Connecticut Real Estate Journal

This journal is dedicated to all things real estate. Stay informed about local market trends, get tips and valuable news on buying or selling your home, mortgage and financing news, local foreclosures and short sales, and much more!

If you have a particular subject of interest that you'd like to read about in our journal, please contact us and we'll do our best to oblige your request... happy reading!

 - Mike Gregor | Realtor®

Sept. 28, 2014

What is Title Insurance?

What is Title Insurance and Do You REALLY Need It?

Like all other forms of insurance, the primary purpose of title insurance is to shift risk from one party (the home buyer) to another (the title insurance company) in exchange for a fee. However, unlike other forms of insurance, such as home, auto, or life insurance, the premium for title insurance is only paid once at the time of your closing.

Title insurance protects homeowners against losses resulting from matters affecting their title to real property. If you're buying your home with a loan from a bank, then chances are that the lender will require you to purchase a lender's policy that will only protect their interests. The good news is that buying an additional owner's policy is usually incredibly cheap, if you do so at the time that you purchase the lender's policy.

So what type of protection does title insurance provide? In a nutshell, it provides protection from any types of challenges to your right to enjoy your property without interference from others. For example, if your next door neighbor comes over to tell you that the awe-inspiring $80,000 infinity swimming pool that the previous owner had built in your new home is actually on your neighbor's land, your title insurance company would have to step up to defend your interests in court. This means that they'll cover all legal fees and should you end up suffering a loss as a result of any claims or actions, they will reimburse you up to the limits of your policy. Another example would be if someone comes out of the woodwork claiming that they have an ownership interest in your property.

This is especially true in today's real estate market that is saturated with bank owned foreclosures. As we saw in the news over the past few years, numerous legal challenges were popping up against lenders from borrowers who had defaulted on their loans, but who asserted that the lenders did not follow the law in executing the foreclosure process. If a lender forecloses on a property that is owned by more than one individual and they fail to serve the proper notice on ALL of the owners of record, the missing party could come back to file a claim later.

In the State of Connecticut, title insurance must be purchased from an attorney that handles real estate closings and there are a couple of difference coverage levels (standard & expanded):

The standard policy provides the basic coverages for persons desiring to protect their interest in the property. It insures the following:

  1. You are the true owner of the property.
  2. There are no defects, liens or encumbrances other than those that are listed in the policy.
  3. The title you acquired is marketable and cannot be rejected by a subsequent buyer as being impaired by some defect that existed at the time you purchased the policy.
  4. You have a legal right of access to the property from a public street or private right of way.
  5. The company will defend your title if it is challenged and will pay costs, attorneys' fees and expenses to defend you against any claims made against your title which fall within the coverage of the policy.

 

The expanded policy provides the coverages described in Paragraphs 1 through 5 of the standard owner policy description, plus the following coverages:

  1. Use of the land for a single-family dwelling is not prohibited by zoning/recorded restrictions.
  2. There are no pre-existing leases, contracts or options to purchase affecting your title or easements affecting your property.
  3. No work or materials were provided to your property before acquisition for which a lien can be filed.
  4. You cannot lose title to your property through forfeiture or reversion because of a preexisting violation of recorded restrictions.
  5. You cannot be forced to remove an existing structure on the property because of a violation of zoning or private restrictions or because no building permit was issued for the structure.
  6. There are no pre-existing violations of any recorded restrictions affecting your property.
  7. You have a legal right of access to the property by both foot and vehicle.
  8. Protection against loss involving: a) Ownership claims of others based on forgery before or after acquisition of title; b) Claims to divest you of ownership because of a pre-existing violation of restriction; c) Claims of others to limit the use of your property based on a recorded restriction; d) Refusal to fulfill a purchase contract, lease or make a mortgage loan because of prepurchase violation of restrictions; e) Someone else builds on your property; f) Inability to sell because of violations of subdivision regulations.

 

As you can see, there are countless ways in which title to your new home may be adversely affected, so getting a title insurance policy is good common sense, especially since the purchase of a new home represents the biggest single investment that most people will make in their life!

 - Mike Gregor | Realtor®

 

Posted in Buying Process
Sept. 21, 2014

How to Buy a HUD Owned Home for 50% Off!

