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What Homeowners Need To Know About Title Insurance

Protecting your home investment:

A home is usually the largest single investment any of us will ever make. When you purchase a home, you will purchase several types of insurance coverage to protect your home and personal property. Homeowners insurance protects against loss from fire, theft or wind damage. Flood insurance protects against rising water. And a unique coverage known as title insurance protects against hidden title hazards that may threaten your financial investment in your home.

Oversimplified, title insurance insures a homebuyer — and a mortgage lender — against loss resulting from title defects, whether these defects are known or unknown at the time of the sale or the refinance. In the language of the title industry, the insurance covers both “on record” and “off record” problems.

Protecting your largest single investment:

Title insurance is not as well understood as other types of home insurance, but it is just as important. When you purchase a home, instead of purchasing the actual building or land, you are really purchasing the title to the property – the right to occupy and use the space. That title may be limited by rights and claims asserted by others, which may limit your use and enjoyment of the property and even bring financial loss. Title insurance protects against these types of title hazards.

Other types of insurance that protect your home focus on possible future events and charge an annual premium. On the other hand, title insurance protects against loss from hazards and defects that already exist in the title and is purchased with a one-time premium.

There are two basic kinds of title insurance:

  • Lender or mortgagee protection
  • Owner’s coverage

Most lenders require mortgagee title insurance as security for their investment in real estate, just as they may call for fire insurance and other types of coverage as investor protection. When title insurance is provided, lenders are willing to make mortgage money to lend.

Owner’s title insurance lasts as long as you, the policyholder – or your heirs – have an interest in the insured property.

When your seller purchased the house several years ago, his title insurance policy covered him — and his lender — for all risks (defects) that existed at time he took title; the policy did not cover future defects.

During the time the Seller owned the property did a mechanic place a mechanic’s lien against the property?

Did a creditor obtain a judgment against the seller and have that judgment recorded? Did the home get sold at a tax sale, without the seller’s knowledge? Did someone forge the seller’s name to a deed and sell the property to a third party? Or did someone accidentally place a lien against your property (Lot 657) when they really meant to place the lien on Lot 567?

Strange as it may sound, these things do happen. Your lender wants assurances that should you not be able to make the monthly mortgage payment, and the lender has to foreclose on your property, that you have clear title. Your new lender is willing to make you a loan; however, since you cannot categorically advise the lender that you have clear title, the lender will insist that you obtain a title insurance policy in favor of the lender.

What does your premium really pay for?

An important part of title insurance is its emphasis on risk elimination before insuring. This gives you, the policyholder, the best possible chance for avoiding title claim and loss.

Title insuring begins with a search of public land records affecting the real estate concerned. An examination is conducted by the title agent or attorney on behalf of its underwriter to determine whether the property is insurable.

The examination of evidence from a search is intended to fully report all material objections to the title. Frequently, documents that don’t clearly transfer title are found in the chain, or history that is assembled from the records in a search. Here are some examples of documents that can present concerns:

  • Deeds, wills and trusts that contain improper wording or incorrect names
  • Outstanding mortgages and judgments, or a lien against the property because the seller has not paid taxes
  • Easements that allow construction of a road or utility line
  • Pending legal action against the property that could affect a purchaser
  • Incorrect notary acknowledgments

Through the search and examination, title problems are disclosed so they can be corrected whenever possible. However, even the most careful preventative work cannot locate all hidden title hazards.

Hidden title hazards – your last defense

In spite of all the expertise and dedication that go into a title search and examination, hidden hazards can emerge after closing, resulting in unpleasant and costly surprises. Some examples of hazards include:

  • A forged signature on the deed, which would mean no transfer of ownership to you
  • An unknown heir of a previous owner who is claiming ownership of the property
  • Instruments executed under an expired or a fabricated power of attorney
  • Mistakes in the public records
  • A mortgage (deed of trust) is properly recorded on the land records, but there is no legal description identifying the property that is subject to the mortgage. As a result, creditors are not put on notice of the existence of this mortgage lien, and may make another loan, which will not have first-trust priority.
  • A deed (or other legal document) is improperly recorded with the wrong legal description.

The list, unfortunately, can go on and on. There are numerous instances where title to real estate has been found to be defective — either based on substantive grounds or technical, legal procedural reasons (such as improper indexing, misfiling or failure to comply with local recording requirements).

