Deeds.com

The Non-Arm’s Length Transaction

Most home purchases are arm’s-length transactions. That is, they normally happen between people who didn’t know each other before the house sale. When strangers sell and buy, each side is motivated to negotiate in a self-interested way. This tends to result in a price (and mortgage) that reflects the home’s fair market value.  

But sometimes friends, relatives, or business associates sell real estate to each other. A parent might sell to a child, or vice-versa. An owner might sell a rental house to a tenant. A company might sell a house to someone it employs.

The dynamics of these transactions differ from the norm. On one hand, the process can be simpler. On the other hand, it can be hard to diligently inspect and negotiate for property, or sell it for the right price, when personal relationships are implicated.

Here, we walk through a few of the potential benefits and drawbacks in a home sale between people who know each other.

Rising Profile Ahead for Eminent Domain

When you think of eminent domain, what comes to mind? Perhaps you think of land that suffered some kind of toxic dumping or spilling, so that the government has to take it in order to restore it, if possible, to a non-hazardous state. And that does happen.

But sometimes, city governments move to take property under eminent domain for other reasons. Maybe the owner has racked up more back taxes than the home is worth. Or maybe the owner’s mortgage has gone underwater. But can the government legally take such property? When do governments really resort to eminent domain?

As some financial observers are predicting a recession in the midst of a housing shortage, now is a good time to review eminent domain. And in the coming decade we’ll be seeing more of a new eminent domain issue — one driven by climate change.

Read on as we explore these issues.

A Closer Look at Closing Documents

In each county a recorder of deeds keeps documents that show the makeup of the neighborhoods and the individual properties in the county, and the history of the titles. In addition to the real estate deed and creditors’ liens, there are plat maps.

Plat maps are created under the state’s property code. They represent aggregates of plots — the properties, with their individual parcel numbers, that make up a neighborhood and are individually taxed.

All the streets are numbered. Every piece of property has a builder’s lot number, going back to when the subdivision was created.

Left Unoccupied?

Clever crooks in Ohio, Maine, and many other regions are swindling people out of their homes by recording fraudulent quitclaim deeds. They’re doing it now, and they’ve been doing it for years. But now, property values have exploded. The stakes in real estate are higher than ever before. That makes the abuse of quitclaim deeds extremely appealing to house thieves.

Quitclaim deeds are documents that don’t require a seller’s warranty of title. Often, quitclaims are used to a house title between co-owners or people who trust each other and know the history of the title.

But there are shady characters out there who seize upon the quitclaim deed to sign vacant property over to themselves. And we all need to be aware of how they work.

You Might Be Eligible for Tax Breaks

If you’re a homeowner, or you’re in the market to buy a home, the last thing you want to hear about is rising property taxes. But check those bills.

Even though we expect a slowdown throughout the rest of the year and beyond, the 2022 real estate market is still going strong. And the sky-high real estate values mean taxes are up — again.

Nationwide, many people have recently received their appraisal notices in the mail. What they see will vary by location. Many local tax officials discount their property assessments, so the homeowner may not be taxed on the full market value. Yet tax bills can be in the thousands yearly in some areas.