Friday, October 31, 2014

Hanover Park Real Estate: Types of Property Deeds and How They Differ

All real estate transactions for the purchase or sale of property require a conveyance of title, which is facilitated through the valid execution of a deed. A deed is a legal document that transfers some property right in real estate. Three major types of deeds are often used in real estate transactions to convey title, or ownership of the property, although other types of deeds exist. Those commonly used in real estate contracts include the general warranty deed, special warranty deed, and quitclaim deed. Each deed contains some or all of the covenants, or promises, connected with the subject real estate, which are passed from the previous owner (grantor) to the new owner (grantee) of the property.

Deed Covenants

There are covenants, or warranties, that a grantor /seller may convey to a grantee/buyer in a real estate transaction, depending on the type of deed that is used to transfer title. A grantor who conveys property is legally bound by the warranties of title, whether expressly written on the deed or implied by law, and a buyer may have recourse if a breach occurs.

  • Covenant of seisin – a grantor warrants having possession (seisin) of the property and, therefore, has the legal right to convey the real estate to another.
  • Covenant against encumbrances – a grantor warrants the real estate, unless specifically stated otherwise in the deed, is free of any liens or encumbrances.
  • Covenant of conveyance – this is a promise by the grantor that he or she has the right to convey, or transfer, the title property.
  • Further assurances – a grantor promises to deliver any and all documents or instruments necessary to convey good title.
  • Covenant of quiet enjoyment – the grantor promises to protect the grantee in the event a disturbance occurs with the buyer’s right to possess or use the property.
  • Covenant of warranty – this promise is a covenant not only to defend the grantee’s mere right of possession to the land, but also the land itself and the estate within it.

General Warranty Deed

A general warranty deed is the highest caliber of deeds a buyer can receive because it contains all of the present and future covenants. Even more, the covenants contained in a general warranty deed cover not only the period during which the present seller held title to the property, but these covenants go back to the origin of the property itself. Consequently, the present seller would be liable for any defects in title before and through owners of the property.

Special Warranty Deed

The second best type of deed a buyer can receive, a special warranty deed contains the covenant of seisin and the covenant against encumbrances. The main difference between a general and a special warranty deed is that in the latter the seller only warrants against any acts or omissions that occurred while holding title. In other words, no issues in the title are warranted against prior to the seller taking ownership of the property.

Quitclaim Deed

Offering the least protection for the buyer, a quitclaim deed only conveys the rights and interest the grantor has in the property and nothing else. No warranties or covenants are provided to the buyer and, as a result, the seller is not liable for any issues that may arise regarding title. More often than not, quit claim deeds are used to cure defects in title and can be seen in property transfers between family members.

Contact a Hanover Park Real Estate Attorney

The purchase and/or sale of real estate is an important decision and often one of the largest transactions in one’s lifetime. As such, both the buyer’s and seller’s interest should be protected during all stages of a transaction. If you or someone you know is interested in purchasing property, contact a Hanover Park real estate attorney today to learn about rights and obligations associated with real property. The Law Offices of Gilbert C. Schumm has provided legal advice to clients regarding real estate for over 35 years and services the areas of greater Chicago including Hanover Park, Mt. Prospect, Arlington Heights and Roselle, among others. Call (847) 559-9109 today to schedule your initial consultation.

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Friday, October 24, 2014

The Most Common Mistakes When Buying an Arlington Heights Short Sale

Despite the upturn in the real estate market, non-foreclosure short sales increased four percent in 2012. Banking regulations have tightened as a result of the lax lending during the real estate boom, however, buyers are still able to get financing if they can qualify. Even more, short sales and foreclosures are still available for purchase if a potential buyer can navigate through the complex process of buying a distressed property.

Top Mistakes Buyers Make

Understanding the short sale process, which can be complicated, and what you are getting into as a buyer will help you to avoid making a bad investment.

  • Forgoing a home inspection – a home inspection should be done by a potential buyer whenever purchasing any type of property, whether distressed or not. Not only does this inspection reveal potential issues with the property but may also provide negotiating leverage when making the offer.
  • Ignoring legal issues associated with the property – a typical home purchase includes a disclosure statement revealing unpermitted renovations or other legal issues associated with the home; however, because bank-owned properties often sell “as-is” a potential buyer needs to conduct his due diligence before entering into a purchase contract.
  • Not investigating the neighborhood – looking around the area and talking to neighbors brings added value that cannot be found through a real estate listing.
  • Falling for the property without considering the numbers – a buyer may believe he or she may have found an incredible bargain, however, other factors should be taken into consideration when falling for a home including needed repairs and latent defects in the home not readily visible from the onset.
  • Not accounting for delays – short sales often take longer than traditional sales because of backlog of homes, lien issues or other problems with the property.
  • Not writing contingencies into the offer – although a buyer may want to bring their best offer forward, including contingencies (such as financing or satisfactory inspection) will help protect a buyer’s earnest money deposit should the deal not go through.

