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The Use of a Power of Attorney During a Real Estate Transaction

We get a lot of questions regarding the use of a power of attorney during a real estate transaction. We often get a phone call saying, “Hey, I’m not going to be in town that day, can somebody else sign the documents for me to sell my house?”  The answer, like a lot of answers in our business, is yes and no.

Very technically, you could provide a power of attorney to another individual that you trust to sign documents to effectuate your transaction. Now, that may not make people on the other side of the transaction or other parties in the transaction happy.

For example, title insurance underwriters typically do not like the seller to delegate the authority to sign the deed to a non-party. They typically say, “Well if the seller has to sign four documents, we are ok with the power of the attorney signing documents 1,2, and 3; but we would rather have the seller sign the deed.”  Now, that’s not a requirement or a strict obligation.  But sometimes the underwriter will give the title agent or the closer a little bit of a hard time.

So our advice on closing transactions via power of attorney is:

  1. Be very careful that you trust the person you are going to give the authority to.
  1. Make that decision or ask the questions about that with enough time to allow your Lawyer or Realtor, or your closing professional, with sufficient time to react to that request, prepare the appropriate documents, and get all the required approvals, so that is not an impediment to a smooth closing.

The bottom line is one may be able to use a power of attorney during a real estate closing.  However, the power of attorney should be prepared carefully and with ample time.

If you need any help with your real estate transaction, please give us a call as we are happy to help.

How To Have a Smooth Real Estate Closing

Young woman is signing financial contract with male realtor. Close-up.

Today we are going to talk about how to have a smooth real estate closing.  We want to try and help make your real estate transaction that much more convenient when it comes time to close.

The closing process can be a nightmare with all the paperwork involved and tasks to work through. As everybody knows, we’re all busy, we’re all short on time and it can be a very time consuming process to take time out of our work day to travel to either your real estate lawyers office or the title company’s office to finalize and close your real estate transaction. This causes unneeded stress and can even cause delays in the finalizing of your real estate transaction. That is a headache for all parties involved.

Closing and finalizing on your real estate transaction doesn’t have to be a nightmare though. Alvarez Barbara, LLP, is happy to provide convenience at the closing table.

We will perform a mail away closing. We will send a mobile closer to you.

We will work around your busy schedule to make sure the execution of documents necessary to effectuate your real estate transaction is not something that is going to take you the whole day and require that you drive across town to complete.

We believe in streamlining the closing process for you. That way there there are no delays in your transaction.  And all the parties can leave the closing table happy, satisfied and without headaches.

We’ll come to you and do everything we can to make your real estate transaction move as smoothly as possible. We’ll help you make it that much better of a day.

If you have questions about your real estate deal, feel free to give us a call or email us.  We’re here to help.

Buyers Beware of Buying Foreclosures

homestead exemptionForeclosures 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.

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

Real Estate TransactionOur 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.

  1. 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.
  1. 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.
  1. 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.
  1. 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.
  1. 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.

Rare Display of Congressional Bipartisanship Results in the Unanimous Passing of the Housing Opportunity Through Modernization Act Making it Easier to Buy and Sell Condominiums in South Florida

New Rules

New Rules

Congress’s approval ratings are currently at all-time lows.  The bickering between the political parties on Capital Hill is at an all-time high.  A majority of Americans are greatly unsatisfied with the choices their respective political parties have given them for President.

Yet in this toxic political climate it gives us all hope to see our elected officials work together to bring about some much needed help in our real estate market.  Indeed, the rare display of congressional bipartisanship resulted in the Unanimous Passage of the Housing Opportunity Through Modernization Act making it easier to buy and sell condominiums in South Florida.

The legislation was backed by several realtor groups.  They supported the legislation because the Housing Opportunity Through Modernization Act seeks to streamline and improve three specific areas of federal housing policy.

Those three areas include the following:

First, the U.S. Department of Housing & Urban Development’s (HUD) rental assistance and public housing programs.

Second, the Federal Housing Administration’s (FHA) requirements for condominium mortgage insurance.

Third, the Department of Agriculture’s single-family housing guaranteed loan program.

The Obama Administration has not publicly commented on whether the President would sign or veto the legislation.  But given the overwhelming bipartisan support in unanimously passing this legislation it would be surprising if President Obama vetoed this act.

Of significance to the local South Florida real estate market are changes in the act that will help with the sale of condominiums.  South Florida has a high inventory of condominiums.  Condominiums often represent an affordable housing option that makes sense for many first-time and low-to-moderate income homebuyers in South Florida.

But the sale of those condominiums are often bogged down due to some unnecessary and burdensome rules and regulations imposed on condominiums.   This legislation addresses those restrictions head on, putting the dream of homeownership back in reach for more first time home buyers and low to moderate income homebuyers in South Florida.

Among other things, the Housing Opportunity Through Modernization Act seeks to make the sale of condominiums less burdensome.

For instance, the legislation includes revisions to make FHA’s recertification process substantially less burdensome.  It does so by lowering FHA’s current owner-occupancy requirement from 50% to 35%. The legislation also mandates that the FHA replace existing policy on transfer fees with the less-restrictive model already in place at the Federal Housing Finance Agency.

New Rules for Closing Residential Transactions

re closingNew 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. (more…)

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

zombie foreclosuresZombie 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.

Four Tips to Intelligently Make an Offer on a Home

a real estate closingDeciding 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:

  1. 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.
  2. 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.
  3. 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.
  4. 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

For sale signHome 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.