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Buyer Beware, at Tax Deed Sales Anyway

Posted by Chris On October 20

It’s that time of year . . . you know . . . to be scared of scary things. We see a lot of scary things in real estate . . . a lot of scary things. But it’s our job to shield you from those menacing figures. If my 10 year old daughter were writing this, she would say that in Harry Potter terms, we are the Patronus that casts away real estate’s Dementors. The spell we’re casting here is to warn you about the pitfalls associated with purchasing a tax deed. Although tax deed sales can be lucrative investments, they bear with them a certain element of risk.

Tax deed sales in a nutshell:  Owner of real property fails to pay property taxes. Third party investors buy “tax certificates,” which they do so that they may collect a bit of interest on the payment. Those certificates, if not redeemed, can after time result in the investor’s application for tax deed. That application, under certain circumstances, results in a tax deed sale and the investor earning the “deed” to the property. Give us a call if you want more details. Again, nutshell version here.

The point of this post is to give you very useful insight into what tax deeds look like from our wizardly title insurance perspective. After all, if you purchase a tax deed, you’re likely interested in selling the interest in the property at some point. At that point, you’re going to have to jump through some hoops in order to do so in such a way that is acceptable or marketable, as we say, to a savvy buyer. Here are those steps and what they could mean to you or your investor clients.

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Wiring funds when buying a home

Posted by Chris On February 13

By Chris Black, Esq.

During the closing process, who doesn’t want to reduce costs and shorten steps whenever possible, right? To this end, many of our customers ask us about wiring funds for both escrow and total closing costs together. This is a great question that likely results from people’s interest in avoiding multiple wire fees or in wanting to avoid multiple trips to the bank. We get it.

Ordinarily, if a consumer wires funds to us, they are charged a fee for that service by their bank. (Note: Winged Foot Title’s current bank does not charge for incoming wires so we do not need to pass along such a charge to the consumer.). And, in most cases, consumers must be physically present at a bank branch in order to initiate the wire. So, we totally understand the desire to avoid additional fees and trips to the bank. From our perspective, a buyer client who is paying cash for real property in Florida could certainly wire their earnest money simultaneously with what they estimate to be the required amount due at closing. Here are a couple of things to consider when doing so.

First, please notify us of your intent to wire the funds together so that we may account for them properly. Along those same lines, your notification should specify the amounts and their intended use. For example, if your earnest money requirement is $1,000 and you wire $125,000, please make sure that you communicate to us how the wire should be applied.

Second, it will be difficult or impossible to have an exact amount required for closing at the time your earnest money is due under the terms of your contract. That would require you to send an estimated amount, which if more than necessary we would refund or if less than necessary would require an additional wire transfer for the amounts outstanding.

Lastly, you should discuss your intent with your legal counsel or REALTOR®. There are potential issues with wiring all of your funds at one time and they may advise against it.

Want more tips for making your closing process a snap? Sign up for invitations to our free event series, #WFTLearn. Even if you have to miss one, we’ll send you a recap afterward!

Real Estate Closing refers to the meeting where ownership of the property is legally transferred to the buyer.

First, there is the parade of munchkins welcoming the buyer to the wonderful world of home ownership.

Then, there arrives the ceremonial unicorn. She is often late, so don’t panic. But it’s quite a special moment.

At Your real estate closing should you expect a butler to serve champaigne?

This is the tenth of 10 Tips for Selling Your Real Estate, FSBO which can be downloaded for free.

Shortly after that, the title company’s butler brings in your choice of champagne, followed by a platter of above average appetizers.

In the meantime, the title company masseur will be working on the buyer’s back while they preview some papers. Some title companies will provide a person to give them a pedicure at the same time, but recent budget cuts have seen this perk fade away.

Toward the end of the closing ceremony, you (as the former owner) will appear, previously this was through a smoke machine, but in today’s economic climate, you will normally just enter through some balloons.

