Different Types of Liens and What They Mean

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One of the most important objectives in any title search is to check to see that there are no liens on the property at hand in a real estate transaction. Liens are a legal right to property (more specifically, it’s value) by a 3^rd party attempting to collect on a debt that is owed. They can derail real estate transactions and cause misery to unprotected buyers who find out after the fact that there was a lien on the newly acquired property.

Simply, liens do not go away if an owner sells the property. These 3^rd party collectors have a legal right to the property, and they can and certainly will exercise that right.

In this blog, we discuss the common types of liens title insurance agencies will come across.

Mortgage Liens

Mortgage liens occur when a property owner uses their property as collateral for another loan. Should the owner of the property default on that loan, the lending bank is within its right to reposes the home and put it in foreclosure in an attempt to recover funds.

In this instance, there may not be just one lien. There can be personal loans, second mortgages, home equity lines of credit, etc., meaning that multiple parties will want to vie for the equity that is locked in that property.

Tax Liens

Tax liens can be placed on a property due to a failure to pay taxes. This can include property tax and/or income and business tax. Tax liens are not always easy to find on a property and can be particularly tricky to settle. Unsuspecting owners can fid themselves in a complex web of issues if they inherit a property with a tax lien on it.

Child support and Alimony

Property owners who owe a substantial sum in court ordered child support or alimony can find themselves with a lien. Furthermore, issues can arise if the property is being sold without the consent of an estranged spouse. That spouse can put a lien on the house in an attempt to recover funds.

Mechanic’s Lien

A mechanic’s lien comes up when a property owner fails to pay for work performed on the property at hand, usually for non-payment of material and/or labor. Even sub-contractors hired by the general contractor (GC) have a legal right to place a lien on the property. For example, if a GC hires a plumber to install all new plumbing in a home and the GC fails to pay the plumber, the plumber is within his rights to put a lien the property.

Title insurance exist largely to protect clients from liens and other issues that might spring up over the course of a real estate transaction. For this reason, title insurance is essential to anyone buying property. Without it, any claim against that property can mean having your property pulled right out from under you.

Principle Abstract has an exceptional track record of ensuring that a property has been removed of potential threats against ownership. Ready to get started? Contact us today to get started.

September 1, 2021

The Who’s Who at the Closing Table

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A closing is the culmination of a whole lot of work involving multiple parties over the course of several months in most instances. Between the real estate professionals, title agencies, lawyers, etc., people often ask who actually shows up at the closing table for a real estate transaction. There are some folks who one can bet will be there for nearly every transaction. Others involved in the transaction may be there but are not required.

In our latest blog, we list the people who have a seat at the closing table when a closing takes place.

Buyers

It’s no surprise that buyers will be at the closing. After all, they are the ones signing all the paperwork and taking possession of the property at hand. Their identities are always confirmed at the time of the closing to ensure they are indeed the appropriate party signing the documentation. That said, proxies can be assigned during real estate transactions, and that is handled well before the day of the closing.

The Buyers Agent

The buyer’s agent is almost always at a closing. They represented the buyers throughout the process and it’s their job to ensure that the buyer’s best interests are met at the time of the closing. Once the transaction is finalized at the closing, their job is done.

The Listing Agent

The listing agent who helped the sellers with their real estate sale will be at the closing. The listing agent ensures that their client’s best interests are met and that the transaction settles smoothly and as expected. At this point in time, they are paid their commission for their part in selling the property.

Escrow Officer

The escrow officer is an employee/representative of the title agency involved in the real estate transaction. They have helped to manage all the paperwork leading up the closing and are responsible for a smooth transaction. This includes ensuring that all parties are aware of each step of the process, what each party is signing, and ensuring that each document is properly executed and recorded.

Those Less Likely to Attend

The Sellers

The Sellers may be present at a closing, although their interests are already being represented by their agent, as mentioned above. Often, a seller may not be in the area to make a closing, having already moved out of the property they are selling. Alternatively, they might live far away but are representing an estate that they are tasked with settling, An example would be an individual selling their parent’s home after they’ve passed away.

