Posts

Buyers’ Counsel Offers Much-Needed Protection For All Buyers

It’s a common misconception that only “rich people” who are involved in high-value real estate transactions need to hire an experienced real estate attorney as buyers’ counsel. After all, there are hundreds of websites online telling you how easy and foolproof it is to do everything yourself, right? In truth, there are a lot of small details that can turn into huge problems as you move forward if you’re not aware of them, or you don’t fully understand what they will mean to your transaction, going forward. Purchasing real estate of any kind, and at any value, is a significant investment, and it’s a wise move to give yourself the best protection possible against avoidable problems.

Get The Answers You Need To Protect Your Own Interests

In any real estate transaction, the lender will have their own attorney, and the seller may, too. The title company/closing attorney is a neutral party, and they’re not allowed to advise either buyer or seller. Hiring buyers’ counsel means that you have a legal advocate to answer your questions about your own interests in the transaction, point out potential issues, and to help you negotiate terms that work for you.

Experienced Help With The Reams Of Paperwork

Real estate transactions involve a daunting amount of paperwork and a dizzying amount of information. Even if you’re an experienced buyer, it’s always a good idea to get a second set of eyes on the details. If you’re a new or less-experienced buyer, you’re going to have questions about the paperwork outlining your rights and responsibilities, and the details of the property you’re buying. For many people, buying real estate is the most substantial investment they’ll ever make, and ensuring that investment is a sound one means going in with a full understanding of everything they’re agreeing to.

Avoid Surprises Like Encumbrances Or Use Restrictions

While the title company will research the property title for liens and encumbrances like easements, they will ultimately issue a title insurance policy that lists those liens or easements as exceptions: Items which will not be covered by your title insurance policy. Your buyers’ counsel will review the title search, and advise you of anything that might affect your financial investment, your planned use of the property, or your enjoyment of that property. In many cases, buyers’ counsel can help you resolve or object to any title issues they find, requiring the Seller to resolve the problems before closing, so you can take ownership with full confidence that you’re not going to get hit with an unwelcome surprise after the deal is done. 

Reassurance on Closing Day

Whether you’re financing your purchase or paying cash, you will have documents to sign on closing day. Your buyers’ counsel will review the closing documents, such as the Deed and Closing Settlement Statement, to confirm all of the information is correct before you get to the closing table. Not only will they ensure the documents are correct, your buyers’ counsel will ensure the closing fees are accurate and discuss vesting options for holding title to the property.

Buyers’ Counsel On Your Side In Kissimmee

If you’re buying property in Kissimmee, St. Cloud, Celebration or the surrounding area, the experienced real estate attorneys at Overstreet Law, P.A. can help you manage the details of your purchase and protect you from pitfalls. Give us a call or contact us online for a consultation, and learn more about how hiring buyers’ counsel protects your investment and your peace of mind.

/by

Why You Shouldn’t Add Someone’s Name To The Property Deed

Sometimes, homeowners want to consider the idea of adding a family member or someone else to the title deed of their property. Often, this notion is based on the idea that making that person an owner of the property now will help make succession easier later on. While that may be true in some cases, there are significant risks and liabilities associated with adding someone’s name to your property deed.

Potential Loss Or Reduction Of Homestead Exemption 

The Florida State Constitution, Article X, Section 4, exempts properly designated homestead property from forced sale under process of any court. This exemption was created to prevent people from losing the homes they live in to creditors and allows homestead property to be transferred to your spouse and/or children free from creditor claims upon your death. If the person you add to the deed for your primary residence does not live there (for example, an adult child), your homestead exemption is reduced by half, because there are now two owners, but only one of them resides in the house. Adding a non-resident to the title weakens your Homestead Exemption protection.

