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Owner’s and Lender’s Title Insurance

Owner’s and Lender’s Title Insurance

Lender’s Policy – If you have ever taken out a mortgage on your home it is likely that the lender required you to purchase a title insurance policy. Then lender’s policy is also known as a loan policy and most lending institutions require it as a way to insure their security interest in the property. The policy protects the lender for as long as the loan is outstanding.

Owner’s Policy – As a buyer, you also want to protect your investment and your ownership rights in your property. That is why you should purchase an owner’s policy of title insurance.  This will protect your rights as the homeowner for as long as you or your heirs have an interest in the property.

Both of these title insurance policies pay valid claims along with the legal fees to defend against hidden title issues. They also help to decrease ownership risks by providing a thorough title search prior to the issuance of either policy.

Refinance Transactions – If you are refinancing your property you may be surprised to see that you are required to purchase a new lender’s policy of title insurance. This is because a lender’s policy only provides coverage for the life of a loan. When a home is refinanced that previous loan is paid off and the policy ends. Therefore, a new lender’s policy will be required. Because your owner’s policy provides coverage for as long as you own your home and additionally to your heirs, there is no need to purchase a new owner’s policy when refinancing

Tenancy in New Hampshire

Tenancy in New Hampshire

New Hampshire has two types of tenancy, Tenants in Common and Joint Tenants with Rights of Survivorship (JTWROS). This has been the law in New Hampshire since November 13, 1959.

Every conveyance of real estate to two or more persons creates a tenancy in common pursuant to New Hampshire RSA 477:18. That means, that if the person preparing your deed fails to state the type of tenancy, you will automatically become tenants in common. When one person dies their half of the property will pass to their estate according to the probate process.

If you want to have your property pass to the surviving person that must be specifically stated. Your deed must state after your names “as joint tenants with rights of survivorship”. The property automatically passes to the surviving joint tenant without the need of filing probate. You simply record the death certificate and in future deeds reference the death and state that you are the surviving joint tenant.

The failure to state tenancy, or stating it incorrectly, happens quite often, especially when the deed has been prepared by an out of state attorney who may not be familiar with our laws. Different states have different types of tenancy laws. We sometimes see a husband and wife owning property and thinking they owned it as joint tenants with rights of survivorship. One spouse dies and it is not until the other gets ready to sell the property that this is discovered. It can create quite a mess, take a while to clear up and ultimately delay the closing.

So use this information to take a look at your deed and be sure that you own your property the way you wanted. If you don’t, you can have a Quitclaim Deed prepared and record it to establish the proper tenancy that you want. Please give us a call at 603-836-5309 if we can assist you in this process.

Assessment Versus Market Value

Assessment Versus Market Value

In an update year, assessments as of April 1st should be fairly representative of market value. Because sales are based on emotional likes and dislikes of buyers, there is no one right number, but rather a range of numbers depending on the negations and motivations of the buyers and seller involved in a transaction. The industry standard indicates that plus or minus 10% is reasonable because an opinion of value is subjective and will vary by this amount.

When there is a decline in the real estate market, taxpayers may see that their assessment is higher than what they could expect to sell their property for (market value). That does not invalidate the towns assessment of your property when they account for the local assessment to sales ratio because every year the New Hampshire Department of Revenue Administration (DRA) calculates an equalization ratio. This ratio represents the difference between the assessment and the market transactions (sales). Here is an example:

In the town where you live in New Hampshire, the DRA published the an equalization ratio of 1.15% as of 4/1/2017. The assessment on your home is currently $300,000. Homes similar to yours are currently selling for $250,000. You may think that you are being over assessed, but this is where the equalization ratio comes into play.

To determine the market value of your home you would take the assessment of $300,000 and divide it by the ratio of 1.15% which gives you an indicated market value of $260,870. Although this number may be higher than the $250,000 sale price, it is considered fair and equitable so long as it falls within the 10% allowance.

 So long as all properties are being assesses similarly, the assessments, even if they are higher than current market value are fair and equitable because everyone is being treated the same. The real estate market is constantly fluctuating which makes comparisons of assessment and sales very difficult. The Form PA-34 that you complete at closing is one of the tools that the DRA uses in determining the equalization ratio.

Warranties on new homes

Warranties on new homes

You are buying your first new home here in New Hampshire and you wonder whether the builder has to offer you a warranty on it. Contrary to popular belief, there is no such thing as a “statutory builder’s warranty” on your new stick built home. A stick built home means it was constructed in whole on site. That said, most builders are proud of their product and they do offer a limited one year warranty to the original owner, They are also subject to building in conformance with and to inspections by the local building department where the home is to be located.

In New Hampshire there are other types of housing that are required to come with a warranty. Presite built housing is described as any structure which is wholly or substantially made or assembled in an off-site manufacturing facility. These homes are required to conform with the United States Department of Housing and Urban Development minimum property standards and local building codes.

A new prefabricated or presite built home is required to have a written manufacturer’s warranty to the buyer. The warranty must include the terms that the home is free from any substantial defects in materials or workmanship in the structure, plumbing, heating, and electrical systems and in all appliances and other equipment installed or included in the home. Additionally, it must state that the seller or manufacturer must take appropriate corrective action at the site of the home in the instance of substantial defects in materials or workmanship which become evident within one year from the date of delivery of the home.

Manufactured housing is described as any structure that is transportable in one or more sections, which in the traveling more are 8 feet or more in width and 40 feet or more in length or when erected on site contains 320 square feet, or more of living area. Manufactured housing is built on a permanent chassis and is designed to be used as a dwelling with or without a permanent foundation and to be connected to utilities.

