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Ways to Hold Title to Real Estate

he manner in which you acquire title has a bearing on legal ownership and on transfer in the event of death. Some types of title carry tax consequences. You should talk with a lawyer to find out your state laws and how holding title will affect you. Some states restrict the way parties may hold title, so all of these choices may not be available to you.

Sole and Separate.

If the home is in the name of one party and the other is not on title, the unnamed party may lose a voice in the say and control of the property, and possess no right to share future profits. Married couples who want to own real estate separately in some states must record a quitclaim deed from one spouse to the other.

Sometimes only one party of the two or more purchasers can qualify for the mortgage. It that event, it is common to add the omitted individual(s) by recording a quitclaim deed after closing. However, always seek legal advice because the loan may contain an alienation clause.

Joint Tenants with Right of Survivorship.

Each person owns an equal share and if one party dies, title transfers to the survivor, regardless of what a will may specify.

Joint tenancy requires four unities:

* Time. Each owner must receive title at the same time.

* Title. Each owner must receive title on the same deed or document evidencing title.

* Interest. Each owner receives the same proportionate and equal share of ownership.

* Possession. Each owner has the identical right of possession.

If one of the joint tenants sells or conveys the interest created in a joint tenancy to another person, the joint tenancy is broken, and a tenancy in common is created. Joint tenants cannot stop another tenant from breaking the joint tenancy.

Tenancy in Common.

Tenants in common share possession equally but may own equal or unequal shares of the home. If one party dies, unless the surviving party is named in the will, the decedent’s interest passes to heirs.

Tenants in common share one unity. The right of possession. All tenants in common have the right to occupy the property, and neither party can exclude the other.

Community Property.

In CA, for example, only married individuals may hold title as community property. Upon death, half ownership transfers to the decedent’s heirs.

In community property states, if a married person acquires title sole and separate, it is still possible for the omitted spouse to acquire a community interest in the property, even though that name is not on title. This event is typically caused by co-mingling funds.

Community Property With Right of Survivorship.

If one person dies, title transfers to the survivor, but during ownership, both signatures are required to encumber or sell the home.

This type of title does not allow either party to pass respective ownership to an heir.

Trust.

Some people establish trusts and transfer title to the trust to reduce taxes on the estate in the event of death. An estate planning attorney can set up a trust that is recognized by the I.R.S.

This type of trust should not be confused with an Offshore Foreign Trust, which unscrupulous financial planners peddle as a way to avoid paying taxes to the I.R.S.

Corporation or Partnership.

The legal entity owns the property, not the individual owners, and can result in tax consequences that may not be as favorable as some imagine. For example, corporations can be subject to double taxation (taxing the corporation and again taxing the shareholders). An S corporation avoids double taxation and is exempt from certain federal taxes. Always seek tax advice before forming a corporation or partnership.

Limited partnerships are managed by the general partner(s). The limited partners are not responsible for the debts of the partnership; typically the most a limited partner could lose is the limited partner’s investment.

Tallahassee Buyer’s Broker Agreements & Tallahassee Buyer’s Broker Contracts

Tallahassee home buyers typically sign buyer broker agreements with their real estate brokers / agents before writing a purchase agreement. The buyer broker agreements spell out precisely who represents the buyer. It’s also known as buyer representation. There are a huge variety of buyer broker agreements used throughout the United States. For simplicity, I will review the three most common types of agreements used in California, with most weight given to Exclusive Right to Represent because it’s the preferred form.

The following information is a general overview. It is not a legal interpretation of Tallahassee Buyer Broker Agreements. I cannot give legal advice. If you desire legal advice, please consult a real estate lawyer.

Tallahassee Buyer Broker Agreement (Non-Exclusive / Not for Compensation)

This agreement outlines the broker’s / agent’s duties and obligations to the buyer, agency relationships, broker scope of duty and buyer obligations; it does not provide for compensation.

* Buyer may hire more than one broker / agent to locate property

* Buyer is not obligated to compensate the broker / agent

* Buyer has the right to demand single agency

Buyer Broker Agreement – Non-Exclusive, Right to Represent

The non-exclusive agreement outlines the broker’s / agent’s duties and obligations to the buyer, agency relationships, broker scope of duty and buyer obligations; however, it does provide for compensation. It also removes the buyer’s responsibility to pay a commission if the broker / agent is paid by another party such as the seller.

* Buyer may purchase a property through another broker / agent, as long as the property is not a home introduced by the first broker

* Buyer has the right to demand single agency

* The broker / agent can receive a higher commission than the negotiable fee stated in the agreement if the seller elects to pay more and it is disclosed

Tallahassee Buyer Broker Agreement – Exclusive Right to Represent

This is the form that I use with my buyers. It is similar in scope to the non-exclusive form except for one major distinction: the buyer has agreed to work exclusively with the broker / agent.