Title insurance offers financial protection against these and other covered title hazards. The title insurer will pay for defending against an attack on title as insured, and will either perfect the title or pay valid claims – all for a one-time charge at closing.

Your home is your most important investment. Before you go to closing, ask about your title insurance protection, and be sure to protect your home with an owner’s title insurance policy.



You Are Under Contract…What’s Next?

You searched for homes over the course of months or even years. You endured a series of offers and counter offers, property disclosures, inspections and reports. Finally, after so much excitement, stress and anxiety, the house hunt has come to an end.
But the story isn’t over yet. Here are some next steps to consider before you actually move in.
Plan any work well in advance:
Rarely does a buyer get a place that is truly in “move-in” condition. By the time you’ve signed a contract, you have lots of ideas about how you’ll live in this home, how you’ll customize it to suit you and your family,  and what work needs to be done.
If the place needs work, don’t wait until you’ve closed to engage a painter, a floor re-finisher, or a general contractor. Either at your final walk-through or during a private appointment after you’ve removed your contingencies get the proper contractors in the house. Start getting bids for necessary work. If possible, have floor sanding, painting, demolition,  or small fix-it work done before you move in. Real estate agents work with all kinds of tradespeople, so they’re often a great resource recommendations.

Set up the utilities:
Some people assume the utilities will work once they walk in on day one. While many utility companies have grace periods (the days between when the seller cancels service and the new owner calls), you can’t always assume this will be the case. If you have an out-of-town seller, they may have cancelled services the day they knew all contingencies were removed. In this instance, the grace period likely lapsed, and you may be stuck dealing with the electric company, waiting for an appointment or just being without power when you really want to start painting, fixing or cleaning.

The best plan is to call the utility companies and get service set up well before closing. If they haven’t received cancellation notice from the seller, let the seller know to take care of that.

Got the keys? Great, now change the locks:
Assume that every one and his brother has a set of keys to your new home. The seller’s real estate agent likely gave copies to his or her assistant, a painter, stager or even another agent at some point during the marketing period. That’s why the first person you should call after getting the keys is a locksmith.Spend the money to get all the locks changed right away. You’ll sleep better at night.

Hire a cleaning crew:
The Seller has an obligation to leave the property “broom clean”, but this in no way assures that the carpets have been cleaned, the floors mopped and the insides of the cabinets and drawers have been wiped down/  There’s nothing worse than showing up with the movers, dozens of boxes and your personal belongings only to discover the seller hadn’t had the place cleaned thoroughly.
Assume the worst and get a professional cleaning crew in there the minute after the closing. Even if the seller did clean, they may have done a poor job. You want to start life in your new home with a clean slate. The movers might make a mess while moving in. But the bones of the place will be sparkling clean and you won’t be scrambling to get cleaners in while the home is in a state of disarray as you unpack.

Have a handyman, small contractor or designer on call:
Moving in can take days, if not weeks, and is made up of the kind of stuff you wouldn’t wish on your worst enemy. Things like aligning your framed artwork, centering the couch in the living room or getting the large rug set up in the master bedroom can drive you crazy. Nailed multiple holes in the wall in an attempt to get your family photos lined up on the staircase? Not all of us are cut out to do this kind of stuff.

While it may seem like a luxury, investing a few hundred dollars in hiring someone to take orders, help with setting up and take over some of these mindless tasks will save time and potentially relieve you of a giant headache.

Thinking ahead is the way to go:
The journey to home buying could have been anything from fun to stressful and emotional. When the closing date draws near, you’re probably exhausted. But taking a little extra time to plan ahead will save you time, money and a lot of hassle. And it will make the move into your new home so much more satisfying.

10 Reasons Why Another Real Estate Crash is Unlikely Today

How concerned should investors and homebuyers be that we’re headed for another real estate crash as we approach the 10-year anniversary of the infamous 2006-2007 housing bubble? Not at all.

Although buyers are paying spectacular prices for commercial properties and trophy homes, just as they did then, this time price increases are being fueled by foreign investors seeking diversification and a haven for their funds, as well as investors on the hunt for a low interest-rate environment.

Real estate is still a favorite life raft for nervous investors, who are seeking safety amid market volatility.

