Closing – Page 2 – Miami Real Estate Attorney Blog

Buyers Beware of Buying Foreclosures

Foreclosures only seem like good deals today. But if you’re going to buy a property being foreclosed then you really need to know what you’re getting. Therefore, buyers beware of buying foreclosures. That’s why it is critical for buyers to perform all of the necessary due diligence prior to purchasing a foreclosed property. As part of your due diligence, it is vital to have a home inspection performed by a qualified reputable home inspector. This way you’re going to know what you’re buying. You need to get that home inspection performed on time so you can make an educated decision about the transaction.

The importance of knowing what you are buying cannot be overstated.

It happens every day where potential property owners fall into a trap. The trap is when they believe in a property’s potential without consulting a qualified home inspector. They rush through the transaction thinking they are going to make a “quick buck” by flipping the foreclosed property, or they may just want to buy a cheap fixer-upper to make their dream home or office space.

Whatever the case may be, what inevitably happens most of the time is the buyer just purchased a bigger problem than they realized. The property may require a lot of repairs, or worse a property that is condemned.

Of course, there may also be problems with the chain of title. The foreclosure may not have been conducted properly by the foreclosing party which may mean that the buyer does not even own the property properly. That would invariably result in additional litigation to clean up the chain of title and ownership rights.

Therefore, it cannot be stressed enough that if you want to make a successful foreclosure purchase here in Miami, take the time and effort to find a reputable home inspector that you can trust. Spend the money on hiring the necessary professionals to perform all the necessary searches and engage in the necessary due diligence to learn as much about the property as you possibly can.

Remember, buying a foreclosure is only a good deal when you take the appropriate steps to ensure that the property you are buying is worth the money and effort required. Do not hesitate to contact us should you wish to discuss further.

Harp 2.0 Mortgage Refinance Real Estate Option

Today we want to talk to you about the Harp 2.0 refinance real estate option that could save you lots of money. The Home Affordable Refinance Program or Harp 2.0 is a government program that allows home owners of both primary residence and investment properties to refinance their properties and take advantage of some of the very attractive low interest rates that are present today. It was started by Federal Housing Finance Agency to help those homeowners who were drowning in debt by refinancing, even if they owed more than what the house is worth. Please be aware that this government program expires in 2017, so if you are interested in refinancing your property it’s something you should take advantage of now. Some of the requirements to be eligible for HARP 2.0 are that you had to have sold your mortgage to either Fannie Mae or Freddie Mac by June 1, 2009.

You must have no late payments in the last 6 months, no less than 1 late payment in the past 12 months, you must be up to your current mortgage payment along and this must be your first refinance through HARP.

Along with the HARP eligibility requirements, lenders may have their own. Lenders require you to provide proof of income, and some even require a minimum credit score to qualify. Many banks like Bank of America, Chase and Wells Fargo are experience delays in the application process due to the sheer volume of applications. So as I have said before, if this is an attractive option for you, you will want to start the process immediately.

If you have any questions about Harp 2.0 please feel free to email or call our office and we will be happy to explain it to you further.

Top 3 Reasons You Need A Real Estate Lawyer For Your Real Estate Transaction

Our firm handles real estate closings. We’ve been doing them now for over ten years. A real estate closing is the final step of a negotiated contract to transfer real property from the seller to the buyer. With that in mind, we are frequently asked, “do I need a lawyer for my real estate transaction?” The answer to that question is no, you don’t need a lawyer. But you should have a lawyer, on your side, representing you, and looking out for your best interests. Having a lawyer is important because the lawyer will typically have the experience and the knowledge necessary to properly navigate your real estate transaction. With that said, here are the top 3 reasons you need a real estate lawyer for your real estate transaction.

1) OBSTACLES

You may run into obstacles that could bring your real estate transaction to a halt. Having the right professional will help to ease those tense situations, and work through those obstacles. On the other hand, you can certainly try and do it all yourself. But in this world, we should probably stick to what we know and do best. Still, if you are set on performing a transaction without a lawyer, we would suggest at least talking to some real estate lawyers and getting their opinion on your real estate transaction. Even if it is for a quick five-minute meeting.

2) COSTS

You may think the cost involved in hiring a professional is too high. You may also think that by hiring an expert that there is an extra layer of hassle on top of the added costs. And all of that may be true. But making decisions by trying to save some money in the short run may end up costing you a lot of money in the long run. Plus, the hassle and aggravation will grow too. You are better off hiring a real estate professional early to deal with all the issues in advance before the they grow into larger and more expenses problems for you. Here are some additional tips to save money on closing costs.

3) PEACE OF MIND

By hiring a real estate attorney you are buying peace of mind. You’re buying a solution. You’re buying yourself the safest and smoothest possible transaction and solutions to problems that arise.

