When You Least Expect It… What You Need Know About Unrecorded Real Estate Liens

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For many buyers, the home shopping experience involves gazing wistfully at hardwood floors, kitchen countertops, new appliances, and the sunny views from the windows over the garden. As the purchase decision gets closer, the focus turns to the AC efficiency and the state of the roofing, electric outlets, vents, and ducts. Even then, an unknown lien on the title might be the furthest thing from a buyer’s mind.

Liens represent debts that must be resolved before the home can be sold. A mortgage lien, for example, represents a buyer’s obligation to repay the lender.

Before the title can be conveyed to a new owner, a title search will look back over the chain of title to find easements, covenants and restrictions in the records. If a preliminary title report comes back clean, it means nothing substantial was unearthed in the records. Typically, then, the buyer can then access financing, and the parties may proceed with the deal.

But what about unrecorded liens? No one likes surprises that could delay closing. Potentially even more problematic are liens that escape the title company’s attention entirely, only to be discovered after the new owner has lived in the home for some time.

To avert these problems, it helps to know the basics of unrecorded liens.

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LGBT+ and Real Estate Ownership

Navigating Mortgages, Titles and Deeds

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Co-buying a home as a couple signifies a serious commitment on multiple levels. If you have spoken with your real estate lawyer and financial expert, and decided to buy property together as a couple, congrats! You’ll want to make informed decisions about financing and titling your property together. You’ll be forging an estate plan as you go — because the way ownership is vested on the title tells the world what should happen with your property ownership even beyond your life.

It’s good to know that the language of the chain of title can co-exist with respect for the homeowners’ sexual identity. Even so, certain things will be on LGBTIQ home buyers’ radar. Here, we outline some frequently noted issues, to help orient your conversations with your financial and legal advisers, and your mortgage and title professionals.

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Buying Property with a Quitclaim Deed in Massachusetts

A Quitclaim? No problem. It’s Common Practice Here — and Safeguarding Your Title Is Straightforward.

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Three major Massachusetts real estate deeds are commonly used: the quitclaim deed, the warranty deed, and the release deed. In contrast to most other places, Massachusetts home buyers receive their property through quitclaim deeds. So, we need to delve into the use of the quitclaim deed in Massachusetts.

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The Tax Lien Cometh

Back Taxes Can Impact Your Real Estate Title. Here’s How to Deal With Them.

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What happens when a taxpayer doesn’t pay tax? If the Internal Revenue Service is slighted, it follows its age-old tradition and imposes a tax lien on the person’s property. Boats, financial accounts, the house — an IRS lien attaches to everything. And federal tax liens are resilient; they can even stay on the title through a homeowner’s bankruptcy, if they were imposed before the bankruptcy was filed.

With the lien, the government isn’t actually taking the property. But if the homeowner wants to sell the property, the government will take its cut from the sale proceeds.

Concerned you might have a lien? You can check with the recorder of deeds in the county where your home is, or review your debt records on the IRS website. If you find yourself dealing with back taxes, find a way to make good on the tax bill, or get the relief you need.

Here, we delve into the most frequently asked questions about the impact of a lien on a taxpayer’s home title, and steps the homeowner can take to keep that title clean.

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Natural (and Other) Disasters: How Emergencies Impact Titles & Mortgages

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As a general rule, real estate values have risen through the decades. Today, a force is challenging that rule, and we all need to know about it before heading for the closing table. It involves the risk of weather damage and disasters.  

Emergencies are affecting more real estate as the years go on. Whether a catastrophe is defined as natural, human-driven, or both — as with today’s storm surges and floods — it can lead to default on mortgages or deeds of trust. Here, we look at the risks, industry responses, and how homeowners can protect the value of their titles.

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The Partition of Property

What to Do When Co-Owning a Home Doesn’t Work Out

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What happens when co-owners decide not to co-own any more? if an owner wants to voluntarily come off the title, no problem. The co-owners prepare a new deed to convey that person’s interest, with a new title reflecting the desired ownership. And if multiple heirs who co-own a property want to sell it and divide the proceeds, then all they need is a buyer.

But what happens when two or more people with a shared a title or interest in a property disagree on how to handle their ownership — but no one wishes to relinquish an ownership interest to the other? Then both (or all) remain owners. Even if an owner previously “added” someone else to the deed, that second person has a right to continue owning.

Sometimes adult siblings or cousins reach an impasse on how to use an inherited family property. Partners in an investment venture might run into basic disagreements, such as whether to rent the property out or prepare it for sale. Family members might buy a house together, only to find their relationship gradually turning sour. If nobody will budge from their position, a change can only be forced through partition.

The partition of a property can be voluntary, or it can occur when one of the owners sues the other(s) and obtains a court-ordered partition.

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Ready for Sole Homeownership? What Single Buyers Need to Know

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Married couples still make up the bulk of U.S. home buyers. Yet single buyers make up a good portion, too. Some are going solo on account of divorce or a loss of a former life partner. Some, happily independent, are making a commitment to a place for years into the future. And some just want to put apartment living in the rear-view mirror.   

Solo buying can be thrilling and daunting at the same time. The first goal is confidence in the loan approval process. Some solo home shoppers wonder if they’re ever going to succeed in bidding, given the buying power of dual-income couples looking in the same area. For many, the burning question is: What if I’m mentally ready to buy, but maybe not making the kind of money today’s mortgage lenders expect?

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HELOC: How Home Equity Lines of Credit Impact a Home’s Title

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Home buying is a wealth-building strategy, as well as a way to own a living space. As a homeowner pays off the mortgage over the years, the home becomes a store of value. That equity can be useful for making renovations or pursuing new business investments.

A home equity line of credit, abbreviated as HELOC, enables homeowners to reach and use the value they’ve accumulated in their homes. An owner might tap into their home equity to increase the value of the home still further. The interest on a HELOC can be a tax deduction, if the reason for taking out the loan is to improve the real estate’s value.

The owner pays a small annual fee, say $50, in exchange for this ability to borrow against the equity. The percentage of equity the lender might approve for the account could be as much as 85% of the home’s value — minus the current mortgage debt.

So, just like an original mortgage, a HELOC allows the homeowner borrow against the value of the real estate asset. Given that the HELOC collateral is the home, the homeowner will want to steer clear of any activity that could make it more of a stretch to repay the loan, raising the risk of losing the house to the lender.

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Is the Recovery Real? Real Estate in the Summer of Covid-19

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In early March, the pandemic placed U.S. real estate transactions on hold. A few weeks later, Realtor.com created its weekly Housing Recovery Index, to track changes since Covid-19 gained a foothold. The name of the index itself suggests confidence in the market’s rebound.

According to the recovery index, home sales took a turn upward in May. Traditionally, we’d expect a May home sales boost for real estate markets across the United States — the time when homes sell more quickly than in any other month, and command the highest prices. What about June? The buyer interest continued, as noted in a widely cited, upbeat report from the U.S. Commerce Department that focused on a rally in new home sales. Still, it wasn’t a normal June. The rally has included an unusual kind of impetus: a desire for migration from cities to suburbs, as people seek shelter from the virus.

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