This has led to record real estate prices, which some have interpreted as a sign that the U.S. real estate market is once again climbing into bubble territory and headed for another crash. But a repeat of the 2009 real estate implosion that followed the collapse of the equities market in 2008 is highly unlikely this time.

Here are the top 10 reasons why:

1. Most Americans Have Refinanced to Fixed Rate Loans

Most Americans who could refinance to a fixed-rate mortgage have already done it. As a result, the impact of interest-rate shock when short-term ARMs re-adjust will be minor, compared with what happened in 2008-2009. During that period, many Americans could no longer afford their new mortgage payments and defaulted.

2. Bank Repossessions are Flushing Out Old Distressed Properties

Bank repossessions recently rose to the highest levels in more than two years, signaling that banks are dealing with properties in default and flushing out old distress, rather than ingesting more. Foreclosure activity continues to fall.

3. Loans in Foreclosure Are at the Lowest Level Since 2007

Despite an increase in bank repossessions, the percentage of loans in foreclosure nationwide is just 2.1% — the lowest level since 2007, according to the Mortgage Bankers Association.

4. There’s Less Risk of a New Mortgage Bubble

The market is no longer fueled by a surge in new housing loans based on loose credit standards. Tighter requirements for loan approvals that followed the 2009 mortgage meltdown reduced the number of foreclosures nationwide to a 10-year low. This tempers the number of real estate bubbles that can pop and, if the market slows down, there may be a contraction, rather than a pop. New TRID requirements are further evidence of guarantying a healthy mortgage market.

5. Interest Rates Are Likely to Remain Low for the Foreseeable Future

The likelihood the Federal Reserve will raise key interest rates recently lessened, following the economic disruption coming out of China. As a result of recent market volatility around the globe, rates have not climbed as expected and the risk of higher rates has diminished for the foreseeable future. It’s also important to mention that China’s slowdown could also positively impact U.S. property values, as global funds seek relative stability in the U.S. real estate market.

6. First-Time Buyer Assistance Programs are Luring New Buyers into the Market

New initiatives have been put in place to assist prospective first-time homebuyers. At the beginning of 2015, the Federal Housing Administration (FHA) moved to reduce annual mortgage insurance premiums by up to $900 per year. This move could push home sales up to 5.6 million — the most seen since 2006- and it could introduce as many as 140,000 new buyers to the market, according to the National Association of Realtors. The FHA’s program aims to transition millennials and others from renting to owning a home.

7. Job Creation Indicates the Economy is Getting Stronger

The United States has added jobs at a steady rate over the past five years, and many of the jobs that were lost during the recession have been brought back. Additionally, the quality of jobs being created has improved as the economy has recovered.

8. Average Residential Home Prices Have Risen at a Slow, Steady Pace

Unlike the high-end, luxury market, prices for average residential homes have risen at a slow, steady pace. According to the S&P/Case-Shiller Composite 10-Home Price Index, residential home prices remained 15 percent below their April 2006 peak as of July 2015.

9. New-Home Construction Has Not Recovered from the Downturn

The supply of existing homes for sale today is lower than it was in 2000, although the population has grown more than 14%. New, single-family starts are 60% below the 2006 peak and roughly 25% below the average for the past 15 years.

10. Commercial Real Estate Remains Below Peak Levels

Commercial real-estate fundamentals are similarly healthy, and although commercial real estate prices have increased steadily since the crash, they still remain below peak levels. Vacancy rates are at or near all-time lows for apartments and warehouses, and are at their lowest post-crisis point for office and retail properties.

Commercial real-estate development also remains more than 25% below its pre-recession peak, which has led to improved property fundamentals, with both occupancy rates and rents rising.

The real-estate market today has a stronger foundation than it did in 2006, thanks to more disciplined and conservative credit underwriting of debt and a market that is much healthier than it has been at any point during the past decade.

Nearly 10 years after the bubble began, the message to investors is clear: Rest assured you are looking at a chastened and more disciplined market in which to participate — not another looming bubble.


By Chris Leavitt, Contributing Writer for The Street

What You Should Do After Closing

You searched for homes over the course of months or even years. You endured a series of offers and counter offers, property disclosures, inspections, loan applications, due diligence, and packing. Finally, after so much excitement, stress and anxiety, the house hunt has come to an end. But the story isn’t over yet. Here are some next steps to consider before you actually move in.