Financing & Tax Issues

 If your home is mortgaged or you’re using a HELOC (Home Equity Line Of Credit), you may discover that it violates the terms of that mortgage or HELOC to transfer interest in the home to another person by adding them to the property deed. Even in cases where the lender allows such a transfer, you may owe money for new documentary stamps. If you later want to sell or refinance the house, you will need signatures from every person named on the property deed. If your co-owners don’t agree to the sale or refinance, you’re either going to be stuck, or facing the prospect of taking them to court. Finally, it is likely that the person you add to the property deed will ultimately pay more income tax when the property is sold after you are deceased because they lose the stepped-up tax basis they would have had if they’d inherited the property through probate or a trust.

Potential Liability

When you add someone to the property deed of your home, the home becomes that person’s asset, in addition to being yours. That means that if your new co-owner files bankruptcy or has a judgment filed against them by a creditor, the house is an asset that can be encumbered by their creditors, despite the fact that it’s your primary residence.

Keep Your Homestead Exemption Protection Intact

The relative simplicity of adding your heir’s name to the property deed for your home may seem appealing, but for most people, it’s not the best solution. The real estate attorneys at Overstreet Law, P.A. can help you find the option that best protects you and your assets now, and eases the cost and hassle of succession for your heir later on. Call us or contact us online for a consultation, and learn more about your options.

/by

What Does A Real Estate Attorney Do?

When you are involved in a residential or commercial real estate transaction in Florida, it’s important to understand what a real estate attorney can to do to actively protect your interests, prevent mistakes, and solve issues that could delay your closing. Working with a real estate attorney helps you stay on top of all the details of your life-changing investment and makes your transaction as painless as possible.

Find & Resolve “Hidden” Issues

When you purchase real estate, a title agent will search the property title for things like liens, and verify that the seller is the rightful owner, entitled to sell you the property. The results of this search are provided to the parties in a title commitment, which is one of the most important documents in the closing process. The vast majority of buyers do not know what a title commitment is and therefore don’t bother to review it. Hiring a real estate attorney to review the title commitment can alert you to issues before you purchase the property. In many cases they can help resolve these issues before the closing. Otherwise, you may not be aware of title issues that could cost you money later on: Issues like liens, easements, or deed restrictions. A real estate attorney can serve as the title agent too. 

Gain A Clear, Accurate Understanding

 Real estate contracts are incredibly complicated, and it’s critical that you understand everything you’re committing to, both rights and obligations, before you sign. When you hire a real estate attorney to review the documentation and contract for your potential purchase, you add a layer of protection and peace of mind. Your real estate attorney will review all the terms and contingencies, explain anything you don’t understand, and advise you if they find issues that work against your best interest. Another benefit to having an attorney review the title and contract is that they can let you know if there are any land use controls or zoning issues that could affect your future plans for the property.

Added Protection For Short Sales & Foreclosures 

Short sales and foreclosures can offer buyers excellent value, but that value is not without risk. When you’re dealing with bank-owned property or property that the lender has agreed to allow to be sold for less than the seller owes, there are some potential pitfalls. Hiring a real estate attorney helps ensure that you’re not stuck in a situation where the seller doesn’t actually have the lender’s permission for a short sale, or the lender is able to come after you for the shortfall later, or you’re dealing with liens or other encumbrances that transfer with the property title.

Experienced Real Estate Attorneys In Florida 

The real estate attorneys at Overstreet Law, P.A. are highly experienced in helping Florida real estate buyers and sellers protect their interests and investments. Call us or contact us online for a confidential consultation, and we’ll let you know what to expect and how we can help!

/by

Pitfalls of the Quit Claim Deed

Property deeds are used to transfer ownership from one party to another. There are two basic types of property deeds in Florida: a Warranty Deed and a Quit Claim Deed. The two offer different levels of protection for the new owner with the Warranty Deed providing better protection, but many people opt to use the Quit Claim Deed to transfer property, particularly if the transfer occurs between family members.

Even with a familial connection, quit claim deeds raise many concerns and, when not executed properly, can lead to serious repercussions over the short- and long-term.

Cautions Regarding Quit Claim Deeds

Quit claim deeds do not require the property to undergo a title review or attorney review, which means there is no third-party verification that the title is free and clear of liens or that the one transferring the property title has the right to do so or if there will be tax implications for either party.