The importance of hiring the right professional cannot be overstated.

In a real estate transaction, you should have a lawyer to represent your interests.

If you have any questions about your transaction, then please feel free to contact us.

We’re here to help.

Buyer Beware: How Home Buyers Can Avoid Buying a Liability

Home hunting is often very frustrating. This true horror story of home buyers suing their real estate agent for $2 million after discovering that their home was infested with snakes is a cautionary reminder that all home buyers should take the necessary precautions to ensure that they too are not buying a home infested with snakes, or worse. So buyer beware. This blog post is intended to educate home buyers and help home buyers avoid buying a liability.

Know Your Contract. Too often a property is listed for sale “as is.” You should understand exactly what is meant by the “as is” nature of the transaction. As will be discussed below, if you are buying an “as is” property, then it is important to conduct the necessary due diligence at the property to ensure that it is structurally sound and safe before you actually buy it.

Know Your Lender’s Requirements. Some lenders are very strict. They won’t lend you money to buy the property if the property has problems. For instance, if the property has a leaky roof, or radon gas, then your lender may require you to correct those issues before you can buy the property.

Know Your Property and Seller. In this day and age just about everything is on line. So use the internet to find out as much information about both your seller and the property itself. For instance, if the property recently had an 800-foot addition added, then check the county records on line to confirm that the addition was built with the appropriate permits.

Know the Seller’s Disclosures. The seller’s disclosures are intended to inform the buyers of known defects with the property. This is often known as a “latent defect.” But what happens if a defect was either not known to the seller or the seller failed to disclose a known defect to the buyer? The answer to this question is often buried in the fine print of your real estate sales contract. And the answer to this important question is something the buyer should find out prior to completing the real estate purchase.

Get a Home Inspection. A home inspection is a lot like driving a car, only better. A home inspection should reveal every issue/problem that may exist with the property, if any. Home inspections can cost several hundreds of dollars. But that is money well spent as the home inspection may reveal a serious issue that will need to be addressed at a later date. Issues revealed during a home inspection may also be serious enough that a home buyer may actually need to walk away from the transaction.

New Rules for Closing Residential Transactions

New Rules for Closing Residential Transactions

If a buyer of a residential listing applies for a mortgage loan on or after August 1, 2015, new federal regulations will apply to the loan transaction. Generally, these new regulations will apply to all transactions involving a new residential mortgage loan. Cash and commercial transactions, even if a residence is involved, are not affected.

New Forms Replace GFE and HUD-1 Settlement Statement

After August 1, 2015 buyers applying for a mortgage loan will receive a Loan Estimate from the lender instead of the current Good Faith Estimate (GFE). Buyers will generally receive the Loan Estimate three days after applying for their loan.

The other new form, the Closing Disclosure, will include all of the information currently found on the HUD-1 settlement statement (HUD-1); it will also include an additional three pages of financial disclosures currently found on other forms. The traditional HUD-1 information will be found on pages two and three of the new five-page Closing Disclosure. However, the Closing Disclosure does not use the same familiar categories found on the HUD-1 and some costs are in a different area. For example, your real estate commission and any related charges for your services will be located in Section H labeled “Other” at the bottom of page two of the new form.

Lender Will Prepare Closing Disclosure

While the new rule allows a lender to authorize a settlement agent to prepare the new form, for a variety of reasons you should expect that the lender will prepare this new five-page form. This is a brand new challenge for lenders because most of the information currently found on the HUD-1 is gathered by the settlement agent. For example, your commission, association assessments, home warranties, inspection fees, etc.

Settlement agents will continue to be responsible for gathering this information and providing it to the lender. They will need to provide exact information about services and charges to the lender in a timely fashion. Therefore, you will need to communicate your information to the settlement agent much, much earlier than day of closing, perhaps two weeks before the scheduled closing date! Why? Read on. Continue reading “New Rules for Closing Residential Transactions”

Zombie Foreclosures are Creating Mishaps for Real Estate Purchasers throughout South Florida

Zombie foreclosures are creating mishaps for real estate purchasers throughout South Florida. Ground zero for the residential real estate collapse was right here in South Florida. So it should come as no surprise that problems continue to persist with foreclosures of so many of those homes.

What is a zombie foreclosure? As the name implies, a zombie foreclosure involves vacant property. It involves property that is being foreclosed where the homeowner vacated the property. But for various different reasons, the foreclosure just continues and never ends despite the fact that the property is vacant.

Abandoned by the homeowner, the home often falls into a state of disrepair. Appliances in the property are often stolen, the landscaping unattended, and the property otherwise becomes unsightly.

Such properties are often ripe for fraud. The fraud could come in the form of squatters unlawfully residing on the property, or efforts made by fraudsters to illegally convey the property that they don’t even own.