Make Copies of your Closing Documents.
The first stop you make after closing should be your local copy shop. While all the documents are still together and in order, make at least one copy of everything. Put one set in your folder for tax filing and one set in a file for house records.
Get a Safe Deposit Box and Put the Original Documents In It.
Keep your photocopies on hand at the house in case you need them in a pinch, but store the originals of your mortgage loan docs and your title certificate in a secure, off-site location. That means a safe deposit box at the bank, or on file with your attorney.
Got the keys? Great, now change the locks.
Assume that every one and his brother has a set of keys to your new home. The seller’s real estate agent likely gave copies to his or her assistant, a stager, handyman, or even another agent at some point during the marketing period. That does not even take into consideration the spare keys that the Seller’s gave the neighbors, their family, cleaning lady, and babysitter. That’s why the first person you should call after getting the keys is a locksmith. Spend the money to get all the locks changed or re-keyed right away. Don’t forget to reset any key code combinations that can be used to gain entry to the house as well including the garage door opener, garage keypads and alarm combinations should be changed.
Hire a cleaning crew.
There’s nothing worse than showing up with the movers, dozens of boxes and your personal belongings only to discover the seller hadn’t had the place cleaned as thoroughly as you would have liked.

Assume the worst and get a professional cleaning crew and painters in there the minute after the closing along with carpet cleaners. You want to start life in your new home with a clean slate. The movers might make a mess while moving in. But the bones of the place will be sparkling clean and you will have freshly painted closets and walls before the furniture and clothing gets in place.
Have a handyman, small contractor or designer on call.
Moving in can take days, if not weeks, and is made up of the kind of stuff you wouldn’t wish on your worst enemy. Things like aligning your framed artwork, centering the couch in the living room or getting the large rug set up in the master bedroom can drive you crazy. Nailed multiple holes in the wall in an attempt to get your family photos lined up on the staircase? Not all of us are cut out to do this kind of stuff. While it may seem like a luxury, investing a few hundred dollars in hiring someone to take orders, help with setting up and take over some of these mindless tasks will save time and potentially relieve you of a giant headache.
Play “what went off”:
Turn all of the lights on, plug radios, lamps, etc., into as many outlets as possible, then turn circuits off one at a time; make a list of which breaker controls what, and post it near or on the inside of the panel(s). Make sure you know where the main water shutoff is, and test it to see if it works. If you have a water filter, check it or replace it.
Check the furnace filters/replace if not new looking. Check gutters and leaders for blockage; clean if necessary. If you have a fireplace, have the flue inspected by a professional. Check/change batteries in smoke detectors.
If you control your own hot water, you’ll want to check the temperature pretty early on during your first day in the house. Developers of new homes have a bad habit of turning water heaters to “vacation” mode just before closing. This saves their utility bills but will result in a cold surprise when you go to take a shower. The temperature dial on your water heater should have a tick mark at the best setting. You don’t have to turn it all the way to the hottest point unless you need near-boiling water at all times.
 Put your Name on the Mailbox & Buzzer. If you’re living in a multi-unit complex, like a condo building, you’ll want to get your name on the mailbox as quickly as possible, since the post office won’t deliver to nameless boxes. People are of mixed opinions on whether you should also label your intercom buzzer. It can compromise your privacy, but if you’re expecting a lot of guests or deliveries it will make things easier.
Cover the Windows.
The residents of your new neighborhood are about to watch you parade all your belongings into the house. Don’t let them figure out what you’ve done with them so easily. Make sure you’ve got something in the windows of each room – it can be towels, shower curtains, cardboard – doesn’t matter what for now. Just make sure your privacy is safeguarded so your windows don’t become a walking advertisement for burglars and peeping toms.
Photograph everything. 
You’ll eventually want to take an inventory of everything you move into your house, but before you do so it’s a good idea to take pictures of your house in its native state. Once furniture is in place it will be difficult to remember where outlets are and what your home looked like when it was brand new. In the event of a catastrophic loss, you’ll need to refer back to those pictures in order to restore your home, so make sure you store them offsite, email them to yourself at a webmail address, or upload them to a cloud-based server.
Meet your new neighbors.
Getting to know your new neighbors and trading phone numbers can be very beneficial in case of emergencies. There is always value in having a good neighbor.
Make sure your first weeks and months of homeownership are safe and pleasant.