Buy a Home for 50% of the Appraised Value via the Housing and Urban Development (HUD) "Good Neighbor Next Door" Program:

If you're a law enforcement officer, teacher, firefighter or emergency medical technician (EMT) and you're thinking about purchasing a new home to live in yourself, then you NEED to learn about a program offered by the Housing and Urban Development (HUD) agency called "Good Neighbor Next Door".

In an effort to strengthen America's communities, this program offers HUD owned single family (one-unit) homes to eligible participants at an ASTONISHING 50% discount!  That is NOT a misprint... if you're an eligible participant, then you can get a 50% discount off the HUD appraised value.  For example, if HUD lists a home at $100,000, you can buy it for $50,000 provided, you occupy the home as your personal residence for the required occupancy period. If you qualify for any FHA-insured mortgage program, your downpayment is only $100 and you may finance closing costs!

To find out more information, visit the following link: http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/reo/goodn/gnndfaq

 - Mike Gregor | Realtor®

Posted in Buying Process
Sept. 14, 2014

1st Time Home Buyer Checklist!

6 Steps to Your Home Purchase: A Guide for First Time Home Buyers

Buying a home can be a very overwhelming and stressful ordeal for most first time home buyers. Unfortunately, the vast amount of information that's readily available in today's fast paced world doesn't make things any easier! In fact, home buyers are increasingly faced with conflicting information, tips, and advice, often from sources who are motivated by their own hidden agenda.

The good news is that buying a home, even for first time buyers, can be a very smooth and rewarding experience, assuming the buyer is working with the right team of professionals. Here are the basic steps to buying your first home:

  1. Get pre-qualified for a mortgage: This is one item that most home buyers neglect to do, resulting in false hopes, lost time for everyone involved, and disappointment late in the game. Once considered a "good idea", getting pre-qualified for a loan is an absolute must in today's market. All banks that are selling foreclosure properties and most private sellers are demanding either a pre-qualification letter, or proof of funds for cash purchases, before they will even review and respond to any offers! Don't waste your time scouring the internet for free calculators and affordability guides. A competent mortgage lender will have information on all the latest programs available (and they do change quite often nowadays!) and can direct you to what makes the most sense for your particular situation. Plus, if you have some credit issues to resolve, they can often make great suggestions on how to do so in the least amount of time!
  2. Find a great real estate agent: The right buyer's agent is an integral piece of the whole buying experience. Home buyers should look for an experienced agent who is very knowledgeable on the local market trends and conditions. The right agent will always put their client's interests above their personal desire to earn a commission. The good news is that you've already come to the right place!
  3. Decide what you want in a home: First time home buyers often have unrealistic or unclear expectations of what they want vs. what they really need in a home. The best strategy is to make a list of absolute needs (i.e. location, number of bedrooms, size of the home and lot, etc.) and build your preliminary list off these criteria.
  4. Go look at some houses: Once you build a preliminary list of potential properties that meet your absolute requirements, go out and look at several homes. In doing so, you'll get a better understanding of what you like and what you don't really care for... you may even surprise yourself!
  5. Make an offer: Most first time home buyers are afraid to pull the trigger even when they find the "perfect" home that meets most of their criteria. When you find a home that has most of what you're looking for within your budget, you should not hesitate to make an offer. First determine the maximum amount you're willing to pay and submit your preliminary offer. A good agent should be able to provide good input on a suitable starting price point, based on recent comparable sales data, as well as overall local market trends. Don't forget to stick to your predetermined maximum price and not let yourself get too emotionally attached to the property.
  6. Select a competent attorney: Having a competent attorney to represent your interests is always a good idea, but even more so when you're a first time home buyer! Your attorney will ensure that your interests are protected and in addition to reviewing your contract, they will be able to provide valuable information on important items such as title insurance.

 

My team and I are ready to assist you with the purchase of your home. We can put you in touch with competent mortgage lenders, attorneys, and home inspectors that we've worked with in the past in order to ensure that your transaction goes as smoothly as possible!

 - Mike Gregor | Realtor®

 

 

Posted in Buying Process