* The Tallahassee buyer cannot hire more than one broker / agent to represent her

* The commission is negotiable

* Buyer has the right to demand single agency

* The buyer is not responsible for the commission if another party (such as the seller) pays it

* The broker / agent can receive a higher commission than the negotiable fee stated in the agreement if the seller elects to pay more and it is disclosed

While non-exclusive agreement terms may run for a month or two, exclusive agreement terms are typically anywhere from three months to one year. If the buyer elects to subsequently purchase any property introduced to her by the agent, she will owe the agency a commission. Exclusive representation gives the broker / agent the ability to negotiate with unrepresented sellers (such as for sale by owners) on the buyer’s behalf. In these instances, the commission is often added to the sale price and then paid by the buyer to the broker as part of the financing. If the buyer is able to purchase the property at a substantial discount through the power of the broker’s / agent’s negotiating ability, the broker / agent will have more than earned her fee. Exclusive representation means the broker / agent is employed by the buyer and will work diligently on the buyer’s behalf.

Termination

Ask the Tallahassee broker / agent if she will release you from the contract if you find that the relationship is not a good fit for you or vice versa. While agents are not bound to release you, if they won’t agree to this upfront, don’t sign the agreement with them. Professionals give personal guarantees that the customer will be satisfied. If an agent can’t give you that guarantee, the agent does not deserve your business.

Dealing with Seller’s Remorse

Just like buyers who get cold feet, sellers can also feel remorse, have second thoughts. Seller’s remorse often happens because the seller was not really motivated in the first place. Sometimes sellers think they want to sell, but they don’t really have good reasons to sell.

What is Seller’s Remorse?

Sometimes sellers want to “test” the market, to see how much a buyer will offer, to figure out if a home is priced right. That is a wasted effort and pointless.

Real estate agents spend money to advertise and market. Agents receive no return on that investment and earn no money when sellers are not serious about selling.

Seller’s remorse means the seller has decided it was a mistake to list a home for sale and no longer has a desire to sell. A seller of a Victorian fourplex in Sacramento decided to put his home on the market because he felt the market was declining. He thought if he waited a few more years, the value would fall so low that he would lose his opportunity to make a reasonable profit.

After his Realtor brought him an offer, he panicked. He came to the conclusion at midnight that he could not part with his home of 16 years at any price. Suddenly, the reality of the situation hit him. It was all fun and games when buyers came through to tour. But when the time came to sign on the dotted line, the seller froze. It’s a common reaction when a seller is not truly motivated.

How to Prevent Seller’s Remorse

Owners can prevent seller’s remorse by thinking through the entire process and having a plan — a relocation goal — including strong reasons for selling.

* A real estate agent can help a seller plan for the future and walk the seller through options. Discuss wants and needs with your agent.

* Draw up a Ben Franklin list, sorted by benefits and drawbacks to selling. If the benefits outweigh the drawbacks, then you should sell. If the drawbacks exceed the benefits, don’t put your home on the market.

* If a seller is worried about not being able to find a suitable replacement home, the seller can sell on a contingent contract. Contingent contracts give the seller a period of time to locate another home without an obligation to sell to the buyer if that home is not found.

How a Seller Can Cancel a Listing

* A listing agreement is a binding contract between the seller and real estate broker.

* Exclusive right-to-sell listings are the most common and entitle the broker to a commission if a ready, willing and able buyer makes a full-price purchase offer.

* Sellers who get cold feet can cancel the listing but may end up owing the broker a commission if the broker performed.

* Do not sign a six-month listing agreement if the agent will not agree to cancel the agreement at your request. Ask about the length of the listing and if you can shorten the term.

* Many real estate agents enjoy a good reputation in the community and would be willing to cancel a listing, but you should ask about it before you sign a listing.

* Before you fire your agent, talk to the agent, the agent’s broker and your real estate lawyer.

What Happens if a Seller Gets Cold Feet at Closing?

* Although there have been a few court cases that have ruled against the seller, generally the court will not make a seller sell.

* However, buyers often retain the right to pursue damages and sue the seller.

* Moreover, the brokers will have likely earned a commission and be entitled to demand that payment.

Tallahassee Home Inspection Checklist

Tallahassee home buyers have it drilled into their heads that they need to get a home inspection. In California, for example, Tallahasseereal estate agents advise home buyers to do a home inspection 15 ways from Sunday. Our purchase contracts contain two pages that talk about doing a home inspection, and those two pages are repeated in the buyer’s broker agreement. That’s just for starters.

