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February 12, 2019February 9, 2019

An Error in the Legal Description of the Deed: What Happens Now?

What can the buyer do when a real estate deed carries an incorrect legal description of the property? Perhaps it describes the wrong parcel, or fails to reflect all land purchased in the sale.

An error in a legal description of a property has consequences. It can affect taxes. As lenders extend loans based on a percentage of the property’s appraised value, footage mistakes can sink a loan approval. If the error is neglected, disputes can arise later, and they can become the stuff of nightmares.

Worst-Case Scenarios

Some deeds bear legal descriptions drafted using early survey methods, pre-dating GPS measurements. Some have errors in lot descriptions that get passed unwittingly from one owner to the next—a sort of legal time bomb waiting to take someone by surprise.

February 7, 2019February 7, 2019

The Quitclaim Deed’s Function in a Contract for Deed Sale

A contract for deed sale can present a convenient alternative to the traditional real estate conveyance. In this owner-financed deal, the buyer usually lives on the property upon the execution of the contract. While enjoying the property, the buyer pays for it in monthly installments, until the agreed-upon price has been paid in full.

Down the road, when full payment is complete, the purchaser formally acquires the title deed. This event occurs through a warranty deed, which guarantees that the seller is the sole party with any claim on the property to be conveyed – no exceptions, unless stated on the deed.

If things don’t go as planned, and the buyer defaults, recovery of the property can be a time-consuming process. Defaults happen, so a seller should consider having the buyer sign a quitclaim deed as part of the execution of the contract. A quitclaim is a non-warranty deed. It conveys property with no warranty for the title. Through this document, if it becomes needed, the buyer will relinquish any claim on the property.

Here, we look at how the contract for deed sale works, and briefly examine the function of the quitclaim deed.

February 5, 2019February 5, 2019

What is a Life Estate?

You may know of someone with “life rights” to a property. They are known as life tenants, and the persons involved have the right to occupy and use their property for the rest of their lives. This is known as a life estate. While they enjoy the benefits of the property that any owner would, there are limitations. Life tenants cannot sell or transfer the property, or mortgage the property in their own names. Life estates are usually irrevocable once put into place. They are an estate planning tool that helps avoid probate when the life tenants die. At the life tenant’s death, the beneficiary files the death certificate in the local land office and receives title to the property. A life estate deed avoids the gift tax that would occur if a parent signed over their home to their children during their lifetime. The life tenant does not include their property in their will since the life estate deed establishes the owner of the property.

January 28, 2019January 28, 2019

The Real Estate Deal, Decluttered: Blockchain and Deed Recording

Throughout the past decade, blockchain technology has evolved from an upstart concept to early adoption in banking and a host of other industries. Many people are eager to learn about blockchain and how it can change the way we do business.

What, we might wonder, can the blockchain do to remedy the hurdles and risks that pervade the real estate industry?

The question is now ripe. Today, we can review early examples of blockchain technology in action, modernizing property conveyance. Specifically, blockchain applied to real estate has obvious potential for improving the deed recording process.

How will blockchain make things better?

January 25, 2019January 25, 2019

Understanding the Deed in Lieu of Foreclosure Process

Losing a home to foreclosure is devastating, no matter the circumstances. To avoid the actual foreclosure process, the homeowner may opt to use a deed in lieu of foreclosure, also known as a mortgage release. In simplest terms, a deed in lieu of foreclosure is a document transferring the title of a home from the homeowner to the mortgage lender. The lender is basically taking back the property. While similar to a short sale, a deed in lieu of foreclosure is a different transaction.