think your fingers will fall off.And then you have to turn over a sizable bank check to cover the down payment and closing costs. Closing costs are the fees associated with the transaction, but what do they all mean. For many Buyers these fees just remain a mystery and they pay thousands of dollars for things they don’t understand.

It is easy to get familiar with these costs. Some relate to the mortgage and others are government related. Fees and tax stamps vary locally but here are some common fees and what they are for:

Loan Origination Fee- Typically covers the lender’s loan processing costs. This fee is often one to three percent of the total mortgage. Notice I said total mortgage not the total sale price of the house. Other fees associated with the creation of the loan can include Loan Document Preparation, Underwriting, Processing, Funding and Administration Fees. RESPA (Real Estate Settlement Practices Act) requires that lenders disclosed the potential costs of all these fees in advance and in writing.

Points - This is a one time charge if you have chosen a loan discount in the form of “points” to lower your interest rate. One point equals one percent.

Title Insurance - There are two types of title insurance - the lender’s policy and the owner’s policy. If you have a mortgage on the property you will have to buy the lender’s policy to insure the loan against title defects. The owner’s policy is optional. Personally I feel you are very foolish if you do not buy title insurance on all properties. They insure you against any defects in the title. A few hours of a title lawyer if there is some glitch on the deed is well worth the cost.

Transfer taxes and recording fees- The money you give to the State for the privilege of buying or selling a house. Transfer taxes are based on the purchase price of the house. In New Hampshire they are $15.00 per thousand. In Maine they are calculated by dividing the sales price by 500; round the answer up to the next highest whole number; then multiply the answer by $2.20. Transfer taxes are usually split between the Buyer and the Seller. But you can negotiate to have one of those parties pay them all. Recording fees are charged to record the deed at the courthouse.

Appraisal - Pays for the appraisal of the property. You may have already paid this fee outside of the closing at the beginning of your loan application process.

Credit Report- Covers the cost of the credit report that the lender requests to see if you are worthy of a loan. This may also be paid up front in the application process.

PMI Premium- PMI = Private Mortgage Insurance. When you buy a home with a low down payment, the lender usually requires you to pay a fee for mortgage insurance. This protects the lender in case you default on the loan and go into foreclosure. Once you achieve 20% equity in the home you can apply to eliminate this insurance. Or if you are putting 20% down this fee will not come into the equation.

Escrow Accounts- This is a fund where the lender holds money in order to pay the property taxes. The taxes can equal the number of months that have elapsed in the current tax cycle plus two months. This is a tricky calculation because some town collect in arrears and some towns collect in advance and some towns do half in arrears and half in advance. You can also have an escrow account for homeowner’s insurance. Typically you have to bring proof of one year’s insurance paid in advance to the closing.

Keep in mind that all of these fees can be negotitated as part of the original purchase and sales contract. In some instances that Seller might be willing to pick up some or all of these costs for the closing but remember that this has to be agreed to with the original terms of the offer. Talk to your real estate sales professional in your area to find out what you can expect to pay during the closing of your dream home. If you are looking for your dream home in New Hampshire of Maine, give the Real Estate Seacoast Team a call to find out where the best deals are! (603) 610-8511 or send us an email at saldrich@kw.com

(c) Shannon Aldrich, Keller Williams Coastal Realty Portsmouth NH

How about a career that you can never be laid off from and you are able to make unlimited income? Ever thought about getting your real estate license? You have been a salesperson for how many years? Or your friends are always commenting on how you understand everything about houses. Why not take the next step and insure your future in the real estate business. Or maybe you know of someone interested in getting into the business. There is a lot of opportunity in the industry right now for the right people. A lot of agents have left the business which means less competition for you. This is the licensing class for you. So what are the details?

Classes are starting in Portsmouth on April 6 and May 18. Monday & Thursday nights from 5:30-9:30pm for 10 sessions. Cost is $299 with all books and materials included. The least expensive option out there currently. This 40 hour class is required by the State of New Hampshire before you sit for the exam. Come spend a few evenings investing in your future and have fun in the process.

 Sign up at The Real Estate Learning Group’s web site

Recently here on the Seacoast we have had reports of several home fires. One home in Portsmouth caught fire again the next day. Can you imagine watching your home burn TWICE?! So I thought I would pass along some home safety tips in regards to fire.

1. Make your home escape plan - and practice it! Draw up a simple floor plan including windows. Sit down with your family and discuss the two best ways to get out of each and every room. Decide where you will all meet up on the outside. Make sure everyone knows that when the smoke alarm goes off - get out and stay out.
2. Check the batteries in your smoke detectors monthly. Replace batteries every 6 months. Replace the whole alarm every 10 years.
3. Cooking is the leading cause of home fires - Pay attention to your cooking. Stay in the kitchen when you are frying, grilling or broiling food.
4. When cooking - if you have to leave the room - turn off the stove.
5. Use a kitchen timer to remind you that you are cooking and check on the progress regularly.
6. Keep children and pets away from the stove.
7. When cooking, wear clothing with tight fitting sleeves so you don’t catch on fire.
8. Turn space heaters off when you go to bed or leave the room
9. Remove abandoned vehicles from your property.
10. Store flammable liquids in a locked shed or detached garage.
11. Put candles out when you go to bed or leave the room
12. Provide smokers with deep, sturdy ashtrays.
13. Smoke outside- designate a smoking area outside. Provide a safe container for butts.
14. Install residential automatic sprinkler systems.

