How to Avoid a Delayed Closing

The purchase of a home becomes much more real after an offer has been accepted. It’s at this point where a lot of the gears involved in a real estate transaction begins to turn. From appraisals and home inspections to title searches and financial considerations, there is a lot to get done in short order. It also means that things can go awry and a delayed closing becomes a possibility.

Some minor issues can cause little to no delays. Other issues can stop the process entirely and cause weeks or perhaps even indefinite delays. For example, if a buyer has already sold their existing home, a delayed closing can essentially put them in a state of homelessness. With new jobs, school, moving trucks and furniture/appliance deliveries all lined up, a delayed closing can be both emotionally and financially taxing.

We’ve identified several issues any buyer should keep an eye on which can cause delays. The sooner they are spotted and handled, the faster a closing can get back on course.

Financial Issues          

Most homebuyers require financing to buy a house. It is up to the buyer to ensure that little to nothing changes with their financial picture between a pre-approval and the date of closing. Income sources should remain intact, and large purchases where additional financing is required, such as a car, should wait. These types of changes can throw off the calculations that lenders use to determine your ability to pay them back, and a bank can pull their offer to extend a loan as a result.

Be up front with your loan officer and ensure that your proverbial house is in order. Ensure there are no back taxes, past due child support payments, etc. which might trigger a lien on your income. If something changes with your job status or overall financial picture, ensure you reach out immediately to explain the situation to avoid a delayed closing.

Appraisals

A significant step in any real estate transaction is the appraisal, which determines the value of the property at hand. Issues can sometimes arise when an appraisal comes in lower than the agreed upon purchase price. This is because lenders work with the appraised value, not the purchase price. Any number beyond the appraised value needs to be negotiated between the buyer and seller, which can add complexity to a closing.

Inspections

Inspections are performed for the benefit of the homebuyer to ensure that the home is in livable condition and does not have any health or safety concerns, such as structural damage, electrical/mechanical issues, mold, etc.

Inspections can reveal significant issues which need to be negotiated between the buyer and seller. In extreme cases, issues like mold, structural issues or roofing repairs can take weeks, if not months, to sort out.

Title Issues

Any real estate transaction should have a comprehensive title search performed. This process will ensure that there is a clear title on the home and that there are no liens, tax issues or claims against a property which might delay the transaction from taking place.

Along with a survey, the title search can also reveal any easements or other issues which might cause a delayed closing

Home sale contingency

A common contingency in a residential real estate transaction is an escape clause for the buyer should the sale of their current home fall through for any reason. These are often used as the buyer needs the proceeds from the sale of their house to close on the new home, or they simply cannot cover the cost of two mortgages.

The buyer’s ability to navigate their home sale is critical in these transactions – any delay can put the new home purchase on hold. As an aside, for properties with multiple offers, a seller can look for offers with these types of agreements and choose to avoid them. Any ability to remove this requirement from your offer will help to avoid delays and make your offer more attractive to sellers.

Final Walk Through

A final walkthrough is performed by the real estate agent and the buyer, typically the day prior to or the day of closing. The purpose is to confirm that agreed upon repairs have been performed and that the home is as expected.

This also creates an opportunity for delays. For instance, the seller may have agreed to certain repairs based on the home inspection and didn’t do them. Or, they may have specified that all kitchen appliances would stay in the home but they are now gone.

If you experience a delay in a home purchase, don’t be too alarmed. Indeed, about 25% of all real estate transactions experience some sort of delay. The best thing any buyer can do is to stay involved in the process, communicate often, do their part to smooth out any potentially bumps in the road and to be mentally prepared for delays.

Principle Abstract works tirelessly for homebuyers to ensure that their purchase is in order and that any threats to a timely transaction and is properly communicated and handled. Trusted by dozens of area agents and lenders, Principle Abstract prides itself on our attention to detail and ability to navigate any title issue at hand.

For more information or to get started on a real estate transaction, contact us today.

What are Deed Restrictions?

Title searches can often unearth deed restrictions that are placed on a property. Also known as restrictive covenants, deed restrictions are one of the more interesting topics when it comes to real estate. They’re pre-adopted rules baked into the deed that the owner of the property must follow and adhere to. These restrictions are legally binding and can include:

  1. The payment of dues, homeowners’ association fees or the like.
  2. What color the dwelling can be.
  3. How the property can be landscaped.
  4. How the property can be used (for example, where visitors can park, fencing, decoration, garden beds, etc.)
  5. What types and size pets the owner can have.

