Think about the parking before you buy a home

by Dan Krell
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DanKrell.com
© 2012

In light of the increased attention of predatory towing in Montgomery County, it’s become apparent that parking is one of those things we often take for granted; parking doesn’t seem to be a consideration until we are hassled about finding a spot to leave our car. Sure, we may think ahead about parking when we venture downtown or to the metro, but what about when we get home? Parking can sometimes be a challenge as well as the source of neighbor conflict. When buying a home, make sure you’re aware of the neighborhood parking conditions.

To ensure that residents have a parking space, many townhome and garden condo communities offer at least one, if not two, reserved parking spaces. This may sound good, but if your family has multiple cars parking may still be a challenge. However, if you think parking your extra cars in the unreserved spaces (often labeled “visitor”) solves your problem; consider how many other neighbors who own multiple cars are parking in these spaces as well – which could make the neighborhood feel like you’re parking in a busy downtown area.

Making matters worse, imagine how inconsiderate neighbors or visitors who park in your reserved space can affect your day. Returning home late in the evening to find an unauthorized car in your reserved space, and no other parking spots available can not only be frustrating but leave you angry and resentful.

Parking issues are not only a phenomenon of high density communities, but can also occur in neighborhoods comprised of single family homes. Regardless whether you have a driveway or not, off street parking can sometimes be tricky. Much like the scenario of having an unauthorized car in a reserved parking space: you might encounter situations where people park in your driveway without asking (usually when neighbors have parties), or more often someone blocks the entrance to your driveway making it impossible to leave or enter.

If you’re planning to buy a home, don’t wait until it’s too late to think about parking. Experts recommend you visit potential homes in the evenings and weekends to see how the parking is impacted when most people are home. Circumstances that could impact a neighborhood’s parking availability might include recreational and commercial vehicles, as well as a neighbors’ home based businesses. If you have a chance to interact with some of the neighbors, ask about the parking situation and how the neighborhood copes with parking issues.

Additionally, if you’re considering a home that’s located in a home owners or condo association; the association rules and bylaws are recommended reading. Familiarize yourself with the rules and bylaws so you know the association parking regulations and how the management company deals with unauthorized vehicles.

In many areas there are parking restricted neighborhoods, like some in Montgomery County MD that are included in the Residential Permit Parking Program, which helps limit non-resident parking in neighborhoods that are impacted by nearby high traffic public areas and facilities. Ask your real estate agent about obtaining resident and visitor permits as well as asking about the parking situation.

When purchasing a home you should consider the parking conditions, as well as how the neighborhood deals with unauthorized parking. Many high density communities have strict towing policies, which makes someone think twice about unauthorized parking after being towed. However, most neighborhoods solely rely on the residents’ thoughtfulness of their neighbors.

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This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of November 19, 2012. Using this article without permission is a violation of copyright laws. Copyright © 2012 Dan Krell.

December 8, 2011June 3, 2020

It’s time to buy a new home

The time may be right for you to buy a new home this spring. Low interest rates and reduced prices, combined with builder incentives may make a new home a viable option that many home buyers have forgotten about.

Home builders that survived the culling of the market decline have sought out ways to make homes more affordable. Going with the new trend, some home builders are offering more efficient floor plans, as well as more cost efficient building processes.

Modular homes seem to be more prevalent these days as custom home builders seek to reduce costs to the buyers as well as increasing floor plan flexibility and construction quality. The reason why many home builders are turning to modular designs may be that the modules are built in a controlled environment, which increases quality while reducing weather related delays and damage. In a typical plant, manufactured and modular housing fabrication quality specialists constantly monitor fabrication to ensure the final product meets or exceeds all codes, which is unlike on-site construction where inspections can be random and inconsistent.

One attraction to buying a new home is that everything is new! Along with the new, one expects warranties. Make sure you discuss the warranties that are provided with your purchase with your builder and Realtor®. It is typical for new appliances, fixtures and flooring to have limited manufactures warranties, so make sure you receive all paperwork related to those items.

Additionally, most builders offer a warranty as well; the warranty is most likely guaranteed by a third party. According to a homebuyer’s booklet offered by the Maryland Attorney General’s Office Consumer Protection Division, a home builder warranty in Maryland must include at a minimum: “any defects in materials or workmanship for one year; any defects in the electrical, plumbing, heating, cooling and ventilating systems for two years (not to exceed the period of the manufacturer’s warranty); and defects to any load-bearing structural elements for five years.” The booklet recommends that you contact the third party guaranteeing the warranty, to check if the builder is in good standing.

Although a home may be new, it does not guarantee that it is perfect when delivered to you. It is common to conduct a “final walkthrough” with a builder representative to check the systems and to identify any defects that may need repair or correction. Builders will ask for a “punch list” of items that need correction.

