The Whole Enchilada? Know What’s in Your “Bundle of Rights” When You Buy a Home

Image of enchiladas on a plate.

The privileges you get as a homeowner are, in a famous legal metaphor, your bundle of rights. Why the metaphor makers didn’t choose an enchilada is anyone’s guess. It certainly would have spiced up law school courses.

In any case, what’s in a real estate deed matters. If your bundle is missing a few sticks, so to speak, you might not get to use your property as planned. You could need to negotiate or compromise with another party. You might learn that someone else has a conflicting interest and possibly always will.

Ideally, the buyer of a home with a clear title receives complete ownership and the prerogative to use it as desired. In reality, things get complicated. Here are six of the most significant rights you can have:

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Not Entitled? Owners of “Heirship Properties” Locked Out of Disaster Relief

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July 2021 — Elsa was the earliest “E” storm we’ve ever experienced, and Colorado State University now has raised its 2021 Atlantic hurricane season prediction. We should now expect 20 named storms, says CSU. This, after the unprecedented 2020 hurricane season.

Disaster relief funds will be vital this year. And this brings up multiple problems for people in the hurricanes’ paths with no clear title to their homes.

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Issue Spotting: Buying a Home With an Unmarried Partner

Thinking of buying a house with your partner? Many unmarried couples decide to live together, often co-owning their homes. Here are some questions to consider if you’re thinking of making a similar commitment.

Will One Partner Take Out the Mortgage? Or Will You Be Co-Borrowers?

Two people sitting in a house with moving boxes behind them,

When unmarried couples apply for a mortgage, the partner with stronger credit may opt to be the sole buyer. This can lead to the best possible loan terms and rates.

Alternatively, the couple can apply for a mortgage in both names and pay it off from a joint bank account. Buying a home together, as co-borrowers, may seem to strengthen the couple’s borrowing power. Yet it can do the opposite. A lender will look at the lower of the two credit scores to make approval decisions.

Moreover, co-borrowers need to refinance the loan if they later stop co-owning and put the title into only one of their names. Handling a home loan jointly can complicate the couple’s future if the relationship changes.

Before applying for your mortgage, get the facts on credit scores — and how to boost yours.

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Solving Title Problems for a Home with a Previous Foreclosure

Image of a person standing inside a house looking at paperwork. Captioned: Solving Title Problems for a Home with a Previous Foreclosure

A foreclosure usually means a previous owner fell into default on the mortgage. When there’s an unpaid mortgage debt, the lender can put a lien on the property, and ultimately claim the property itself. Foreclosures can also happen due to a neglected tax lien, or some other kind of lien.

But there’s just one question we’re going to explore here. If you decide to purchase a foreclosed home, what problems could arise later? Let’s dive right in and look one of the stickiest situations: a legal challenge from the former owner.

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7 Common Title Problems in Real Estate Deals

Image of a hand holding a pen signing a legal document.

When you tour a home, a big question is whether “what you see is what you get.” Appraisers, home inspection professionals, and title companies help offer the answers. Through the title search, ownership of the land in traced back in time, showing current legal ownership, easements, and any notable issues.  

Until the moment the seller signs the buyer’s purchase offer, the buyer can back out of the deal, and a frequent reason for doing so involves marketability of title. A cloud on the title or an undisclosed easement might come to light, putting off a reasonable buyer. In any case, the mortgage lender must be convinced that the market price of the asset is truly fair and accurate—that what you see is what you get.

So, in the all-important title search, a title company scours deeds and other documents recorded with the county, state and federal tax lien records, and various financial, bankruptcy, and divorce records that could complicate a title. If nothing substantial is unearthed, the title is deemed clean. Some common, even beneficial encumbrances will turn up in a title search. A buyer can expect to learn about homeowners’ association rules, utility easements, and normal zoning restrictions. But detrimental encumbrances can be dealbreakers.

Here are seven of the most common title issues to watch for in any real estate sale:

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Property Title? Deed? What’s the Difference?

Image of a legal document in background. Captioned: Property Title? Deed? What's the Difference?

When you buy a home, you receive the deed. And you hold title. The deed and title are interrelated yet distinct concepts.

Title refers to ownership, including the legal right to possess and use a parcel, the right to exclude others from using it, and the right to transfer your interest to others.

If you do transfer your property to another person, the deed is the vehicle that moves your legal interest in the property to the other party.

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How to Prove Ownership of Real Estate

Image of old keys laying on a plain background. Captioned: How to Prove Ownership of Real Estate

You own real estate. If you’re asked, how do you show proof of your ownership?

Essentially, the proof is in your property’s title history. This means: 

  • Your ownership interest is only as good as the interest conveyed to you by the last owner; and
  • Others could have dibs on your property, if you used it to borrow money.

Of course, when you bought your home, the title company researched the chain of title to ensure previous owner had the right to convey to property to you. How do you check the chain of title now? The county keeps records. Many county websites make the information accessible online, so you can look up mortgages, other liens, and deeds that pertain to your property.

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How a Lien Affects the Real Estate Title

Image of a house in the background with a construction worker in a hardhat holing building plans. Captioned: How a Lien Affects the Real Estate Title.

Many people have liens on their real estate. Consider your mortgage—a lien that leverages the home as collateral for your mortgage loan. Other liens, too, can show up in a title search. Homeowners should know what kind of liens might attach to a home they already own, or a home they’d like to buy. Here, we review the basics of home liens: types of liens, how they impact the home’s title, how they can lead to foreclosure, and how to remove them.

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