Tag Archive for: real estate

Top Three Reasons Real Estate Deals Fall Through

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

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.