Mortgage Broker

A mortgage broker is not often present at the closing, although there are a few reasons why they may want to show. This can include a settlement which was particularly difficult to negotiate, or to simply meet/see the parties at the closing. Ultimately, however, they have no specific role at the time of the closing and most questions or issues involving the transaction at hand would have been handled before the closing was confirmed.

Legal Representative

A representative from a law firm involved in the transaction may be present under specific circumstances. Their likelihood of being at the closing table increase if the transaction at hand includes a trust, if a probate court is involved in any way, etc. Otherwise, don’t anticipate the presence of any legal professional involved in the transaction.

In all, a closing should be a fairly smooth process. By the time the closing is scheduled and paperwork ready, all issues and questions would have been thoroughly uncovered and addressed. Other than the essential parties listed above, the others have satisfactorily completed their job so that the transaction can proceed without their presence at the closing table.

Principle Abstract is committed to representing the needs of the buyer. If you are interested in buying a home or refinancing, visit our website or give our office a call and a member of our team will be happy to answer any questions you have.

August 10, 2021

How to Maintain Privacy on Public Land Records

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Sales involving property become part of public record. The deed that is recorded with a town and/or county becomes information that sits within public domain. In other words, virtually anyone can quite easily search for your property, either online or in a hall of records where such documents are kept and find your name, eliminating privacy.

Some situations arise where homebuyers require that their names are kept off record. The reasons can be quite varied and while not common, it is something that becomes a necessity during a real estate transactions.

There are several routes that a real estate buyer can take to ensure privacy is maintained on a purchase. In this blog, we explore some of them.

Revocable Trust

According to Investopedia, a revocable trust is a ‘part of estate planning that manages and protects the assets of the grantor as the owner ages.’

By vesting a title within a revocable trust, homeowners can achieve privacy in a pragmatic way. Most homeowners need financing, and revocable trusts can obtain financing from a lender. The result is a home sale where the trust is listed as the buyer rather than the names of the parties that the trust pertains to.

Limited Liability Company

It is possible to purchase property through a limited liability company (LLC.) to preserve privacy. This is not very common, however, since it is harder to secure a loan as an LLC and most home buyers require financing. The caveat here is if the transaction is being handled in cash where financing has been removed from the equation or if the property at hand is commercial property.

Realty Trust

Realty trusts are another tool that buyers can use as a way to purchase real estate privately. They are quite similar to LLCs in that they are mainly used as part of a cash transaction or by commercial property buyers (including buyers interested in rental units.) Like LLCs, realty trusts can also have difficulty securing financing. If a buyer is solely interested in privacy, it is unlikely this will be the preferred route to maintain privacy.

No matter your reason for privacy and how you decide to proceed, it is essential to seek the advice of an accountant and seek legal counsel. No decision should be taken without deep consideration and consultation with professionals to ensure you are proceeding in a way that preserves your best interests. Not doing so may result in serious legal, financial and/or tax consequences.

Principle Abstract is one of the area’s most trusted title insurance providers and conduct each transaction with the interests of the buyer in mind. If privacy is a priority to you on an upcoming real estate transaction, give our office a call and a member of our team will be happy to assist you.

Ready to get started? Give our office a call today.

July 17, 2021

4.5 Things You Need for a Virtual Closing

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The pandemic has unquestionably changed the way we work, travel and shop. It has also changed the way we purchase homes. Over these many months, the real estate industry has also had to adapt to a new way of working. As pandemic restrictions subside, many of these adaptations remain, largely for the better. This includes virtual closings.

Traditionally, closings were in person at a mutually agreed upon location and all documentation prepared for the closing would be reviewed and signed by the present parties, whether it be a property transaction or a refinance.

Virtual closings have now become more normal, allowing the necessary parties to log in from virtually anywhere to navigate the closing process both quickly and securely.

If you are a homeowner and will be conducting a closing virtually, or you’re a real estate agent assisting a buyer with a virtual closing, these tips will come in handy as the day approaches.

Devices

You should choose a device that will allow you to view documents clearly, and also has a working camera and microphone. Most folks will leverage an iPad or other form of laptop for their closing as well as a desktop if they have the camera and microphone set up.

