Do you fully understand the VALUE of the Owner’s Title Insurance Policy? Overall Title Insurance protects the interests of property owners and lenders against legitimate or false claims made by previous owners or lien holders. In effect, it insures the investment unlocking its potential as a financial asset for the current owners. Just a few reasons that it is so important to maintain your Owners Title Insurance with a Title Company.
- Dollar-for-dollar, Title Insurance may be the best investment a property owner can make to protect their interest.
- According to ALTA, title problems are discovered in more than 1/3 or residential real estate transactions. These “defects” must be resolved prior to Closing. The most common problems are existing liens, unpaid mortgages, and recording errors of names, addresses or legal descriptions.
- An Owner’s Title Policy protects the owner for as long as he or she has an interest in the property; and the premium is paid only once, at Closing.
- Title Insurance is different from other forms of insurance because it insures against events in the future, as health, property or life insurance do. Title Insurance is loss prevention insurance.
- Title Insurance Companies rely on a search of existing records to identify possible defects in order to resolve them prior to issuing a policy. The Companies perform intensive and expensive work up-front to minimize claims. The better they perform, the lower the number of claims.
- Research titles may be extremely labor-intensive since only about 15% of public records are digitized. The industry invests a substantial amount of time and expense to collect and evaluate title records. As a result, the industry’s claim are low compared to other liens of insurance.
- Title Companies access, assemble and analyze title information, in addition to handling Escrow and Closing process so that they are able to provide customers with the most comprehensive service.
All Title Companies are held to a higher standard of business practices. They must be accountable for all the research and implementing all the guidelines required by law. The duty of the real estate agent is to connect his or her clients to a Title Company they are comfortable with. Although many selling agents will work with one they often find themselves working with other Companies when they are the listing agent. Communication between the realtors and Title Company is paramount. Everybody must be on the same page to avoid delaying the Closing.
Earlier this week the Senate jumped into the fray, releasing its own proposal for tax reform. The Senate’s proposal creates significant headwinds for homeowners and homebuyers, while providing only a temporary cut for middle class homeowners.
What Stays the Same?
Like the House bill, the Senate chose to change the definition for capital gains so that a home seller must have lived in their home for at least five of the prior 8 years. This change would affect 12% to 22% of home sellers, locking in some inventory and potentially changing the trade-up purchase process.
The Senate also proposed to eliminate personal exemptions as the House did, but they chose to increase the child credit to $2000 per child. This latter change is more generous than the House’s $1,600 credit per child and $300 for each parent.
Pouring SALT in the Wound
Unlike the House bill, the Senate chose to eliminate all state and local taxes (SALT) including state and local income and sales taxes as well as state and local real estate taxes. This change will make it more difficult for homeowners to itemize their mortgage interest and when they do, they will face a much lower benefit from home ownership. In a perverse way, only those who can afford very expensive homes will be able to benefit from the real estate provisions of the tax code.
The generous $24,000 standard deduction for couples who are renter or owners provides little support for renters who move to ownership nor does it guarantee that tax cuts today will be utilized to boost housing affordability in the future. Worse, when this provision expires in 8 years, both groups will be worse off.
Time Does Not Heal All Wounds
Most forecasts are for home prices and mortgage rates to rise in the coming years. The chart below shows how the proposals from the House and Senate compare with current law. The orange bars depict the difference between the Senate proposal and current law. A home buying family of four with an income of $100,000 or less would see a gain, while upper-middle income buyers would face a tax hike. However, in 5 years1 that tax cut would disappear for nearly all middle-income home buyers as mortgage rates and prices rise (red bars). Finally, after 8 years, the tax cuts and enhanced standard deduction both expire letting virtually no buyers benefit under the plan (dark blue bars).
The Senate’s proposal reflects many new changes, but retains many facets of the House proposal. While some changes help middle class homeowners today, it appears that the changes quickly wear out and are worse in the future.
In today’s real estate world Buyers have become wiser, researching important facts not only about the houses they’re interested in but also about the communities where the homes are located. Essential that real estate professionals show their value by keenly understanding the factors influencing home values in order to help and influence those research-savvy clients.
Study these four factors in your market:
- Location. This is nothing new; everyone knows location is extremely influential on home values. But it might be underutilized in the marketing listings. A great location is something sellers can capitalize on today more than ever, whether it’s a city, neighborhood, proximity to amenities, or the view according to most Agents
- Community statistics. School district performance, crime rates, walkability, and the number of establishments such as convenience stores and restaurants are factors that can influence home values, Agents agree, also influencing home buyers.
- Home updates. Improvements and renovations can have a dramatic effect on a home’s value. Take a look at comparable properties in the area to understand which updates will give your clients the most bang for their buck. Changes in flooring, wall paints, doors, and even added rooms will add to the home value and appeal to buyers.
- The neighborhood. “Home values are volatile, professionals agree. “Always do your dose of monitoring neighboring home prices. This way you can properly put a tag price on your own not only for profitable margins but also to be competitive with other homes for sale.”
Daily Real Estate News
More new homes are coming equipped with front porches. Sixty-five percent of new single-family homes started in 2016 included a porch, according to a Census data analysis from the National Association of Home Builders. It’s only the second time since tracking began that new single-family homes with porches have moved back above 65 percent. For comparison, in 2005, 54 percent of new homes had porches.
Certain regions of the U.S. are showing higher preference for porches. For example, the East-South-Central region of the U.S. had the highest share of new homes started in 2016 with porches at 86 percent.
Positioning of porches have gone through a number of architectural changes. Front to back, side to side, etc. Front porches on new homes tend to be more common than side porches. Also, most new home porches are open rather than screened.
The average size of a front porch on a new home is about 60 square feet. The materials used often tend to be concrete and treated wood. However, some regions—like the Mountain and Pacific areas of the U.S.—tend to favor redwood over treated wood for their front porches.
Personally I find porches to be a PLUS. Porches tend to make folks more happy. Sitting or lounging on a porch generally can be most relaxing. Especially when the porch overlooks your backyard. Front porches also can be uplifting as well. Gives you an opportunity to tune into your neighborhood. Passer byes who don’t have a porch subconsciously are envious of your position wishing they too had their own.