Plan first. Party later.

Tips For Moving With Pets

So, you’re moving to a new home. Congratulations! Whether you’re traveling across town or across the country, here are some tips for making moving day as easy and stress-free as possible for the entire family, including your beloved pets.


  • Prior to moving day, make sure your pets are fitted with collars and ID tags with your name and current cell-phone number. Micro-chipping is also recommended and will serve as a backup if your pet loses its collar.
  • If your pet is prone to car or airsickness, make sure you visit your veterinarian a few weeks prior to your move to get any prescribed medications and feeding recommendations.
  • Ask you current veterinarian to make a recommendation for a new pet in the area you are moving to.  Ask for copies of all of their inoculation records and keep them handy.
  • Make sure you fill at least one week’s worth of your pet’s prescriptions since you will not have developed a relationship with a vet the minute you move in.
  • For long-distance moves, be sure to identify pet-friendly hotels along your route and reserve rooms ahead of time. For a list of pet-friendly hotels, see or
  • On moving day, make sure your pets are secured in a crate or closed room of your house or apartment until you are ready to load them into your car. The activities and sounds of moving day will be frightening to your pets, so it is important that they be kept in a secure area to reduce their stress as much as possible and to prevent an accidental escape.
  • Always transport cats, small dogs and other small animals in a secure, well-ventilated pet carrier. Take the time to familiarize your pet with the container in advance of the move.
  • Keep larger dogs leashed and under control at all times. The stress of a move can cause even the most obedient dog to run away in unfamiliar surroundings. NEVER transport any pet in an open truck bed, trunk of a car or storage area of a moving van.
  • Prepare a pet first aid kit, including your vet’s phone number, gauze to wrap wounds or muzzle for your pet, adhesive tape, non-stick bandages, towels and wipes, and hydrogen peroxide.
  • When you arrive at your new home, set up the things your pet will need immediately and are familiar with such as their water and food bowls, toys, bedding and litter box.


For long-distance moves, make sure you give your pet potty breaks and fresh water whenever you stop for a break yourself. Make sure pets are leashed at all times during potty breaks.

TRID: What it means for you as a Homebuyer

On November 13, 2013, the Consumer Financial Protection Bureau issued a rule regarding changes to current early disclosure and closing documentation used on mortgage loan transactions. Anyone in the real estate or mortgage industry should understand that new regulations called TRID (TILA/RESPA Integrated Disclosures) and how they will have an impact on the timing and notifications required throughout the closing process.

But what does TRID mean for you as a homebuyer? If you have previously bought or sold a home, you’ll see two main changes: forms and closing deadlines.

Forms. The Truth-in-Lending Statement and Good Faith Estimate will be replaced by a new Loan Estimate. The Final Truth-in-Lending Statement and HUD-1 documents will be replaced by the Closing Disclosure.

These forms have been changed to provide the buyer with a clearer picture of the costs involved with mortgage financing, and to give the buyer more time to review and accept these terms. These changes originate from the CFPB (Consumer Financial Protection Bureau) as part of the Dodd-Frank Act. The standard real estate contacts are changing as well to reflect the dates and timing of obtaining a loan.

What is most important is the impact on the time it may take to schedule a closing under these new rules. Buyers must receive and acknowledge their Closing Disclosure at least 3 business days prior to the closing. This will require more coordination and communication between agents, closing attorneys and lenders to ensure this takes place. It is very important to make sure you are working with an informed team of agents, closing attorneys and lenders in order for the process to go as smoothly as possible.

Keep these three primary areas in mind while preparing yourself for the home buying process if you are planning on getting a mortgage:

  1. The old forms are out.


The homebuyer will be receiving new disclosure forms from lenders explaining the loan estimate and loan closing. The Loan Estimate form combines the Good Faith Estimate (GFE) and the Truth in Lending Disclosure into a shorter form that should be easier to understand and explains the mortgage loan’s key features, costs and risks at the beginning of the mortgage process.