Smartphones may be suitable, but the screen size can make things hard to read and cumbersome. Try and avoid reliance on your smartphone on closing day.

Additionally, ensure that the audio and video functions are working and/or enabled and ready to go for closing day. Most devices have privacy settings that you can enable leading up to the time of your closing to help move things along. Last minute tech issues can add unnecessary frustration and anxiety that can be easily avoided.

Wi-Fi

Closings have a lot of steps and unreliably internet, lagging, and spotty audio can really slow things down and create opportunities to miss information.

Ensure you are at a location with a reliably strong and fast internet connection. The programs used to stream closings, as well as screen sharing and video, can take up quite a bit of bandwidth. Try and avoid public wi-fi which is often inconsistent and not as fast as a home connection. Also try and disconnect any other devices that use up internet bandwidth.

Paperwork

Always ensure you have identification on hand in the event that it is required. You should also have any documentation you have that has been generated in the lead up to your meeting available or already open on your device for quick reference. This will help speed things along and allow for a smooth transaction.

Atmosphere

Come settlement day, ensure that you have access to quiet space to ensure there are no distractions or issues hearing the proceedings. If you have pets or children, do your best (believe us, we understand both can be loud and unpredictable!) but try and control what you can, such as outside noise, music/tv in the background, etc.

You will also need to be prepared to be on camera. With this in mind, consider attire and background for your closing that meet your own expectations. In other words, don’t be caught off guard and suddenly feel compelled to change and/or tidy up at the beginning of the meeting. Simply come prepared and comfortable with your appearance/surroundings.

Celebrate

Be prepared to celebrate! In most cases, a real estate transaction is a big milestone. Just because you are not physically out signing your paperwork doesn’t mean you can’t toast your accomplishment. Many folks opt to head out for a round of drinks and/or dinner after a home purchase or race over to their new property with a bottle of champagne. And you certainly can! Whatever you decide to do to celebrate, don’t let a virtual closing take that away from you.

Principle Abstract has been conducting virtual closings along with in person closings throughout the pandemic and see them as part of the norm going forward.

If you have any questions about virtual closings or wish to get started on a real estate transaction or refinance, contact our office today and a member of our staff will be able to assist you.

June 3, 2021

Phishing Scams in Real Estate Transactions: A Paramount Concern

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This day and age, virtually everything is digital – from the way we shop and socialize to the way we get the news and binge watch shows. As a result of the pandemic, even more of our lives have become digital. This includes things like concerts and business meetings but also tasks like banking and home closings.

The last two are particularly important because it was only until recent when tasks like mobile check deposits or signing legally binding documents have been broadly accepted and ‘normalized.’

Thankfully, companies have largely stepped up and ensured that our online experience, especially ones involving the transfer of money and sensitive documentation has been largely secure and seamless. Our company is one of them.

Despite all this, the bad guys continue to lurk. With every step forward into the digitization of our lives comes new opportunities to scammers and hackers to exploit any potential vulnerability.

No industry is immune – even real estate.

Over the course of a typical real estate transaction, there are multiple parties, people and procedural/transactional steps that take place. Many of these include wire transfers (most for fairly high dollar amounts,) and the transfer of sensitive documentation such as bank statements, tax documents, investments, addresses, telephone numbers, etc.

It’s easy to see how a real estate transaction is an attractive and potentially lucrative target for scammers participating in phishing attacks.

Phishing attempts happen to be the most common. This is when a hacker finds their way into the accounts of a lender, bank or real estate agent and pretends to be a representative of that company. They will try and convince folks to send along bank information, credit cards, passwords, etc as a way to gain access into other people’s information.

If any user gets a wire request or any request for information that is outside of the typical way of requesting information, pause and reach out to your lender or agent. Additionally, never email any passwords, credit card information, social security numbers or anything that can be leveraged be a scammer.

Should you get any email from anyone involved in your transaction asking for any information or wire money, question that emails legitimacy. It’s always worth asking if the request is legitimate. Even if it does happen to be a legitimate request from that sender, refuse and find a more secure way to pass that information along, either through mail, fax, or a 3^rd party encrypted file sharing platform.