A home buyer does not close escrow without hearing about the need for a home inspection. But what does a home inspection report disclose? Home buyers are often clueless about home construction and its components, and have difficulty deciphering home inspection reports. Many don’t know how to figure out which types of defects are serious or whether their home inspector checked all the essentials. But, by George, they got that home inspection!

Tallahassee Home Inspection Checklist Comparisons

All Tallahassee home inspections are different and can vary dramatically from state to state, as well as across counties and cities. Much depends on the home inspector and which association, if any, to which the home inspector belongs. Because I am most familiar with home inspections conducted in accordance with the standards of practice established by the National Association of Certified Home Inspectors, the following information is based on NACHI guidelines.

Home Inspection Checklist of Items Not Inspected

Understand that California home inspectors are not licensed, nor are they licensed in many states. However, a home inspector’s standard practice typically does not include the following, for which a specific license to inspect and identify is required:

* Asbestos

* Radon, Methane, Radiation and Formaldehyde

* Wood-Destroying Organisms

* Mold, Mildew and Fungi

* Rodents

* Lead

General Home Inspection Checklist Items

* Structural Elements.

Construction of walls, ceilings, floors, roof and foundation.

* Exterior Evaluation.

Wall covering, landscaping, grading, elevation, drainage, driveways, fences, sidewalks, fascia, trim, doors, windows, lights and exterior receptacles.

* Roof and Attic.

Framing, ventilation, type of roof construction, flashing and gutters. It does not include a guarantee of roof condition nor a roof certification.

* Plumbing.

Identification of pipe materials used for potable, drain, waste and vent pipes. including condition. Toilets, showers, sinks, faucets and traps. It does not include a sewer inspection.

* Systems and Components.

Water heaters, furnaces, air conditioning, duct work, chimney, fireplace and sprinklers.

* Electrical.

Main panel, circuit breakers, types of wiring, grounding, exhaust fans, receptacles, ceiling fans and light fixtures.

* Appliances.

Dishwasher, range and oven, built-in microwaves, garbage disposal and, yes, even smoke detectors.

* Garage.

Slab, walls, ceiling, vents, entry, firewall, garage door, openers, lights, receptacles, exterior, windows and roof.

Home Inspection Checklist Items Needing Service

Home inspection reports do not describe the condition of every component if it’s in excellent shape, but should note every item that is defective or needing service. The serious problems are:

* Health and safety issues

* Roofs with a short life expectancy

* Furnace / A/C malfunctions

* Foundation deficiencies

* Moisture / drainage issues

Home Inspection Checklist Items Sellers Should Fix

If you have a choice, it is smarter to hire your own contractors and supervise repairs. Before issuing a formal request to repair, consider the seller’s incentive to hire the cheapest contractor and to replace appliances with the least expensive brands.

Although home inspectors are reluctant to and, in many cases, refuse to disclose repair costs, call a contractor to determine the scope and expense to fix minor problems yourself. No home is perfect. Every home will have issues on a home inspection. Even new homes.

A repair issue that will be be a deal breaker for a first-time home buyer, causing the buyer to cancel the contract, will not faze a home buyer versed in home repair. Talk to your agent, family, friends and call a few contractors to discuss which types of defects are minor. Perhaps a simple solution is available such as replacing a $1.99 receptacle, which can resolve many outlet problems.

Pat yourself on the back, too, for getting a home inspection. Some buyers feel a home inspection is unnecessary, especially if they are buying new construction. If a light switch doesn’t work or the air conditioner blows out hot air, those are problems you can see and test. The problems that aren’t readily identifiable to you such as code violations, a furnace that leaks carbon monoxide or a failing chimney, are the types of defects a home inspector could identify in a new home. Builders’ contractors make mistakes, too.

Brand New Homes – Buying New Construction from a Tallahassee Builder

New Tallahassee home buyers don’t want a used house when only new will do. They don’t want to inherit somebody else’s worn carpeting, personal taste in kitchen appliances or look at some kid’s initials scrawled into once-wet cement that they didn’t put there. The home must be brand spankin’ new, fresh and clean without so much as a finger print on the walls.

If this describes you, and you have always fantasized about buying a brand new home of your dreams, here are a few tips that can help you to protect yourself — to make the process a pleasant experience.

Hire Your Own Agent

* The builder’s sales agents are paid to represent the builder, regardless of what they may tell you. Many will use high pressure tactics to persuade you to sign the contract. Due to the high volume nature of brand new home sales, lots of builder’s agents are paid less than a traditional commission; some earn a salary plus incentives, so turnover is important to their livelihood.