Under TRID, a lender cannot impose any fee, except a reasonable fee for obtaining a consumer’s credit report, on a consumer until the consumer has received the loan estimate and has indicated intent to proceed. This should make it easier for a consumer to shop for and understand interest rates, but it might take lenders longer to preapprove someone because they are going to be extra careful when collecting and reviewing borrower information.

The Closing Disclosure form combines the final Truth-In-Lending statement and the HUD-1 settlement statement into a shorter form that should be easier for the consumer to understand and provides a detailed account of the entire real estate transaction, including terms of the loan, fees and closing costs.

This disclosure might transform the closing table from a nightmare experience with piles of documents to review for the first time into a more manageable, slightly bad dream of reviewing the information ahead of time.

With more information provided by the lender before the closing date, the various roles held by the lender and title company at the closing table might change. Stay tuned.

2. The disclosures must be provided within a specific time frame — or else.

 Lenders must provide the Loan Estimate form to consumers within three business days of applying for a loan – which means three business days after the consumer provided the lender with their name, income, Social Security number, property address, property value estimate and mortgage loan amount sought.

The Closing Disclosure form must be provided at least three business days before loan consummation (the time the consumer becomes contractually obligated to the mortgage, which is usually at closing).

Any significant changes to the loan terms (the annual percentage rate (APR) becomes inaccurate, the loan product changes or a prepayment penalty is added) will restart a new three-business-day waiting period. Both the Loan Estimate and Closing Disclosure forms can be delivered in person, by mail or electronic delivery.

3. The closing process will be impacted this in the months to come.

 The TRID rules apply only to loan applications received after Oct. 3. Lenders will be extra careful and hesitant after this date, while providing mortgages so as not to be out of compliance with the new rules. This will most likely translate to longer timelines to get a mortgage and will delay closing dates.

This, in turn, will impact the tight timelines around moving into a home while consumers are also coordinating assets, move-in dates, time off of work and so on.

Plan for extra time to close while everyone tests out the new system and becomes familiar with new regulations and how to work together and train staff. If you are a Buyer, look for agents, attorneys and lenders that are using electronic disclosures and e-signatures. This will dramatically shorten the loan process by almost two weeks as compared with those that are relying on the US Mail.

Many common real estate practices that you have experienced in the past will be more difficult or even impossible after October 3. Critical issues like dates per the sale agreement and how changes to the deal will impact timing may cause delays because of the three-day rule and the requirement that lenders now prepare the CD. The need for Title companies and real estate agents to submit information much earlier in the process will definitely add more hurdles to jump over to close a transaction.

In my opinion, CASH transactions, will carry a much higher level of negotiation leverage for the next several months until this process becomes the norm.


The Importance of a Final Walk-Through

There is often a misconception of what a final walk through is and why it’s important.  A final walk through can sometimes be referred to as a pre-closing “inspection.”  Although you are probably excited and anxious to close on your new home, the final walk through is important and many things should checked and inspected and not overlooked.

The final walk through is NOT a home inspection.  In most cases, a buyer has had the opportunity to perform a thorough home inspection prior to finalizing the contract for purchase.  It is a common contract contingency that you should be aware of when purchasing a home. The final walk through is the time to ensure that the personal property items that were agreed to be included in the sale, are still present, that the condition of the home is substantively the same or better than the day you went under contract, check the functionality of the home’s features, and that any agreed to repairs have been made to your satisfaction.

Oftentimes, buyers negotiate sale terms to keep new appliances, light fixtures, window treatments and other installations as part of their purchases agreements. Bring your contract to purchase with you and begin your walk-through by confirming all agreed upon features are still present and in the same condition as the time of inspection.

When homes are transferred from a seller to a buyer, they are supposed to be in “broom-clean condition.”  The term “broom-clean” is a very vague, as it can mean one thing to the buyer and a different to the seller.  If there is garbage, boxes in the attic, old paint in the garage, or personal belongings from the seller in the storage areas or in the home, they should be removed by the seller at their expense prior to closing.  It is not the responsibility of the buyers to remove or dispose of the seller’s possessions that were not specifically identified as personality that was to stay with the property.

When a seller’s furniture is moved out, it’s much easier for buyers to recognize damages they may have overlooked during their initial inspections. Review surfaces, ceilings, walls and floors for any new damages such as scratched or soiled flooring and carpet, look for water damage, and cracked windows and walls.