The team at Principle Abstract considers our client’s security as a top priority, now more than ever. As a company that operates in this industry, we have a moral and business obligation to ensure that all information is secure from phishing attacks and that the reputation of our industry at large remains intact.

If you have any questions on how Principle Abstract keeps your information secure during real estate transactions, give our office a call.

March 30, 2021

Why Your Closing Date Makes a Big Difference

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There are countless steps in a home purchase or a refinance that folks need to navigate. By the time the topic of a closing date comes up, it’s easy to succumb to fatigue or anxiety and just confirm the first available date to get it over with.

Yet your closing date is quite important and can impact the entire closing experience both financially and administratively.

Should I Close on a Friday?

Fridays are typically the most sought-after date for a close. Work tends to be lighter that day, and many opt to take the day off to celebrate, spend time in their new home (if they are purchasing,) and to give themselves a 3-day weekend.

Yet Friday can come with significant delays. For the reasons stated above, there are typically more Friday closings than on any other day of the week, which means that title companies and lenders alike are busy with paperwork, closing the books on all the transactions at hand, etc. If there are any delays, it’s likely your closing will get pushed through the weekend and into the following week.

This is likely not ideal if you have prepared for an on time closing by requested time off from work, move, made plans to meet with contractors, etc. It’s worth trying to make a mid-week close work and allow some buffer time between your closing and your first big weekend with your property.

If you do need to close on a Friday, voice your desire to close early in the day. If any issues arise with walk-throughs, etc., there is still time in the day to get the closing accomplished. Additionally, giving the balance of the day for title agents and lenders to carry out wire transfers and the like will additionally speed things up.

Avoid the Last Few Days of the Month

For several strategic reasons, it’s smart to close well before the end of the month. For one, a purchaser pays interest in advance for the balance of the month, so the cash to close figure remains lower in the earlier days of the month.

Another reason to eye a closing earlier in the month is that buyers typically skip that first month’s payment. This can come as a relief to many who can take a breath after a large transaction, allow the dust to settle, and recover some cash that would otherwise go towards your mortgage payment.

It also takes some time for lenders to send out information/welcome packets, instructions on how to pay that first payment, etc. This allows for a more relaxed transition with plenty of time to get acquainted with your new lender.

Principle Abstract and Settlement Services works with each of our clients to ensure a smooth transaction, but also a well informed one. If you have questions or goals concerning your closing date, feel free to ask and we can work towards it. At the end of the day, all parties involved want a smooth, on-time transaction. We will do everything we can to ensure that happens but also let you know of any issues that come along which may impact that goal.

Interested in learning more or have a home purchase or refinance you are working on? Contact us today and a member of our team will be happy to speak with you.

March 3, 2021

Safety and Privacy Concerns During Real Estate Transactions

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Real estate transactions, whether you are buying, selling or refinancing, requires a lot of access to your personal life. This takes the form of physical access during open houses, home showings, etc. It also takes the form of digital access due to the types of paperwork required to close a transaction. These can include bank statements, forms of Identification, paperwork containing social security numbers, etc. No real estate transaction should come at the risk of any breach in privacy.

In this month’s blog, we discuss the steps you can take to ensure that your data and privacy can be better protected.

Physical Documents

Physical documents are often printed out and stored in various locations within someone’s home. Hopefully, that includes a safe or locked filing cabinet at a minimum. Yet during an active transaction, such as a home sale, it’s easy to lose track of or leave out paperwork that is being generated. Coupled with regular home showings and open houses, it’s easy to leave your privacy in a vulnerable state.

Steps to Consider:

Ensure you are consolidating all your paperwork in a single location. Try not to leave paperwork on a printer tray, for instance.
When not reviewing the paperwork, set it aside somewhere out of site – or better, locked away in a safe or in a locked filing cabinet or desk drawer.
Once you’ve digitally scanned and/or no longer have use for a particular document, destroy it in a shredder.
Don’t leave documentation in a car overnight. It’s easy to leave a briefcase in the back seat of your car – it’s worth the chore of running back to the car and grabbing it to keep your overall risk down.