But what happens when the homeowner leaves the property in light of the foreclosure but the foreclosure is never completed? This is a new and growing problem that many real estate owners and purchasers are facing today.

In such a situation, and to repeat, the home often falls into a state of disrepair. The grass may be too high, the fence may need repair, or the property taxes may need to get paid. The municipality where the property is located will often cite the homeowners for those violations or impose a tax lien on the property.

Those liens will often need to be satisfied before the home can be sold. And the homeowner may not even be aware of the fact that he may still be responsible for those liens since he “abandoned” the property.

This situation also creates issues for individuals wishing to purchase properties involved in zombie foreclosures. In one recent case, here in South Florida, a real estate purchaser was found to be liable for the liens incurred on the property even though the liens were recorded after the entry of the final judgment, but before the judicial sale.

That court found that liens “recorded between final judgment of foreclosure and judicial sale are valid and enforceable.”

One of the best ways to avoid this situation is to perform a lien search and title search on the property. This will allow you to perform the necessary investigation, and due diligence, on the property prior to your closing. With that said, if you need assistance securing a lien or title search, or other assistance with your real estate purchasing needs, then please do not hesitate to contact us to discuss your situation further.

Accidental Landlords Take Advantage of HARP 2.0 to Re-Finance Their Investment Properties and Save Thousands of Dollars

As we previously discussed, the Harp 2.0 program is a government sponsored program intended to help many struggling homeowners re-finance their homes. An often overlooked aspect of Harp 2.0 is that it is also intended to help accidental landlords re-finance their investment properties and help them save thousands of dollars.

An “accidental landlord” is someone who purchased a new primary residence, but was unable to sell their prior primary residence.

Under this scenario, the initial primary residence is converted into an investment property. In other words, after you purchased your new home you could not sell your old home. As a result, you started renting the old home and became an “accidental landlord.”

The question that is often asked is under this scenario would the “investment” home/property be eligible to re-finance under Harp 2.0?

If the homeowner can qualify to re-finance under Harp 2.0, then there is a good chance that the converted investment property may also qualify. And if it qualifies, then that could potentially save the accidental landlord thousands of dollars over the life of the loan.

There are no doubt obstacles that need to be overcome in order for an accidental landlord to qualify to re-finance under Harp 2.0. But generally speaking, in order to qualify the homeowner must be current on their mortgage, with no late payments exceeding 30 days in the last six months and no more than one late payment in the last year. Under the initial Harp guidelines, loan to value limits were capped at 125%, but Harp was modified (Harp 2.0) to remove those caps and now there are no “underwater” limits. On the other hand, however, the current loan to value ratio must be greater than 80%.

But if you want to take advantage of this program you better hurry. The program is currently set to expire on December 31, 2015.

If you do qualify, the potential savings could be significant. Of course, if you do qualify, and decide that re-financing under Harp 2.0 will save you thousands of dollars, then make sure you follow these seven tips to save money on closing costs. And, of course, don’t hesitate to contact our office to discuss your options further.

Four Tips to Intelligently Make an Offer on a Home

Deciding to purchase a home is one of the biggest financial decisions we will make in our lifetime. We recently discussed five mistakes that all first time home time home buyers should avoid making. But in this post, we will provide four tips to intelligently make an offer on a home.

So when you find a home that you love, and that is within your budget, you want to make sure that your offer is both realistic and good enough to beat other potential buyers trying to buy the same property while also ensuring that you don’t over pay for the property.

Here are five tips that could help you accomplish that objective:

Research. Before you submit an offer on that property you should conduct as much research as possible about the subject property. You should try and find out how long the property has been on the market. Learn about the current market dynamics in that neighborhood in terms of supply and demand for other properties. You should also check the physical condition of the property. In sum, the more information you can obtain about the property and area the better position you will be in to negotiate the sales contract.
Initial Offer. Once you are ready to submit an offer, you should quickly and thoroughly prepare a proposed contract with all of your proposed terms and conditions. It is not enough to simply agree on a sales price, but you should also consider when you want to close as well as ensuring that you will be receiving clear title at the time the transaction is complete.
Negotiate. Remember, your initial offer is just that – a starting point. Therefore, be prepared to receive a counter-offer from the seller. The counter-offer may include many non-financial terms as well as a new proposed sales price. Be prepared to go over both the proposed sales price, and other proposed terms. Also be prepared for these negotiations to go several rounds with the seller.
Home Inspection. It is imperative that before you purchase the home that you schedule a thorough home inspection. An inspection should focus on unsafe conditions or expensive repairs like structural integrity, plumbing, roof condition, electrical maintenance, termites, pests, and more. Moreover, if you have any additional concerns, be sure to discuss them with your inspector so your inspector can inspect same. Once the inspection is complete, your inspector will prepare a report and that report may serve as the basis to re-open negotiations with the seller.