For example, unknowing homeowners may assume that certain maintenance, such as street lighting, is handled through property taxes. They might also assume that they can adopt a large breed dog. They may also make considerable investments to the home, such as painting, only to be forced to revert to an original color or to a color from a pre-approved palette. If the homeowner requires a space to park a project car or an RV, for instance, these restrictions can be devastating. These owners may soon be surprised with a bill for dues a fine and/or a cease-and-desist order for not abiding by the deed restrictions placed on their property.

The same can be true for buyers looking to buy an empty plot. In this case, deed restrictions can include how big of a home can be built, how many garages or outbuildings can be erected (and their size,) or the ability to install a pool.

Of course, many deed restrictions are obvious, especially if the property at hand is in a planned community, such as an adult living development or community that might maintain a clubhouse, tennis courts and/or pools. They may also handle upkeep like landscaping and snow removal. These types of communities almost always have an HOA and their associated dues and are often seen (and positioned as) a benefit to living there. Indeed, deed restrictions are intended to increase and maintain property values in the area.

The issue comes when they are unexpected and prevent a buyer from using the property as they intended.

That is where a thorough title search comes in. Any deed restrictions will come to light during a title search, whether they are in place and enforced by an HOA, a municipality, etc. This will protect a buyer from purchasing a home that they won’t be able to use as intended or be responsible for costs they were unaware of.

Principle Abstract has years of experience performing comprehensive title searches for homebuyers. If there are deed restrictions attached to a property they will be uncovered and disclosed, ensuring our clients aren’t blindsided after their purchase.

Interested in purchasing a home? Give our office a call and a member of our team can assist you.

The Who’s Who at the Closing Table

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.

4.5 Things You Need for a Virtual Closing

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.

Phishing Scams in Real Estate Transactions: A Paramount Concern

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 3rd 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.

Why Your Closing Date Makes a Big Difference

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.

Save on Your Home Purchase or Refinance

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:

  1. Appraisal fees
  2. Surveys
  3. Title search/binders
  4. 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.

Do You Know the Most Common Title Search Issues?

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.

Title Insurance on New Construction? Yes.

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.

Property Settlements in the Midst of a Pandemic

The pandemic continues to hold a firm grip on the world and has impacted all of our lives in significant ways. While we all personally do our part to help curb the spread of coronavirus through the use of masks, sanitizers and social distancing, the pandemic is mostly out of our control; and so we must adapt.

Companies must also adapt; and they have. Restaurants now offer curbside pickup or even delivery. Many companies have switched to remote working and healthcare has seen a significant shift to telemedicine. Real estate and the various industries that it involves have also found ways to adapt.  

What We Are Doing to Help Our Clients During the Pandemic

Principle Abstract has taken several measures over these past few months to not only help facilitate the closing of real estate transactions, but to also ensure that everyone involved are as safe and comfortable as possible.

Drive Through Settlements

Over the past several months, we have helped dozens of clients close from the comfort of their own vehicles. Clients remain in their cars as paperwork is passed through the windows, where documents are then signed and processed in an organized and seamless process.

Outside Settlements

We have also performed dozens of settlements in an outdoor space, such as a park, so long as weather permits. The present parties can either sit or stand at a table and process the paperwork in a comfortable, open-air setting.

Driveway / Garage Closings

If agreed to, the property location itself is a viable option for closings. We’ve performed many closings right in the driveway or in an open garage, allowing for plenty of space with adequate airflow to keep all parties safe.  This option has been quite convenient, particularly for moving day closings and can save a lot of time and travel for everyone involved.

Traditional Closings

We continue to offer our office as a location for settlement. Of course, all recommended precautions are taken to ensure a safe visit to our office, including face masks, hand sanitizers and frequent office disinfection.

No one was handed a manual on how to deal with or thrive in the midst of a global pandemic. Yet so many people and companies have done an admirable job to learn and adapt to our current realities. This is particularly true for industries where little can be done. Principle Abstract is proud to count itself among the companies that have embraced these necessary changes from the onset to ensure that our clients are both safe and comfortable.

If you are interested in our services or would like more information on our disinfection procedures during the pandemic, contact our office today and a member of our team will be happy to assist you.

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