Digital Documentation

While the internet has made storing and sharing documents a lot easier, your digital environment is vulnerable to hacking and other forms of cybercrime and proper care should be taken to ensure that your documents are well protected.

Steps to consider:

Password protect sensitive materials if at all possible (keeping your password in a safe place.)
Properly name and file your documents so that they are not lost within your computer and forgotten.
Do not leave documents that are no longer needed in your recycle bin.
Create backups of your documents via a physical memory source like a USB hard drive or cloud storage solution.
Do not leave sensitive information in an email client.
Be extremely cautious when sending information over email.

Work with Reputable Professionals

Working with reputable and well-established professionals will make all the difference. Real estate agents should be quick to coach you on many of these topics and will have security protocols in place to ensure that documents are being properly stored and protected between all parties involved. The same goes for lenders and title insurance professionals, most of whom should have secure file sharing services that allow their clients to safely upload and organize all the required documents, collect all signatures, etc. It’s in all our best interest to ensure and maintain a high level of trust.

Any of the professionals involved with your transaction should be able to clearly and thoroughly answer questions about their data and privacy mitigation procedures and consider it a paramount priority.

Principle Abstract and Settlement Services only works with the area’s most highly reputable agents and lenders, and works tirelessly to ensure that our information is properly stored and maintained. If you would like to learn more or would like to get started on a real estate transaction, contact us today.

February 1, 2021

Save on Your Home Purchase or Refinance

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Save on your home purchase or refinance

Real estate transactions can often appear daunting, especially for a first time home purchase. There are many steps, an onslaught of forms, disclosures, releases and contracts to sign throughout the mortgage application process and then there is the closing itself.

For many, it’s easy enough to glance through the paperwork and/or pass it off to an attorney without looking at the fine details. The impulse to simply get through the process can be strong!

Perhaps the worst kept secret with real estate transactions is that at the end of the day, many of the parties involved, from the lender to the real estate agent and any lawyers are primarily interested in one thing – that the deal closes. After all, that’s when everyone gets paid.

There is nothing wrong with that.

The bigger point is that no one is going to stick up for you and the dollars you spend more than yourself. For this reason, you owe it to yourself to pay close attention to the fees that are charged and within your control, and to stick up for yourself. People do this when shopping for cars and other large ticket items. Why not something as big as a home purchase?

In truth, most loan estimate forms are identical, and once you have one from a lender and know how to read it, you can potentially find several hundred dollars in savings.

Shop Around

As the loan estimate form is pretty much standardized, once you have one you can go and shop around with lenders – see if their fees are competitive compared to other area lenders. There will be a section that says, ‘Services you can shop for,’ and it quite literally spells out where you can shop for competitive pricing.

Some of the line items can include:

Appraisal fees
Surveys
Title search/binders
Settlement agent

Title insurance is often the most expensive of closing costs in this list, but you may be able to soften the blow by shopping around.

Lender Fees

Some lenders can include excessive fees, sometimes with vague, non-descriptive names. It’s within your right to ask about them to better understand what these fees are and what a lender might be able to do to reduce or remove some of them.

No Closing Cost Mortgage

You may be able to close on a home purchase with no closing costs if cash is tight. Keep in mind however that the total cost of closing on your loan will be folded into the total loan amount and will increase your monthly payments. Still, if cash is tight or your money is better served doing renovations on the home, as an example, it may be the right choice for you.

Ask for Discounts

As the adage goes: The squeakiest wheel gets the most oil. In this case, it simply doesn’t hurt to ask your bank for any discounts. For instance, if you are a long-time customer of the bank you are getting your mortgage through, they may have programs or incentives that may help you reduce your closing costs or even reduce your rate for you home purchase.

A Title Insurance Service You Can Trust

You do not need to use the title insurance company that the real estate agent provides by default, and buyers are well within their rights to shop around for title service.

Principle Abstract and Settlement Services is an independent title insurance agency that works solely in the interest of our clients. For more information or to get a competitive quote for our services, contact us today.