Former president of the American Society of Home Inspectors, Frank Lesh, was on record as saying that “Even new homes have defects that only a professional can detect…” He stated that a home inspector can help ensure that a new home’s major systems (roof, foundation, electrical, plumbing) “are functioning properly and safely before moving in”… “Because many items can’t be inspected after a house has been built, homeowners should consider having a series of phased inspections conducted at key milestone markers. ASHI encourages homebuyers to consider an inspection at the following times: prior to foundation pour; prior to insulation and drywall; prior to the final walkthrough.” (ashi.org)

If you’re considering buying a new home, consider visiting new home resources offered by the National Association of Home Builders (nahb.org) and the American Society of Home Inspectors (ashi.org), as well as the homebuyer’s booklet offered by the Maryland Attorney General’s Office Consumer Protection Division (http://www.marylandattorneygeneral.gov)

By Dan Krell
Copyright © 2011

This article is not intended to provide nor should it be relied upon for legal and financial advice. Using this article without permission is a violation of copyright laws.

August 18, 2011October 11, 2019

Understanding Title Insurance

The necessity of title insurance has been debated over the years by many home owners. However, foreclosure disputes, between lenders and former home owners, have brought focus on a valuable and often misunderstood protection. Besides the many stories that have been told about how an owner’s title insurance policy has saved or could have saved a home, many home buyers are unaware of how title insurance was conceived. Many have difficulty understanding title insurance.

According to the American Land Title Association (ALTA.org), title insurance came about as a result of a landmark court case in Pennsylvania in 1868, which found that home seller was not be responsible for a erroneous title opinion. Subsequently, the first title insurance company was formed in 1876 in Philadelphia. The company promoted itself by claiming that they would insure “the purchasers of real estate and mortgages against losses from defective title, liens and encumbrances”…”Through these facilities, transfer of real estate and real estate securities can be made more speedily and with greater security than heretofore.”

Like today, title examinations were conducted to ensure that the title was marketable (or defect free). However, prior to the offering of title insurance, property owners were often held responsible for liens and encumbrances left on the title by the previous owner, or when mistakes occurred. Title disputes were often settled in court.

Initially, title insurance was often a local process. However, the title insurance industry surged along with an expanded housing market after World War II ended. Additionally, the use of lender’s title insurance grew along with the secondary mortgage market; because as the number of nationwide mortgage holders increased, lenders found that title insurance was necessary to protect their interests.

Contrasting to the recordation system has been used in most of the United States (in some cases before the formation of the country); many other countries use a land registration. Land registration typically allows a government to determine ownership when property ownership is challenged; property owners usually have no recourse.

Title insurance is a result of our recordation system that continues to this day, where property ownership can usually be determined by conveyance. Although the recordation system relies on transfer instruments that indicate a grantor, grantee, and property description; the system is not perfect. Besides recordation mistakes and claims from unrecorded conveyances; fraud can also occur by recording falsified transfer documents with a complicit or unsuspecting clerk.

There are two types of title insurance that are offered: lender’s and owner’s. A lender’s policy is usually required by a mortgage lender and protects the interests of the lender by validating the lender’s validity and enforceability of the mortgage. The lender’s policy is typically issued for the mortgage amount and coverage decreases as the principal is paid down.

An owner’s title insurance policy protects the owner’s interest in the property. The policy is typically issued for the purchase price and is usually valid through ownership to cover claims against the title. Policy coverage varies- so check with your title agent for pricing and coverage levels.

When purchasing a title insurance policy, consult with your title attorney about the policy coverage and limitations. Additionally, A Consumer Guide to Title Insurance is available from the agency that regulates title insurance producers – the Maryland Insurance Administration (https://insurance.maryland.gov/Consumer/Documents/publications/titleinsurancebrochure.pdf).

by Dan Krell
© 2011

Original published at https://dankrell.com/blog/2011/08/18/title-insurance-a-misunderstood-safeguard/

This article is not intended to provide nor should it be relied upon for legal and financial advice. Using this article without permission is a violation of copyright laws.

March 2, 2011July 23, 2019

Proposed legislation may affect home owners and buyers

Now that the 112th Congress is in session, hundreds of bills have already been introduced. During the course of any Congressional session, hundreds (and sometimes thousands) of bills can be introduced; however, as you may already know, most bills don’t see the light of day as they are destined to die somewhere in the legislative process. Here are a select few bills that are currently making their way through Congress, which may be of interest to home owners and buyers,.

Not much has been said about the now defunct home buyer tax credit since it expired last year. Even though some were happy that it expired and pointed to data that indicated that the credit distorted home sales, along comes H.R. 330: “Homebuyer Tax Credit Renewal Act of 2011.” The bill, introduced January 19, 2011 by Rep. Bob Filner (D-CA), calls for a one year extension (from the date of enactment) of the home buyer tax credit [that expired last year]. So, if you kicked yourself for missing it, you may get another chance to take advantage of the home buyer tax credit.