Once you have completed this process, it will be time to complete your transaction and become a home owner. Here are seven tips to save you money on closing costs.

Nonetheless, if you follow the above process you will no doubt help yourself get the best possible deal on your home purchase.

Many South Florida Homeowners are Finally Able to Sell their Homes – For a Profit

Home prices are on the rise in South Florida. And this is comforting news for many South Florida homeowners that were hit hard during the Great Recession.

Today, many South Florida homeowners are finally able to sell their homes – for a profit. With the housing market slowly making a comeback homeowners are seeing their property begin to produce equity again. Indeed, according to a recent report, South Florida saw an 11% increase in price gains from a year earlier. That means that many home owners that are selling their property are even realizing a profit from the sale. There are less short sales today, and more traditional sales where homeowners are in fact making money from the sale.

In today’s market, the “for sale” sign seems to be making a comeback. If you take a drive through many South Florida neighborhoods you will notice an increase in “For Sale” signs. That is the case because many homeowners are now in a position to sell their home and make a profit.

Part of the reason for this improved market is that supply and demand are starting to even out more than they have in the last year or so. For instance, less foreclosures are also helping the real estate market. So far this year, there have been 6,574 foreclosures filings in Miami-Dade County. At the same time last year, there were 12,720 foreclosure filings. So foreclosure activities in Miami-Dade County have decreased by close to 50%.

The decrease in the foreclosure rate is only helping the real estate market as a whole rebound. Home prices are also rising faster than the rate of inflation. And many homeowners are taking advantage of those prices to sell their homes for a profit.

But with more properties coming to the market, buyers now finally have more options. But many of the homes coming to the market today are million dollar plus home listings.

If you are considering purchasing a property, and you are a first time buyer, then you should avoid making these mistakes even as the market continues to improve. Moreover, and as you consider buying property, please make sure you understand that you could potentially save money in closing costs by following these tips. Please do not hesitate to contact us should you wish to discuss your real estate transaction with our firm.

Five Mistakes All First Time Home Buyers Should Avoid Making

Buying a home for the first time is exciting. While home hunting it may be easy to get blinded by the size of the swimming pool, or the spacious open layout, or the amazing backsplash on the kitchen walls to go with those new granite and quartz counter tops and hard wood floors. When one falls in love for such a property they will often make mistakes that will regret at a later date.

With that said, here are five mistakes all first time home buyers should avoid making.

Overspending. Know your budget. Know your financial limits. You should meet with a lender to determine what your financial limits will be and then secure a pre-approval for an amount that you can afford. You should only start searching for a home once you know how much you can afford. And you should try to stay within your financial parameters.
Don’t Assume You Will Be Making More Money. One of the lessons we all learned from the Great Recession is that many people, and lenders, believed that individuals would be making significantly more money in years to come. Don’t make such assumptions. During the Great Recession many individuals actually lost their jobs and then their homes because such assumptions were made. So if you’re about to graduate from medical school, don’t assume that you will be making significantly more money in a few years even if your career path is a bright one.
Failing to Account for your Closing Costs. We recently discussed, in detail, seven tips that could save you money on your closing costs. In sum, don’t underestimate the impact the closing costs may have on your transaction. You may have to pay such items as homeowners insurance, property taxes, and depending on the size of your down payment, private mortgage insurance (PMI). But that is not all. You will also have to pay various third party vendors to perform necessary tasks to complete your transactions. For instance, you will likely have to pay for a home inspection, survey, title insurance, attorney fees etc. Therefore, make sure you have an understanding of what your closing cost obligations will be prior to completing your real estate transaction. Feel free to contact us today to discuss closing costs associated with your transaction in greater detail.
Failing to Protect Yourself. Understand the fine print in the contract. The sales contract is typically several pages for a reason. Home inspections, for instance, could reveal some significant problems with the home. But many first time home buyers don’t understand the significance associated with such clauses and may perform such inspections outside of the agreed upon time period set forth in the contract. The same holds true with finance contingency clauses. If a buyer fails to qualify for financing, but also failed to adhere to the strict terms of the financing contingency provision in the contract, then their deposit may be end up in jeopardy. Don’t put your deposit in jeopardy. Understand your contract and ensure that all timelines are complied with or ensure that you secure the appropriate extension on such deadlines.
Failing to be Realistic. Some first time home buyers are simply too optimistic and will purchase a property that has substantial problems because they love the color of the front door. Many first time home buyers will purchase a home in the wrong part of town thinking they can fix the problems with the home, but forgetting that they can’t correct the problems in the neighborhood. Yet other first time home buyers may simply be too difficult. They may submit low ball offers and then get frustrated when ever such offer is rejected. Make sure you’re realistic with your expectations.