* Hire a Buyer’s Agent to represent you. Most of the time, your agent will be paid by the seller, but sometimes the responsibility for the agent’s fee is open for discussion. Even if you have to directly pay your agent, you can probably add that fee to the sales price, and it would be worth it because a good negotiating buyer’s agent can save you thousands more than the commission.

* Your own agent will represent you, be your fiduciary and is required to disclose the positives as well as the negatives about the transaction. Builder’s agents don’t discuss drawbacks.

* If your contract contains a contingency to sell your existing home before buying, again, hire your own seller’s agent to list your home. Be aware that buying before selling is not always in your best interest because hard bargaining goes out the window when you’ve emotionally moved out of your home.

Don’t Automatically Use the Builder’s Lender

* Builders often prefer their own lender because the builder will be kept fully informed of your personal progress; it’s one-stop shopping for a builder. But a builder’s lender might not offer you the best deal. Moreover, the builder may own the lending company.

* Consider alternate sources to find a lender. Your own bank or credit union might offer you very attractive rates and terms, based on your banking history with that institution. Your agent may refer you to his or her private list of wholesale lenders.

* Shop around and interview your lender. Find a banker or mortgage broker whom you can trust and with whom you feel comfortable doing business.

* Ask to see a copy of your credit report and FICO scores. You can order your own free credit report before shopping for a new home.

* Insist that your lender guarantee its Good Faith Estimate. If the lender balks or makes excuses, go elsewhere, because reputable lenders will honor that request, even though it’s not required by law.

Obtain Legal Advice Before Buying a Brand New Home

* Before you sign a purchase contract, talk to a real estate lawyer. Standard purchase agreements are designed to keep everybody out of court, but they don’t necessarily contain language that protects the buyer.

* Ask questions about removal of contingencies and your cancellation rights. Make sure you understand your liability and commitments.

* Find out if the materials used by the builder contain chemicals that are hazardous to your health. If your contract contains a warning about health issues, it’s probably because it’s a valid concern and other buyers have gone to court over it.

Verify Option and Upgrade Pricing

* Determine which options and upgrades you want. Bear in mind that for many builders, the profit margin is highest in upgrades. Some builders can sell a home for almost bare construction cost because they make the bulk of their profit in the upgrades.

* Find out whether your lender will lend on all the options / upgrades you have chosen. If your lender will not finance 100% of your selections, you will be required to pay for it in cash.

* Ask about cancellations and whether you will be held liable for items the builder cannot return to a vendor.

* Some contracts give the builder the right to choose your upgrades if you do not submit your request within a certain period of time.

* To save money, consider which upgrades you could purchase and install yourself after the escrow closes. However, realize that some upgrades such as CAT-V, DSS or security wiring inside the walls are easier to do before construction.

Check Out the Builder’s Reputation

* If a buyer has a bad experience with a builder, the word spreads rapidly throughout a community. But you won’t know if a bad rep is an isolated experience or if the builder repeatedly brings bad publicity to itself without checking and verifying the public records for lawsuits.

* Talk to the neighbors and scrutinize the construction quality of surrounding homes. Is the builder consistently building identical or larger homes in the area or is construction lagging and homes shrinking in size?

* Find out whether the builder sells to investors. Some builders require all their homes to be owner occupied. Others eagerly sell as much inventory to investors as profit margins will allow. If the market suddenly dips, investors are typically the first to bail and, besides, part of the reason you are buying in a new subdivision is to be surrounded by other buyers just like you, not tenants.

Hire a Home Inspector

* Always, always, always get a home inspection when you buy. And hire a licensed and accredited individual to perform the inspection — not your dad or your buddy contractor, get a real inspector. Be there for the inspection and ask questions because a new home can contain defects. The HVAC system might be too small or the plumbing could be installed backwards. Construction workers make mistakes. (And let’s not even talk about the mustard-stained McDonald’s wrappers stuffed in wall cavities.)

* If the inspector calls for further inspection by another professional contractor, find out if the inspector is telling you there could be a serious issue or if the inspector isn’t licensed to address that issue.

How to Sell a Tallahassee House that Didn’t Sell

Why Most Tallahassee Homes Listed for Sale Don’t Sell and What to Do About It

If your home has just come off the market and hasn’t sold, don’t be discouraged. The reason your home did not sell may have nothing to do with your home or the market. In reality, your home may have been one of the more desirable properties for sale.

So Why Didn’t Your Home Sell?

Last year almost half of the homes listed for sale never sold at all, and many sellers found that there was a tremendous amount a homeowner needed to be educated on to sell their home for top dollar in the shortest time period.

Don’t risk making the wrong choices and losing both time and money on your investment . Before you hire a real estate agent, know the right questions to ask to save you time and money.

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