Possibly the most important part of the final walk through is to complete a checklist of the home.  Your real estateagent should supply you final checklistwith a thorough checklist and assist you with the walk-through.  The checklist should include, but not be limited to the following:

•   Check gas features, including fireplace inserts, stove and oven

•   Does the fireplace turn on with the switch

•   Do the burners warm when lit

•   Does the oven heat properly

•   Flip switches on the garbage disposal

•   Check all ceiling fans

•   Ensure the exhaust fans work properly

•   Check the AC and heat thermostats

•   Open the refrigerator; is it cool and cleaned out. Is the icemaker making ice?

•   Turn knobs on each faucet to test the handles work

•   Is the water warm indicating the water heater is functioning correctly

•   Is there proper drainage down each drain

•   Look below each sink for moisture or leaks

•   Flush each toilet and ensure they fill back up with water instead of running or leaking

•   Peer around bathrooms, kitchens, and laundry rooms for water damage

•   Check along flooring or base molding and spot any indicators of mildew or mold

•   Walk around the entire home testing each light switch

•   Are all switch covers present

•   Open and close every window

•   Make sure the windows and doors lock shut properly

•   If screens and storm windows are expected, account for each before moving to the next window.  If there are hurricane shutters that remain with the house make sure they are all in place.

•  Test to make sure the pool pump is running

•   Is the landscaping in good shape, has the grass been watered?

•   Check the garage door openers and try each control

•   Ring the doorbell

•   If an alarm system is included in the purchase agreement, test entry and disengagement

•   If the property has a sprinkler system, start it to make sure it’s functioning

•   Look at the exterior siding, roofing, chimney, or any other exterior features that the home may have.  If there has been severe weather recently this is extra important, as it’s not uncommon for roof shingles or siding to be damaged.

•   If there were items that were agreed upon between the buyer and seller to be repaired or fixed, make sure they have been completed.  A good buyers real estate agent should ask for receipts or records from any repairs that were agreed upon.

•   Look for owner’s manuals to accompany all appliances and remote controls for ceiling fans, lighting, sound systems or any other features.

Buyers agents can require sellers to meet the terms of the purchase agreement prior to closing or renegotiate new terms to cover costs of repairing any missing features or damages found during the final walk-through. This is often accomplished in conjunction with the buyer’s attorney.  If there are problems that arise from the final walk through, it’s important to address them quickly.  The final walk-through is the last chance for buyers to critically review properties before signing closing paperwork. Buyers who use the opportunity wisely tend to have the highest probability of buyer satisfaction

The Foreign Buyers Guide – What you need to know about buying real estate in the United States

For many a foreign national, the United States has always been a great place to invest in.

Buying Real Estate in the United States does not give foreign owners any rights or privileges regarding legal stay or status. If you’re interested in staying in the states longer than allowed by a standard visa, contact an immigration lawyer.

By determining the primary use for your property and how long you plan to own it, you’ll be able to provide information to your real estate agent that will help guide the search and sale.

How will you use the Property?

Before you start your property search, it’s important to think ahead to how you’ll use the home once the deal is done.

  • Will this be a vacation home?
  • A home to stay in while doing business in the United States?
  • A home for your children while they attend college in the States?
  • An investment?
  • An eventual long-term residence?

The way U.S. real estate transactions are carried out may differ from your home country. Each State in the US has its own set of rules regarding the purchase of real estate, including the type of purchase contract used, the method of closing the sale and even the duties and titles of the individuals involved.

Several important U.S. real estate practices that are worth noting are:

  • In the United States, real estate listing information is shared by agents using multiple listing services ( MLS) and consumers can access that same information using real estate sites such as com or In many other parts of the world, real estate is a fragmented business and buyers have to go from agent to agent to find a property.
  • In some countries, it is typical to pay a fee to the agents who are scouting properties on your behalf and showing you around. In the United States, the sales commission is paid by the seller who has a listing agreement with the Seller, so buyers don’t pay anything to have an agent work on their behalf if it is being advertised in the MLS system. It is always advisable for a buyer to work with an Exclusive Buyer Agent who will protect the buyer’s interest in the transaction. Make sure you ask any agent you contact what their “agency relationship” is to you. Each state has different forms of agency and many agents do not work for the benefit of the Buyer.
  • In the United States, real estate agents need licenses to operate. The licensing laws of each state differ regarding how much education is required, the type and depth of licensing examinations, and whether continuing education courses are required once an agent becomes licensed. The licensing system was designed to ensure real estate agents are qualified to guide consumers through the maze of finding, evaluating and financing real estate.

