Why Is It A Bad Idea To Use The Seller’s Title Company?

Often when purchasing a bank owned property, known in the industry as a REO (Real Estate Owned) the bank will insist upon the buyer using the seller’s title company. In return for this consideration the bank will often offer to fully pay for the buyer’s title insurance policy. On the surface, this may sound like a good deal. But, in truth, title companies that handle bank-owned properties and other distressed properties are not being honest about what they are truly offering. Many times these policies exclude coverage for those items that are most likely to result in a title insurance claim.

John J. Yonas, Esq. of Yonas & Rink LLC Attorneys at Law writes “It has become standard practice for these companies to exclude standard coverage on owner’s title insurance policies. The owner’s title policies issued will not cover many items that buyer’s should have protection against like amounts due to homeowner’s associations, amounts due to condo associations, mechanic’s liens, judgment liens just to name a few. How can these title companies get away with this practice? No one ever questions the coverage provided in the owner’s policy. Most people assume that all owner’s title insurance policies are the same. The truth is that all owner’s title insurance policies are not the same. Most owner’s title insurance policies from title companies that handle bank-owned properties and other distressed properties are actually worthless when it comes to unpaid association liens or other excluded items.”

First it is important to realize that the seller’s title company, by definition, works for the seller not for the buyer. A buyer must be certain that they are being properly represented throughout the purchase process. It is the buyer’s right to choose the title company to handle the closing and provide the buyer’s title policy. However, the lure of free coverage may entice a buyer to allow the seller to make these arrangements. Many real estate agents, believing that all title insurance policies provide similar protection; will just differ to the seller’s instructions to avoid a conflict. Or worse yet, will fail to discuss the importance of good title insurance with their buyer due to their lack of understanding of the risks involved. The real estate agent has a fiduciary responsibility to his client to place the client’s interest above all others. Failing to properly inform the client or being ignorant of this important part of the sales process can result in the buyer being under the false impression that they are adequately protected for issues associated with the property title.

If you decide, or allow your agent to decide, to use the Seller’s title company, request a copy of the owner’s title insurance commitment. This document needs to be read in conjunction with the language contained in the owner’s title policy including the owner’s title insurance policy jacket. Alternatively, you can choose to work with a reputable, local, title company that wants to earn your business in which you can place your trust.

For more information on this or other Real Estate related topics Jim can be contacted at jamesljones@kw.com or get information on thousands of homes in the Miami Valley at http://www.TeamJonesRealEstate.com

How Bad Is The Miami Valley Housing Market?

We hear a lot of negatives about the housing market from the national news. While I would not portray the information they share as completely inaccurate, it is deceptive because there is not a single, national, real estate market but many local markets.  The Dayton market is comprised of many smaller markets. While Oakwood and Kettering are side-by-side geographically, they have different characteristics that cause prices and values to vary. Englewood, Clayton and Trotwood are also contiguous municipalities that, in the Salem Mall area, are intertwined to the point it is difficult to know where one begins and the other ends. Yet property taxes and property values vary. Preble county and Darke county share similarities yet have unique characteristics as do the communities located within. We see more so now than ever before that there are markets within markets and individual homes standing out within markets.

I decided to revisit one of my blogs from 2007 and the reported statistics to see what has changed.

2007 saw the terms “credit-crunch” and “sub-prime” become commonplace when referring to the national housing market. Across the nation, sales of new and existing single-family homes saw declines in numbers of home sales and in home values. Today we see this same news. The politicians are blaming the sub-prime fiasco each on the other side while values continue to fall off. We hear new terms like “buy and bail”,  “walk-away”, “upside down” and “under water.”

Locally, in 2007, while the Dayton Metro market was certainly not un­touched by the downturn in sales activity, we were clearly affected to a lesser degree than many other markets, especially in terms of our local home values. Today we see a different picture with more significant impact in many of our area markets.

During 2007, single-family sales activity, for Dayton and 15 of the surrounding suburbs, as reported to the Dayton Area Board or Realtor’s Multiple Listing Service we saw average home values and sales widely varied from community to community. Taking an average of these areas reveals a reduction of 29% in total sales, decreasing  from 7,076 in 2007 down to 5,477 in 2010. We also saw a 7.9% decrease in average sales price dropping from the 2007 average of $163,216 to $151,289 in 2010.

With the exceptions of Englewood/Clayton, where the highest sale price for a single home nearly doubled from $369,000 to $700,000 and Miamisburg where that highest single home sale price rose a mere $9,000 from $411,000 to $420,000, every market saw a decrease. That decrease averaged just short of a 16.3%.

While, statistically, this can be very discouraging, there is hope. Ultimately your home is the one that matters to you. For more information on this or other Real Estate related topics Jim can be contacted at jamesljones@kw.com or get information on thousands of homes in the Miami Valley at http://www.TeamJonesRealEstate.com. I will be glad to assist you.

Mortgage Interest Rates Flirting with 4%!

I am amazed at the traditional news media and how their collective reporting is often opposite of our local reality. We hear stories of lenders sitting on money and being reluctant to make loans and general difficulties in obtaining a home mortgage. Our reality bears little resemblance to those reports.

Interest rates have been steadily moving downward toward the 4% mark over the last few months with occasional fluctuations upward. Yesterday PNC Mortgage posted rates on FHA  30-yr Fixed at 4.25%. Conventional rates are slightly higher at 4.5% while last week they were, for just a couple of days, available as low as 4.375%. Will they continue to drop? How low can they go? There is no certain way to determine when we have reached bottom and rates will begin a climb. Perhaps now is the time you should take advantage of these favorable rates to refinance or to make that long awaited home purchase. Great values in homes abound throughout the Dayton area. Look out into the counties for lower property taxes to make your new home an even better value. Remember, $100 per half in property taxes will have twice the impact on your payment as $1000 in purchase price.

As a Keller Williams Advantage Real Estate Consultant with Team Jones Real Estate, I am in daily contact with loan officers and mortgage brokers in the Dayton, OH, Miami Valley market. What I find is an availability of  funds to qualifying borrowers who have middle FICO scores as low as 580. While some lenders are reluctant to make mortgage loans in amounts below $40,000, I am working with a loan officer, with a nationally known lender, who can provide funding down to a $10,000 purchase price. Of course not all lenders have the same criteria. It is important for the effective Real Estate professional to know the lenders and their frequently changing criteria, thereby being equipped to direct the prospective buyer to the best mortgage solution for their particular situation.

For more information on this or other Real Estate related topics Jim can be contacted at jamesljones@kw.com or get information on thousands of homes in the Miami Valley at http://www.TeamJonesRealEstate.com