The purchase of a home, short sale or not, can be complicated. It is important for both buyers and sellers to obtain legal representation to ensure the rights and obligations of all parties are protected.

Arlington Heights Real Estate Attorneys Available

If you or someone you know is interested in purchasing a short sale property, or any other type of real estate, contact an Arlington Heights real estate attorney today to find out your rights and obligations during this process. The attorneys at the Law Offices of Gilbert C. Schumm have decades of experience providing legal guidance in all types of real estate transactions. Contact the firm today to schedule your initial consultation.

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Thursday, October 16, 2014

The Waiting Game: Schaumburg Short Sales Approvals

If you are in the market for purchasing a home, you may have looked into distressed properties as a way to get a bargain. It is important to keep in mind that timeline in purchasing these types of properties can be lengthy. Short sale buyers need to realize that the particulars of every case are different. That being said, below are a couple of factors that a potential buyer should think about and possibly do to ensure a smoother process.

Things to Consider

Whether buying or selling a short sale, the process can be complicated. Consider these tips before making any final decisions.

·           Qualify first, and then make an offer – at the minimum, a pre-qualification letter should accompany all offers; having financing in place makes you a better candidate, especially when multiple offers are involved.
·           Use an Agent Experienced with Short Sales – whether you are the buyer or the seller of a short sale property, experience is key. There are numerous issues that can delay – or derail – the process.
·           Your Agent Should Conduct Due Diligence – matters for consideration for a buyer include comparable sales, the number of offers received, and whether the seller’s short sale package is complete.
·           Patience is a virtue – how quickly (or slowly) a short sale will close will depend on the lender involved. That being said, the process can take as much as 120 days.
·           Part of the Process is Out of Your Control – factors that may delay the process include the involvement of a third-party negotiator, infrastructure issues of the bank, or a significant discrepancy between the appraisal and your offer.

Legal advice should be sought when considering purchasing or selling a short sale property. Aside from the complicated proceeding involved, tax implications – as well as other legal matters – should be discussed with an attorney prior to making any decisions.

Contact a Schaumburg Attorney for Guidance

If you or someone you know is facing foreclosure, contact an experienced Chicago foreclosure attorney for advice on the best way in which to proceed. A home is the biggest investment during one’s lifetime; don’t navigate the complex avenues of foreclosure alone. The attorneys at the Law Offices of Gilbert C. Schumm have decades of experience in real estate law and can guide you every step of the way. We serve clients in Palatine. Call (847) 559-9109 today to schedule your initial consultation.

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Wednesday, October 8, 2014

Regulators, Housing Advocates Blast Mortgage Service Lenders

It is no secret that the “big banks” earned an awful reputation as a result of their questionable mortgage servicing practices when the real estate market crashed, particularly when it came to foreclosures and loan modifications. From backlogged loan modification paperwork to wrongful robo-foreclosures, the introduction of mortgage services companies seemed like a much-needed change. Unfortunately, the delays and mishandling of the past have sprouted once again, according to an article in the New York Times, and homeowners are experiencing difficulties when facing foreclosure or applying for loan modifications. Unfortunately, struggling homeowners in Palatine and other Chicago-area neighborhoods are too familiar with these issues.

Foreclosures in Palatine

Although recent statistics showed initial foreclosure filings during the first two quarters of 2014 to be the lowest since 2007, the time it takes to move the homes through this process is still backlogged, delaying the market’s bounce back. With so many struggling homeowners still facing foreclosure, it’s important to separate fact from fiction to be better equipped if you – or someone you know – is experiencing this.

  • Foreclosure adversely affects your credit – TRUE. Should your home go through the entire process, your credit score may drop as much as 200 to 400 points; additionally, the foreclosure will remain on your credit report for seven (7) years.
  • You have a set number of days to vacate once a foreclosure notice has been issued – FALSE.  Although a foreclosure notice means the judicial process has been initiated, options (such as a short sale or deed in lieu of foreclosure) are available that do not include surrendering the property within a certain period of time.
  • Hiring a foreclosure specialist (or attorney) will guarantee your home will be saved – FALSE. Unfortunately, there is no guarantee against a foreclosure and any third party promising you this – whether or not a fee is being charged for the services – is just being opportunistic.  
  • I won’t owe any money after my property is foreclosed on -  FALSE. Bad news. If your property cannot be sold for the full amount owed when auctioned off, the homeowner will be held personally liable for a “deficiency judgment” (the difference between the foreclosure sale price and the amount owed on the loan).

The foreclosure process is complicated. Only 29 percent of homes in the United States are owned free and clear, according to a real estate housing blog. Fortunately, there are options for homeowners who are facing foreclosure.  

We Are Here to Help

If you or someone you know is facing foreclosure, contact an experienced Chicago foreclosure attorney for advice on the best way in which to proceed. The attorneys at the Law Offices of Gilbert C. Schumm can guide you through each step of the home buying process, and can answer any questions you have regarding real estate. Call (847) 559-9109 today to schedule your initial consultation. Our offices serve clients in the Palatine area.

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