Buying Foreclosures Basics
June 4th, 2009 categories: California Property Taxes, Finances, Foreclosures, Home buying
Tips to protect your interests in real estate
Now is a great time to take advantage of buying foreclosures, bank owned homes and even short sales. But how do you lessen the risk of liens and judgments attached to a home? That is one of the many fears buyers have when shopping for a home and another good reason to have a seasoned real estate broker representing you at the table. I’m going to outline the process and highlight some ways you can protect yourself from absorbing the previous homeowners bills.
The typical escrow begins with a preliminary title report which itemizes all the liens on the property. In our region the escrow officer will order the report and the buyer should receive it within 72 hrs of depositing their check with the title company. This report gives a full disclosure of all the liens and judgements on the property and identifies who holds those liens and how much is owed. I cannot emphasize enough that buyers need to carefully review this information.
It is important to understand that the preliminary title report is only good from the day it was printed which is usually 14-21 days prior to the escrow being opened. In other words if you open escrow May 21st then your preliminary title report will show all the activity on that property up to May 1st. This is to allow time for the recordings against that property to show up in the system. The escrow officer will pull another title search just prior to funding the loan to ensure no additional liens were placed on the property between the time the purchase contract was signed and the transfer of title to you.
On this report you will see everything that is attached to the home and if there are outstanding bills like water, sewer or garbage. Most of the banks that I have worked with paid off the utility bills for the short sales that I have closed but it is never safe to assume that they will. I have seen water bills in the $800 range because some utility companies will not close the account out until the final bill has been paid. Even though the homeowner may have vacated the home the monthly cycle continues until the final bill shows paid in full. The escrow officer should follow up to confirm all utilities are clear prior to funding the loan but it doesn’t hurt to ask at the time your sign your paperwork.
Judgements are another issue that can be resolved at the time of closing so long as they are paid in full. They can range from child support to back taxes. The title officer will do a check against all parties social security number to make sure each party is free of judgements. My recommendation is for the title officer to do this early in the escrow so that no surprises show up at the end. I once had a judgement show up for a buyer of $45,000 for back taxes happen 3 days prior to closing the escrow. Fortunately they had the cash to bring to the table but if they didn’t then the entire deal would have blown up.
After all is said and done there is a title insurance policy that is taken out for the buyers to ensure a free and clear title to the property should anything show up after the escrow has closed. Of course the buyers pay for this but it is money well spent especially if a lien shows up or a judgement from some government agency happens without notice. The bottom line is to work with a realtor who has good relationships with title companies…they are your allies and are there to protect your interests.
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Property Tax Reassessment Scam
April 24th, 2009 categories: California Property Taxes, Real Estate, Tax Incentives
Official looking tax documents
There is a company sending out official looking tax reassessment statements claiming they can help you get your property reassessed and thereby save you money on your property taxes all for the low cost of $179.00. The fake document contains all your tax information which is readily available via the county’s tax records. The simple truth is that you can contact your county tax assessor and ask for a reduction in your taxes for FREE and all it requires is that you submit comparable homes sold since Jan 1, 2009. As a realtor we provide this information when we do a market analysis prior to listing homes for sale. This window of opportunity extends until June 30, 2009 so you will need to have your request submitted by that date.
This company, Property Tax Reassessment, is located in Los Angeles and does not have a website available. From the moment I called them they discriminate between people who have sent their ”service fee” in and those who have not. I chose option two and was directed to an operator who was able to tell me I could direct questions to an email but there was not a website to get more information. According to Consumerist.com they have been mailing out these official looking documents across the state and the public is advised to contact their local attorney general and of course don’t send them any money!
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