If you’re unaware of the ongoing debate about the mortgage interest tax deduction (MID), your annual MID may become a thing of the past. As some real estate related issues continue to be a hot topic on the hill, this bipartisan House resolution was introduced to express the sentiment of not only numerous Representatives in the House, but also mimics the attitude of many housing industry groups and some constituents. Introduced by Rep. Gary Miller (R-CA) and cosponsored by 41 of his colleagues, H. Res. 25: “Expressing the sense of the Congress that the current Federal income tax deduction for interest paid on debt secured by a first or second home should not be further restricted;” not only expresses a need for the MID, but also enumerates the value and virtues of home ownership.

Home energy audits are an invaluable tool that provides information about a home’s energy efficiency. Obviously, home owners could use the information when upgrading or making improvements to their home. However, the controversy over who and when energy audits should be conducted continues to be sharply debated. Once part of last year’s legislation, H.R. 2454: “American Clean Energy and Security Act of 2009” (colloquially known as “cap and trade”); the requirement for home energy audits reappear in H.R. 627: “Home Energy Loss Prevention Act” (introduced February 10, 2011). If this bill is enacted into law, it will require a home seller to conduct a home energy audit and provide the data to a buyer, who is purchasing the home with a “federally related housing loan;” as well as creating and maintaining a database of the reports.

Additional legislation of interest includes: S. 22: “Homeowner Tax Fairness Act of 2011,” introduced by Sen. Kirsten Gillibrand (D-NY) would allow home owners who do not itemize to claim a standard deduction for real property tax; and H.R. 769: “Fair Access to Credit Scores Act of 2011,” introduced by Rep. Steve Cohen (D-TN) would require all free credit reports to also provide credit scores.

Legislation can be proper and necessary, while sometimes it can be “well intentioned” but with unintended consequences. Of course, the transformation and alteration of bills as they go through the legislative process; as well as voicing your opinion is all part of a bill’s life.

By Dan Krell
Copyright © 2011

This article is not intended to provide nor should it be relied upon for legal and financial advice.

December 30, 2006October 11, 2019

Why Title Insurance is Important

Title insurance should not be an enigmatic item listed on the settlement sheet, and there should be no question as to its validity. Here is a very basic explanation of why title insurance is important.

Title insurance, like other forms of insurance, is governed by the Maryland Insurance Administration (MIA). Title companies and title attorneys are licensed by the State to sell title insurance.

Title insurance is important because it’s an assurance that the home buyer receives a clean title from the home seller. Clearing a title of all liens and mortgages is not always an easy task. The first step is for the title attorney to order a title abstract.

A title abstract is simply a synopsis of the chain of title, or a history of ownership, that has been recorded in the office of land records in the county court house. The title abstract indicates all owners, mortgages, liens, encumbrances, and easements attached to the property. The title abstract also indicates previous sales and mortgage and lien satisfactions.

Because all the information in the title abstract is obtained from recorded information, it is inevitable that mistakes occur. For example, it is common for mortgage release letters to be lost, misfiled, or never filed at all. Sometimes there are years of information that is lost or destroyed resulting in a break in the chain of title.

Once received, the title attorney will review the abstract and look for any blemishes including unreleased mortgages or liens and breaks in the chain of title. If there are any blemishes found, they need to be cured before issuing a clean title. The home seller can remedy most blemishes by supplying all required documents or paying to release attached liens and mortgages. Sometimes it may be necessary for the home seller to show their title insurance policy so as to indicate they were given a clean title.

Sometimes there are items not filed in the office of land records that may affect the ownership of your home. Some of these items may be heirs of previous owners or undocumented lien holders who may make claim to your home. Title insurance can protect you from these claims. It is rare, but making a claim with the title insurance company can resolve these issues.

Lenders believe title insurance is important. If you are obtaining a mortgage to purchase the home, your lender will require “lender’s coverage” title insurance. The lender’s coverage protects the lender in case there are any unrecorded liens, easements, or other unrecorded defects.

Just as in other insurance policies there are different levels of coverage of title insurance. A basic owner’s title insurance policy typically assures clear title to the property and covers against incorrect signatures, on documents, forgery, fraud, and defective recordation of covenants, encumbrances or judgments.

Extended coverage may include coverage for building permit violations from previous owners, covenant violations from previous owners, living trusts, and a variety of encroachments and forgeries. Title insurance does not cover against liens placed after the effective date of the policy.

Policies and limitations vary, consult your title attorney for more information. Some policies cost more than others because of the difference in title insurance companies and levels of coverage. When comparing title companies, you should also ask about title insurance coverage and rates. You can access more information about title insurance at the MIA website, www.mdinsurance.state.md.us.

by Dan Krell

by Dan Krell Google+ DanKrell.com © 2012

by Dan Krell
Google+
DanKrell.com
© 2012