Common Glitches When Buying A Home

/in /by

Buying a home is one of the most exciting and stressful events in a new homeowner’s life.  The prospect of becoming the official owner of the house that you have chosen is highly anticipated, but one major oversight can turn a homeowner’s dream into a nightmare. Closing is usually the buyer’s final opportunity to request changes and verify that previously-agreed-upon conditions are met.  While most closings are concluded with limited trouble, there are a few property closing mistakes that can turn homeownership into a misfortune.  Zwick Law’s Real Estate Settlement Division ensures that our clients experience a stress-free closing process, while we guide them along the way, avoiding these common mistakes.

The Existence of “Hidden Liens”

The past owners of the property you are buying may have left you with multiple problems, if they did not pay their bills in a timely manner. In some instances, a homeowner who failed to pay their association dues, utility bills, or bills for other services, could find themselves on the receiving end of a lien. This property lien requires that the lien-creditor receives the money they are owed from the proceeds of the home sale. While liens typically show up prior to closing, some people have purchased a home; lived in the property for years; and only discovered the existence of a hidden lien when they later attempted to resell the property.

Skipping the Final Walkthrough

After visiting the property you plan to purchase multiple times throughout the last month, going to the house one last time before closing may seem unnecessary or inconvenient.  While completing a final walkthrough is not required, not checking your property one last time could cause trouble. No matter how comfortable you are with the seller, and how nice the home had appeared during your past inspections, major problems such as new property damage or missing appliances are sometimes discovered during the final walkthrough.  A final walkthrough should always be completed.

No Homeowner’s Insurance

Purchasing homeowner’s insurance for a property, in many instances, is taken for granted, since it is usually considered to be one of the easiest parts of the home buying process. It is true that most homeowners have no problem finding a company to insure their new property; however, occasionally a prospective home buyer finds himself in position where no one wants to insure the home. If the seller files a large claim immediately before you close on the home, another insurance company may refuse to cover the property. A person who is buying a property with cash may be able to complete the transaction, but owning a home with no insurance is a huge financial risk.

Get Advice – Contact Zwick Law’s Real Estate Settlement Division When Buying A Home

The process of buying a home is not something that you should go through alone. The help of a qualified real estate attorney can simplify the transaction and increase your chances of having a problem-free experience. The team at Zwick Law’s Real Estate Settlement Division understands how important homeownership is, and we take pride in providing our clients with the legal advice they need to make educated decisions. Contact us today to schedule a consultation at one of our conveniently located offices in DuBois or Brookville, so that we can begin giving you the representation you deserve.

Zwick Law’s Real Estate Settlement Division is directed by Carl A. Lias, a Pennsylvania Licensed Title Insurance Agent since 1999, who has over 19 years of experience in residential and commercial real estate transactions, including refinance transactions, as well as extensive knowledge of conventional, FHA, VA, USDA and PHFA mortgage loan products.  Zwick Law’s Real Estate Settlement Division is uniquely positioned – as a dedicated settlement service provider situated within the four corners of a law firm – to ensure our clients enjoy the security, professionalism and friendliness that they expect and deserve, all while paying less than they otherwise would at other regional firms and title companies.

Top Three Reasons Real Estate Deals Fall Through

/in /by

Once real estate is under contract, many buyers and sellers make the mistake of assuming that the hard part is over.  In reality, however, that’s when the work begins — and, unfortunately, real estate deals can fall through during the contract phase.  When this happens, it leaves all parties stunned, as they are forced to start over the entire buying or selling process. While having a real estate deal unravel is stressful, it is not all that uncommon. Thus, by being aware of the main reasons that real estate deals fall through, you can prepare accordingly to avoid your real estate deal from failing before settlement.

Real Estate Title Problems

An issue with the title to a property can quickly derail a purchase, which leaves all parties dissatisfied and upset. Often times, title defects are not found until a title abstract is completed — which usually occurs shortly before closing. When this happens, buyers and sellers alike have little time to react. Finding out that a property has a judgment or lien against it, in most cases, will lead the lender to deny the buyer a loan until the title issue is resolved. And, depending upon the situation, it could take months or longer for the title issue to get resolved.  In some instances, a lawsuit, known as a quiet title action, is required to “clear” a cloud on the title to property.  A quiet title action, while unavoidable in some cases, can take time and cost money that no one anticipated.