(c) Shannon Aldrich, Keller Williams Coastal Realty Portsmouth NH

Here is a quick reference guide for the 2009 Home Buyer Tax Credit. As part of the Stimulus Package, the home buyer tax credit has be extended and changed.

The changes include:

1. Increase of the tax credit from $7,500 to $8,000
2. No recapture after three years
3. Includion of homes purchased with Mortgage Revenue Bonds (MRB) funds

A tax credit is different from a tax deduction. A tax credit is deducted from the amount of federal taxes owed by a taxpayers. A tax deduction reduces a filer’s adjusted gross income.

Here are the features of the 2009 Home Buyer Tax Credit

• First Time Home Buyers (meaning no ownership in the last three years)
• Any property in the US that will be your principal residence is eligible
• No restrictions on sales price
• Maximum credit caluculation is 10% of the purchase price up to $8,000
• No repayment of the credit as long as the home is not sold within 3 years of the closing date
• There is an income eligibility requirement - Max $75,000 for singles and $150,000 in income for married persons.
• You must purchase the home between 12/31/08 and 12/1/09
• You must be a US citizen
• Not eligible if you live in the District of Columbia
• If your taxes are lower than the credit you get a refund of the difference!

That’s it in a nutshell. It’s a great life and a great time to buy a home!

(c) Shannon Aldrich, 2009

The 2009 schedule is posted for all New Hampshire Salesperson Pre-Licensing Classes, New Hampshire Broker Test Preparation, New Hampshire Exam Prep for Reciprocal Licenses and Maine Exam Prep for Reciprocal Licenses with Instructor Shannon Aldrich and The Real Estate Learning Group.

Follow this link for complete schedule of classes in New Hampshire and Maine.

http://www.trelg.com/110.html

When selling real estate lots of questions come up. How long does it take to sell property? These days that’s the Number One question! Some properties sell in a few days, others may take several months or more than a year. Recognizing some key factors that influence marketing home, you can gain better control over market time.

The are several factors to balance but the single greatest factor has to be location. Location will always be the single greatest factor affecting value. It is not just where the house is located but also how it is located on the site. And don’t forget the neighborhood - the desirability of the houses around you is basic to a property’s fair market value. You can’t move the house so you have to be reasonable to your expectations. Over improving a property will not necessarily increase its value. It just makes you the most expensive home on the block.

Competition - what are the other homes on the market offering and what price are they asking? Your real estate agent can show you who you are competing against. Ask him or her to bring you comparables of what is currently on the market, what has recently gone under contract and what has recently sold. Buyers compare your house against others in the area. Buyers are very savvy and have access to all the same information. They will interpret value based on the facts of your competition. Do your homework on the competition.

One factor you can control is condition of the home. Getting ready to sell is something you can do. Check out my other blogs on “Getting Ready to Sell Checklists” How your home looks will dramatically affect the time it takes to sell your home. Preparing in advance is worth the effort. You want the inside and outside to be show perfect. But remember that Buyers make decisions very quickly. Sometimes they won’t even give the inside of a home a chance just by the curb appeal.

The more terms available, the larger the market, the quicker the sale and the higher the price. Offering closing costs; all appliances; home, septic and well inspections; assumable mortgages; flexibility is key. Structuring terms to meet your objectives is important to successful marketing.

And for the final factor - you have to look at the price you are asking. Will the local market bear the price you are asking. Go over your Comparable Market Analysis in detail with your real estate agent. If you don’t properly price your home you could delay or totally prevent the sale. You want to be priced right to begin with vs. put it on higher “just to see” or so that you have “negotiating room”. Work with your real estate agent to determine the best possible price from the beginning.

Take all of this into consideration before putting your house on the market. And you can be in a better place to determine how long your home will be on the market.

(c) Shannon Aldrich, Keller Williams Coastal Realty

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With so many farms in any area, my question was how do I find them all. Could I make my own list to help myself and others tracking down fresh local produce. What a task! Well much to my happiness I found a few websites that have the most amazing lists of local farms. Everything is there from where they are located to what they produce. If you are like me and interested in supporting our local agriculture check out these sites and plan your menus around their bounty!

Seacoast Harvest

Northeast Organic Farmer’s Association

Local Harvest

Slow Food Seacoast

Seacoast Eat Local

Enjoy!

(c) Shannon Aldrich 2009