In order to keep a record of and to verify the proper installation of manufactured homes, no manufactured house may be installed in this state until the manufacturer or an installer licensed by the board has obtained a warranty seal from the New Hampshire Installation Standards Board and attached the seal to the manufactured house.

More information on the above warranty requirements can be found in New Hampshire RSA 205-B and 205-D.

Housing Outlooks for 2017

Housing Outlooks for 2017

Here are eight housing predictions from the experts:

  1. Prices will continue to rise, but more slowly. In 2016, prices rose every month up until October. The prediction is that price increases will hold steady because homebuyer demand is stronger than it was at this time last year.
  2. Affordability will worsen because the share of homes affordable to someone earning the median income is not. This trend will be intensified by a continued shortage of low to moderate priced inventory and rising mortgage rates.
  3. Mortgage rates will be volatile. By historic standards the rates are still low, but may be rising a bit.       For 2017, the Fed’s anticipate there to be three hikes, making it the best time to buy or refinance now.
  4. Credit availability may improve. The president elect and his team have indicated that they hope to roll back much of the post financial regulation which came about as a result of the Dodd-Frank Act. This act regulates the financial market and rolling it back could open up banks to lend more freely to a wide range of would be buyers.
  5. Supply will improve, but remain short. Declining inventory was a defining feature of the housing market in 2016.       This led to prices increasing rapidly and discouraged some would be sellers from entering the buying fray.       There are some signs that the coming year may see a bump in housing supply, at least on the new home front.
  6. More millennials will become homeowners and renters.       According to Zillow, half of all buyers are under the age of 36. Millennials are adults born after 1980 and are not the largest adult generation and make up the greatest percentage of the workforce.
  7. Competition will grow fiercer. In 2017 sellers will maintain the edge over buyers as demand is expected to increase. In 2016, according to Redfin, the typical homes stayed on the market for just 52 days.
  8. Political uncertainty will be replaced with policy uncertainty. The president elects pledge to spend more on infrastructure, to cut taxes and to crack down on immigration could impact the housing market. However, opinions vary widely on this.

 

Information for Homebuyers

Information for Homebuyers

A Buyer normally pays for the following:

Recording the new deed

Their share of the tax stamps. Tax stamps in New Hampshire are 1.5% of the purchase price and are split equally between the buyer and seller

The title examination and closing

The owner’s and lender’s title insurance policy

All costs associated with getting a new loan

A Seller normally pays for the following

Their share of the tax stamps

Any commission to the realtor for the sale of the property

To prepare the Purchase and Sales Agreement when no realtor is involved

Recording any lien release documents pertaining to their loan

For the preparation of the new deed conveying the property

Both parties share in the proration of the real estate taxes and there may be other miscellaneous costs associated with the sale.  Give us a call at 603-836-5309, if we can help with the sale or purchase of your home!

What a Real Estate Attorney can do for a For Sale By Owner Seller

What a Real Estate Attorney can do for a For Sale By Owner Seller

You have decided to sell your own home without the help of a realtor. What are some of the things you should know.

It’s a good idea to hire a real estate attorney to help with the closing phase. They can prepare the Purchase and Sales Agreement and guide you through the process of selling. There is too much at stake to skip this step and your don’t want a legal issue to end up ruining your sale. An attorney will guide you through the paperwork and make sure that you are in compliance with any state laws. They will work to be sure that your transaction proceeds smoothly.

Here are some of the costs you can expect to encounter when selling a New Hampshire property.

It is the Seller’s responsibility to pay for the preparation of the new deed, recording any releases of present mortgages on the property and your share of the tax stamps.

It is the Buyer’s responsibility to pay for the title search and closing, owner’s and/or lender’s title insurance, the cost of recording the new deed and/or mortgage and their share of the tax stamps.

Tax stamps in New Hampshire are calculated on the sales price of the property and are split equally between the Buyer and the Seller. The current rate is 1.5% per thousand, so on a $100,000 sale the total tax stamps due would be $1500.00.

You will also see the proration of real estate taxes and the tax year in New Hampshire runs from April 1st to March 31st of each year. There may also be other miscellaneous fees and prorations.

Please think of us for your closing needs. Your file will be handled start to finish by one person who can guide you in all aspects of the closing process. Give us a call at 603-836-5309.

 

How do we determine that your title is valid?

How do we determine that your title is valid?

The title company makes sure that the title to a property is legitimate, so that a buyer is assured that once he buys property he is the rightful owner. To ensure that the title is valid a title search will be done. This is a thorough examination of property records to make sure that the person or company claiming to own the property does, in fact, legally own the property and that no one else could claim full or partial ownership of the property.

During the title search, the title company also looks for any outstanding mortgages, liens, attachments, judgments or unpaid taxes associated with the property. They also look for any restrictions, easements, leases or other issues that may impact ownership. Before a title company issues title insurance, it will prepare a title commitment for the Lender, which is a summary of what it found during the title search.

What does a Title Company do?

What does a Title Company do?

A title company makes sure that the title to a piece of real estate is legitimate and then issues title insurance for that property.  Title insurance protects the lender and/or owner against lawsuits or claims against the property that result from a dispute over the title.

A title company will maintain an escrow account that contains the funds needed to close on the home and will conduct the closing.  At the closing the settlement agent from the title company will bring all the necessary documentation, explain it to the parties, collect closing costs and distribute monies.  Finally, the title company will ensure that the new deed and other and other documents are filed with the appropriate registry of deeds.

 

Borrowers Underestimate Home Equity

Borrowers Underestimate Home Equity

Research done by Fannie Me shows that although home prices continue to rise, many homeowners and borrowers alike continue to underestimate the amount of equity they have in their homes.  According to a recent Redfin report,  misinformed homeowners and borrowers may be less likely to refinance their mortgages, apply for home equity loans, or even buy new homes because of this.

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