January 8, 2021

Do You Know the Most Common Title Search Issues?

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A title search should be conducted to uncover any potential issue before a purchase takes place. This is true for land, residential or commercial transactions. It is also required during refinancing.

Title issues can come from several areas, and the consequences of not having a thorough title search can have real consequences, including lengthy and expensive legal exercises, the inability to use your property the way you wish to use it and more.

Below we list the more common issues that could come up in a title search.

Will Issues

There are several scenarios where wills can cause major issues when it comes to property ownership. For example, a person may die with no known will, heirs, etc. That property may subsequently be sold by a state or local government, only for a will to be uncovered years later. Any listed heirs may be able to challenge the ownership of that property and jeopardize your legal claim to it.

Similarly, disputing estates who wish to dispute an inheritance, for example, can later claim ownership rights of named properties. These issues can form well beyond the closing date of your home.

Liens

It’s not always clear what the financial position of a seller may have been or what outstanding debts may have remained after the sale of a large asset like a home or building. Entities may choose to place a lien on the property in question in an attempt to recover that debt.

Survey disputes

While most properties have a survey on file, not all surveys are accurate, or other surveys conducted by neighbors may produce different property lines. This can especially be true with older homes where surveys were not standardized and might reference landmarks such as a rock or a tree that are long gone. These issues may allow neighbors or towns to lay claim on a portion of your land.

Along the same line, easements may exist on a property that may impact your ability to use the land or building as intended. For instance, you may have a water main under your property that would not only allow the utility company access to your land but will prevent you from building a shed, garage or driveway over it, as examples.

Public Record Issues

Another common issue can be issues with public record. These errors can alter surveys, deeds and more which can negatively impact the value of your home.

Illegal Documents

Unfortunately, property transactions can take place using falsified information, forgeries, etc. They can also be made by individuals who are not in a legal position to do so. This can include undocumented immigrants, minors, or individuals that are deemed mentally unfit to enter any legal agreement, as examples.

Title searches help to uncover all of these issues before any transaction, allowing buyers to move forward with their investment with confidence.

Need title work done for a residential of commercial transaction? Give our office a call and a member of our staff will be happy to assist you.

December 2, 2020

Title Insurance on New Construction? Yes.

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The real estate market has been a perfect storm of sorts in 2020. Record low interest rates have people buying or refinancing at a record pace. This is coupled with large population movements due to the pandemic as people flock from urban centers for either a change in lifestyle or as their professional life goes more virtual. The greater Bucks County area has become a desirable area as a result.

The issue becomes a matter of supply – there are not enough existing homes to satisfy demand so many have turned to new construction.

A question that is often raised is whether or not title insurance is required on new construction. The short answer is: Yes.

The Dwelling is New but the Land is Not

Whether the dwelling is being built on a lot or is part of a bigger development project, the land that it is being built on has a history of being bought and sold over time. Conflicts or claims of ownership are just as much a possibility as it would be if there was already a dwelling on site.

Developer and Builder Issues

Development communities involve a lot of parties to prepare the site and complete development. It takes excavation companies to prepare the site, contractors to install the various utilities such as power, sewer, etc and finally the homebuilders themselves. With all the hands involved in the overall development project, it’s possible for legal or financial issues to arise. The result could mean liens being placed on the developer. Title insurance protects homebuyers against any subsequent issues between the developer and the various parties that were involved in the development of the community.

Administrative Issues Down the Road

An often overseen fact is that the value of your title insurance lasts for as long as you own your property. This will come in handy should there ever be an issue such as the ones already mentioned above but also against any recording issues with the deed.

Title Insurance Offers Piece of Mind

Whether you are refinancing or buying a property, title insurance offers piece of mind. Real estate is almost always one of the largest investments anyone can make and nothing should be left to chance.

Principle Abstract and Settlement Service takes the role we play in your investment with the upmost care, ensuring that there are no issues with the property involved. And as an independent provider, we work to ensure that the interests of the buyer is at the forefront.

Interested in buying a plot to build your home on or purchase a new construction home? Give our office a call to speak with one of our representatives.

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