Failing to have a real estate attorney review the entire transfer process can have many different consequences for both the grantee and the grantor, such as:

  • Florida’s Homestead Tax Exemption.It is possible to lose or reduce this tax exemption when ownership changes, depending on who qualifies for the exemption, and whether the new owner or additional owner resides in the property.
  • Medicaid Eligibility.If you transfer certain assets, namely your primary residence, within five years before applying for Medicaid (known as the look back period), it may cause you to be ineligible for benefits for a period of time.
  • Documentary Stamp Taxes.Any property ownership transfer in Florida may be subject to documentary stamp tax, even if the transfer occurs between spouses.
  • Potential Liability. When you add someone to the property deed of your home, the home becomes that person’s asset, in addition to being yours. That means that if your new co-owner files bankruptcy or has a judgment filed against them by a creditor, the house is an asset that can be encumbered by their creditors.
  • Loss of Title Insurance.When a property is transferred via Quit-claim Deed, it may void the Owner’s Title Insurance Policy.
  • Probate. In order to avoid Florida probate the property must be transferred in a certain way. If it is not transferred properly, or if there are any problems with the deed itself, the property will have to go through probate.

These are just a few of the possible complications that can arise during a property transfer, even if the transfer is amicable, within a family, and no money changes hands. Although they appear to be a simple solution to a simple property transfer, quit claim deeds can be anything but simple, creating problems where there were none prior.

It is always advisable to consult a real estate attorney or estate planning attorney when real property conveyance is required. These professionals will be able to examine not only the legality of transferring the property, but can provide insights as to how the transfer might affect your tax situation and other aspects of your life.

For advice on using quit claim deeds to transfer property in Florida, contact the real estate attorneys at Overstreet Law, P.A, online or call 407.847.5151.

/by

4 Advantages Of Using A Real Estate Attorney Vs. A Title Company

Unlike many other states, Florida does not require the use of an attorney during a real estate transaction. Buyers and sellers have the choice of using an attorney or a title company to handle the closing on their real estate transaction. This often causes the parties to wonder why they should hire an attorney instead of a title company to handle their closing.

In this post, we want to share with you 4 reasons why a title company is not a substitute for an experienced real estate attorney.

4 Advantages To Hiring A Real Estate Attorney For Florida Property Transactions

1. A title company works for the title insurer, not the buyer or the seller, whereas real estate attorneys work for whomever hires them. Once hired, an attorney represents that client throughout the transaction – in addition to overseeing the transaction to completion, they look out for their clients’ best interest and advocate for their client. The title company’s role is to prepare the basic closing documents required by the title insurer to complete the transaction and issue the title insurance policy.

2. Title agents do not have law degrees and cannot provide legal advice. When there are problems or questions, the buyer/seller can’t turn to the title company for help or advice. One of the most common issues that comes up is how to take title to the property, which has legal and tax ramifications. A title agent cannot provide advice in this situation, but an attorney can. Realtors as well as the buyer/seller, benefit from working with attorneys since the attorney can review the contract and answer legal questions during the contract negotiation process; title companies cannot. 

3. Title agents cannot create contract addenda, address problems in the sales contract, deal with non-standard forms, or correct legal issues that affect the title. This is important because if an issue arises, corrective documents may need to be obtained or created. Attorneys can provide legal advice on the best way to handle the issue, as well as prepare necessary documents, title agents cannot. Depending on the issue, a title agent will in fact have to send parties out to hire an attorney (at their own expense) to handle specific problems. Not having an attorney can delay the closing or even cause the transaction to fall apart entirely.

4. The costs of hiring a title company vs. an attorney are comparable. Many closing costs such as title insurance premiums, documentary stamps, and recording costs are set by the State of Florida. They are the same whether an attorney or a title agent is facilitating the process. In some cases, using an attorney can actually save the parties money by performing double duty as an attorney and a title agent; a title agent cannot do the same.

To learn more about the real estate services at Overstreet Law, P.A, contact us at 407.847.5151.

/by