The munchkins and unicorn will return, and on perfect cue, the agents, lawyers, title company staff, and the munchkin crew will sing the buyer a personal “Welcome Home” song followed by a unique delivery of the keys (Some have seen them come in the mouth of a St. Bernard, or a dove’s tail, or even floating down in a parachute from of a colorful display of fireworks.

You, as the seller, will be greeted by a congratulatory committee who will take you to your “home sale celebration” while your belongings are moved out of the previous home and into your new location.

What to Really Expect at a Real Estate Closing

Just kidding. Maybe one day we can provide you with a more exciting experience, but for now, we just promise to make your closing day as easy and enjoyable as possible. We can assure you it will be a memorable day, and very “exciting” in its own right. Here’s what you can actually expect.

The process usually only takes about an hour, and you’ll just need to practice holding a pen and make sure you’ve had your morning coffee and perhaps a bowl of Wheaties.

Payment

At closing, the specified party will be paying for his or her share of the closing costs. As the seller, your costs will be deducted from your gross proceeds from the sale.

The HUD Uniform Settlement Statement (which both you and the buyer will sign) will detail the closing costs (plus all the monies involved in the transaction), as well as who is expected to pay them.

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How to Help the Buyer of Your Home Get Financing

Posted by Chris On October 18
How to help the buyer of your home get financing

This is the seventh of 10 Tips for Selling Your Real Estate, a FREE guide to help you list your house “For Sale By Owner.” Available now at WingedFootTitle.com/ebooks.

Most sellers who list their home “for sale by owner”, tend to assume that potential buyers have been through the home-buying process and know the stages of buying a home.

However, the fact is, this is one of the services that a Realtor® would normally provide. It is now going to be up to you, as the seller, to walk the buyer through the process of getting to the closing table.

The best way to navigate financing is to align yourself with a local title company and mortgage company that can help walk you through the process.

Why you Need a Loan Officer or Mortgage Broker

By aligning yourself with a mortgage company, you are actually giving the loan officer leads in return for assisting you with the transaction, so it’s a win for everyone.

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Limbo

We’re honored to have a guest blogger, Gabriel Knight, for this post. ~Chris

Florida is the fourth most populous state in the US and for good reasons. With the awesome temperature and miles of beaches, there’s no doubt why Florida is called the “Sunshine State”.

Florida has always been a dream destination for families and most residents are drawn toward this state for its weather and cities. Although real estate prices vary dramatically throughout the state of Florida, mortgage rates have been insanely low throughout 2012 and even in the first quarter of 2013.

5/1 Adjustable rate mortgage loans are available at 2.38%, 15 year fixed rate mortgage loans are being offered at 2.75% and 30 year fixed rate mortgage loans at 3.75%.

With the record-low mortgage loan rates in Florida, there are increasingly large amounts of people who are looking to refinance their home mortgage loans.

Opting for a mortgage refinance in Florida – Should you act now?

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Choose Winged Foot Title For Your Next Closing!

Posted by Jillian Dohack On June 13

“I know Winged Foot Title! They pick up the phone on the first ring” said Matt from Lennar.

That’s right; we are here for you, right from the first phone call all the way through closing. Let’ start at the very beginning. What does “closing”, “settlement” or “closing escrow” mean?

Closing or settlement is a term used for the point in time at which the title to the property is transferred to the buyer and is the final step in executing a real estate transaction

We all know buying a house is one of the most important decisions you will make in your lifetime. It is a very exciting yet possibly overwhelming experience. We find that the more you know about the process the more confident and relaxed you will be.

Once the seller accepts your sales contract, the countdown to closing begins. Timing is crucial to make sure all of the requirements for a successful closing are in order.

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What is a Short Sale?

A short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property and the property owner cannot afford to repay the liens fill amounts, and whereby the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt.

We work with some amazing and knowledgeable listing agents on short sales in Florida. However, there are occurrences where we have a file where the buyer’s agent is not familiar with the short sale process.

Short sale listings are very different from listings where the seller has equity. When an offer is received on the listing and the seller agrees to the price, it does not mean that the lender will accept the price.