Loan Denial

After being “prequalified” for a loan, many buyers assume that they will experience nothing but clear sailing going forward. Unfortunately, a preapproval does not mean that the lender cannot change its mind. If the buyer’s credit score drops between the preapproval and closing, then the bank may refuse to finance the purchase entirely — or, in other cases, will not approve the entire amount needed to complete the sale. Occasionally the buyer may pay the difference with cash, but if he or she is unable or unwilling to do this, then the entire transaction may fail.

Real Estate Inspection Problems

A property that looks wonderful on the outside may have a multitude of problems on the inside.  Issues such as leaks, damaged roofs, moldy basements, and more, are usually revealed during a detailed home inspection completed by a professional.  While some problems are easy to resolve, expensive repairs may make the buyer have second thoughts about the entire purchase. If a buyer is getting cold feet about the transaction in general, then even a minor cosmetic or appliance issue could turn into a major point of contention. If a seller is unwilling to make repairs or offer a credit, then the entire sale may come to a halt.

Getting the Legal Advice You Deserve – Contact Zwick Law

If you or someone close to you has recently experienced problems with buying or selling a property, consulting a real estate attorney can help you determine how to proceed. The attorneys and Real Estate Settlement Division at Zwick Law understand how stressful real estate transactions can be, and we are able to guide you through each stage of the process while providing you with the legal advice you deserve. With offices conveniently located in DuBois and Brookville, Pennsylvania, we are available to provide you with a private consultation to discuss your situation and individual needs.[1]

[1] Disclaimer: The use of the Internet, Facebook and/or any other form of social media communication with the firm or any individual member of the firm does not establish an attorney-client relationship.  Time-sensitive information should be directed immediately to the office of Zwick Law at (814) 371-6400.

______________________________________________________________________________________

 

Relief In Sight For Home Buyers With Student Loan Debt

/in /by

Student Loan Debt

The rules regarding treatment of student-loan debt in calculating loan-to-debt ratios have undergone significant changes.  These rule changes, implemented by mortgage investor, Fannie Mae, will have the effect of easing the scrutiny of new home buyers’ creditworthiness.

Of the rule changes, here are two that could benefit you, if you have student loan debt:

  1. If you participate in a reduced payment plan to pay your student loan debt, then your actual monthly payments, as reported to the credit bureaus, will count toward your income-to-debt ratio calculation. For example, if your original monthly payment was $500 a month, but it has been reduced to $100 through an “income-based repayment” plan, then only the $100 will be added to your monthly debts to calculate your income-to-debt ratio.  Under previous rules, lenders were required to use a factor of 1% of your student loan balance as your monthly payment, even though you were only paying a fraction of that amount.  As a result, many borrower’s income-to-debt ratios were pushed beyond most mortgage lender’s underwriting limits.  This prohibited many potential new home buyers from purchasing their first home.  By using the actual monthly payment of student loan debt, many more first-time home buyers will qualify for a mortgage.
  2. If you have nonmortgage debts that are being paid by someone else – for example, let’s say your parents pay your monthly credit card balances – these nonmortgage debts no longer will be included in your income-to-debt ratio calculation, provided that the payments have been made steadily for 12 months or more by someone other than you. This rule change should improve the debt ratios of young buyers who are getting a little help on their cash flows from their parents.

Zwick Law’s Real Estate Settlement Division is directed by Carl A. Lias, a Pennsylvania Licensed Title Insurance Agent since 1999, who has over 18 years of experience in residential and commercial real estate transactions, including refinance transactions, as well as extensive knowledge of conventional, FHA, VA, USDA and PHFA mortgage loan products.  Zwick Law is dedicated to providing clients in DuBois, Treasure Lake, Brookville, and surrounding areas across Western Pennsylvania with experienced, fast, professional and friendly real estate settlement services, at a cost that is typically more affordable than non-lawyer, real estate title companies.

Contact Zwick Law’s office to discuss your residential or commercial real estate matters.  To schedule an appointment, contact the Real Estate Settlement Division at (814) 371-6400, by e-mail at realestate@zwick-law.com, or via our Contact Page.