Foreign buyers will also want to give consideration to issues such as currency exchange rates, international wire transfers, banking systems, multi-national taxation and accounting issues, and import/export restrictions regarding currency and household goods. It is recommended that you consult with an accountant and attorney before finalizing any transaction.

Foreign buyers are eligible to buy single-family homes, condominiums, duplexes, triplexes, quadru-plexes and townhomes. Housing cooperatives or co-ops often have rules prohibiting foreign ownership. That’s because co-ops generally require that a buyer’s source of income be from the United States and that most of the majority of the buyer’s assets be kept in the U.S.

Financing or Paying Cash?

Qualified foreign buyers with a 30 to 40 percent down payment can often obtain financing for their U.S. real estate purchases. MANY BANKS REQUIRE FOREIGN BUYERS to have a specific amount ($100,000 or more) on deposit with the bank while others set loan limits of $1 million to $2 million. You may also be required to present a minimum of three months of bank statements.

The U.S. home loan market offers an array of safe, affordable mortgages, including some that will allow Muslims to buy a home without violating Islamic laws against paying interest.

Before applying for a U.S. mortgage, you must first establish credit and earn a good credit score. You can start building your credit score by opening U.S. bank and credit card accounts. You’ll also want to be sure to report all income on your tax returns. Lenders use this income information to determine how much money they’re willing to loan you to buy a home.

While you don’t necessarily need to be a citizen or even have a green card to buy a home in the U.S., you will need an Individual Taxpayer Identification Number.

All cash purchases are permitted, but U.S. law mandates that cash transactions over $10,000 be reported to the federal government. The requirement for reporting involves everyone connected to the transaction (purchaser, real estate agents, attorneys and title companies). The government wants to know how you earned the money and that it was legally obtained. Cash buyers can potentially save money on mortgage application fees, loan origination fees, appraisals and title insurance.

Should I purchase U.S. property in my name?

Foreign investors can purchase property directly – in their own names – or through some sort of business entity, such as a domestic corporation, foreign corporation, limited partnership, joint venture, real estate investment trust or limited liability company.

How the property will be used should play into your decision. Additionally, the structure through which you purchase your property can have dramatic tax consequences. Your real estate attorney and accountant should be able to provide counsel concerning your options.

Do I have to travel to the U.S. for the closing?

While you may very well want to attend your real estate closing, it is not necessary. In the event that you cannot or choose not to attend your closing, you must execute a “Power of Attorney.” This is a written document authorizing another person to represent you and sign on your behalf.  Some lenders may require that you be present in the US to sign their loan documents.  This is something you should inquire about when selecting a lender if you do not plan on traveling for the closing.

How will a U.S. real estate purchase affect my taxes?

A foreign property owners’ tax liability in his home country will vary depending upon where the purchaser is from and whether that country has a tax treaty with the United States. Consult a tax attorney familiar with your home country’s treaty to get answers to tax-related questions.

The United States government requires that foreign nationals pay U.S. income taxes (state and federal) on any net income (rental revenues less expenses) received from rental property. If tax returns are not filed in a timely fashion, a tax of 30 percent of the gross rental income may be assessed. Even if you’re incurring losses in the early years of your investment and you don’t owe any taxes to the government, you still must file your tax returns in a timely manner or be subject to financial penalty.

What is FIRPTA?

FIRPTA refers to the Foreign Investment in Real Property Tax Act of 1980.  This ruling authorizes the United States to withhold income tax when property is sold, exchanged, gifted, transferred or liquidated by a foreigner. The Internal Revenue Service takes 15 percent of the proceeds and the state government will also take a percentage (if applicable). When a US tax return is submitted reporting the capital gains tax, if there is any refund due, that money will be refunded to the filer.

If the buyer of the home from the foreign national investor will reside in the home more than 50% of the time and the home sales price is under $300,000.00, the purchaser is not obligated to retain the 15% tax.