When we receive the offer on a new file we like to talk to the buyer agent and explain how the short sale process works. It is important for them to understand the process for buying a short sale for their clients.

Communication from the short sale processor, listing agent and buyer’s agent play a critical role in keeping the buyers on board.

It is very important for them to know that when we request a response from the buyers, weather it is a counter offer or to provide any information, we usually get only 3 days to respond.

We also like to reach out to their buyer to help educate them as well so they know what to expect.

Here are some things buyer agents should know about short sales in Florida:

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Nationstar Mortgage

Logo is property of Nationstar Mortgage.
Winged Foot Title claims no rights to this logo.

As I have mentioned in a few past posts, there have been many changes taking place with Short Sales that have been creating quite a lot of buzz.

Today I want to share some of these new concerns specifically pertaining to dealing with servicers instead of banks, specifically Nationstar and their recent requirements for Short Sales.

We’ve noticed that a large portion of our short sales are no longer serviced by banks, but by other entities such as Ocwen, Greentree and Nationstar Mortgage. There are so many bad mortgages that these 3 companies are taking over the servicing of the loans.

The main reason for concern is that these servicers are not banks and this means they do not fall under the control of the OCC (Office of the Comptroller of the Currency) and the Federal Reserve, which gives them the ability to create their own rules.

Nationstar Mortgage

Nationstar Mortgage has also been the talk of our office as they have recently changed some of their requirements which are causing a stir in the processing of short sales. Here are the most recent changes and requirements:

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Wells Fargo (Courtesy of Flickr User Saturnism)

Last week we attended a Lunch & Learn on short sales with Wells Fargo. This was an opportunity for us to learn more about navigating a short sale with Wells Fargo Home Mortgage specifically the portfolio loans.

The short sale manager educated us on benefits of a short sale, HAFA options & eligibility, process for a successful short sale, checklist of documents required, timeline for review, and common obstacles.

What are the benefits of a short sale?

  • Customer benefits:
    Alternative to foreclosure with a more planned and graceful exit; credit report says “settled for less than owed,” investor pays for closing costs and possible incentives.
  • Buyer benefits:
    Usually the home is in better condition than buying a foreclosed property. Investor may pay some closing costs.
  • Community benefits:
    Occupied and maintained properties, stabilizing neighborhoods, preventing vandalism.

What is the process for a short sale with Wells Fargo?

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Should a Home Buyer Pay a Short Sale Negotiation

We have been reviewing recent activity in the home short sale market as we are wont to do and found a couple of surprises.

The most glaring was the number of multiple listing service (MLS) detail that burdened the buyer with paying commission to the listing agent, short sale negotiation fees to a 3rd party, or even the seller’s attorney fees.  Here are some examples of what we found:

  • “Buyer agrees to pay listing agent a bonus commission of $2,000 at closing.”
  • “Buyer to pay $2,500 at closing to 3rd party short sale negotiators.”
  • “Seller’s attorney will attempt to collect a fee of $2,500 from short sale lender at closing.  If lender should refuse to pay any amount of said fee, Buyer shall be responsible for the difference between $2,500 and the amount paid by the lender.”

My first thought was that such detail would discourage buyers from looking at these properties, which would be a reasonable presumption if there were a proven, no-cost, no-obligation-if-it-doesn’t-close short sale solution (which there is of course!) currently in the marketplace.

Curious, I put the question to our database of successful real estate professionals and to a short sale-focused online forum.  Responses were quick but thoughtful.

NOT LEGAL ADVICE: This information is not to be construed as legal advice. Legal advice must be tailored to the specific circumstances of each case. Every effort has been made to assure that this information is up-to-date as of the date of publication. It is not intended to be a full and exhaustive explanation of the law in any area. This information is not intended as legal advice and may not be used as legal advice. It should not be used to replace the advice of your own legal counsel.

Winged Foot Tite, LLC is not associated with the government, and our [short sale orchestration] service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.