Kerry Plowright asked: As the name suggests, Buyers Agents are the intermediaries between you the buyer and a vendor or real estate agent, when transacting a property purchase. The theory being is that traditionally the real estate agent operates for the vendor (seller) and the Buyers Agent works for the buyer.

The benefits in recruiting a good Buyers Agent is they can take the emotion out of purchasing, versus the true value of what a property is worth. This is particularly advantageous for the first time investor, whom may have bought their principle place of residence on the feeling and comfort the home offered. From an investors point of view it is purely economic driven. The questions one must consider are, will it appreciate in capital value, will it provide good rental return, does the property offer low maintenance in the future, and is it close to community and public services. These things are much more important than how cute or pretty the property is.

Who uses a Buyers Agent? People that are time poor, particularly if your work or business commitments do not allow you the freedom to search various properties. Interstate investors may find it particularly beneficially in employing a local Buyers Agent whom has a greater understanding of that geographic market. The Buyers Agent can assist you in creating a short list of suitable properties which will allow you to make a quicker more informed decision, especially if you need to fly in to view the search results within a small timeframe.

Corporate relocatees can easily leverage the services of a Buyers Agent regardless if it is company funded or not. Most offer a Home Search Consultant service that not only will help you identify a suitable home, but can also provide exceptional local knowledge that will help you find basic essential services that we take for granted in our old home or suburb. Finding out this type of information before you buy is invaluable, more so when you have no knowledge of the region as is the case with a lot of corporate transferees.

International investors naturally would tap into a Buyers Agent service as the tyranny of distance alone is no match for having somebody on the ground. They can negotiate on your behalf, bid at auction and generally offer all the services that you utilise to make the sale. International investors need to make themselves aware of any government policy as there may be limitations to foreign ownership. An internet search enquiry will help identify if there is a Foreign Investment Review Board, or government department, that can assist with any enquiries.

So what does the Buyers Agent do for you? They will ask you what you are specifically looking for in a home or commercial property, how much you can spend including government and bank charges, and what the intended use is of the property, be it investor or owner occupied. They not only research your specified criteria, they can co-ordinate pest and building inspections, arrange a quantity surveyor, liaise with the relocation management company, refer you to mortgage providers or even recommend an excellent property manager, if purchasing an investment property. They can visit open homes, determine the market value, and most have a registered valuer to provide peace of mind.

Buyers agents generally work on a 60 day contract to find a short list of suitable properties and normally will request a minimum of $500 which is non refundable to start working for you. Their fees vary so do your home work. As a guide most offer three levels of service.

1.Search, evaluate and negotiate.

2.Evaluate, negotiate and bid at auction.

3.Full service includes all the above along with co-ordinating other providers through to settlement date on your behalf.

Fees for auction on average are $1,100 for a successful negotiated sale or $440 for turning up and no sale. The total cost again varies with some charging a flat rate of $1,500 for option 1 or 0.75% to 2% of the purchase price, less the initial deposit.

Generally speaking Buyers Agents are specialists at seeking out your desired property and with their negotiation skills can conceivably save you money, even after their fees are taken into account. Good luck!

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Kristin Abouelata - Home Loans asked: “In order to promote the production of more affordable new housing units for very low, low and moderate income individuals and families in the state, to promote the preservation and rehabilitation of existing housing units for such persons, and to bring greater stability to the residential construction industry and related industries so as to assure a steady flow of production of new housing units…”

Many times, people have heard of THDA and are confused, thinking that THDA is a certain loan type. In fact, it’s lending agency. All THDA mortgages must be insured by private mortgage insurance, FHA, VA or RECD And as these loans are intended for low to moderate income families or individuals, there is a income limit and acquisition cost limit. Also, you must be a first time homebuyer unless your home is in a targeted area.

Why is THDA so fantastic for a first time homebuyer? Well, it comes down to money. THDA offers a below market rate and will allow up to 100% financing. Have you been reading the papers lately? It’s not so easy to find 100% financing these days. Unless, that is, you’re a first time homebuyer. It also has programs that allow for down payment assistance via grants from certain approved agencies (if your loan type requires a down payment). If you have satisfactory credit and the home you wish to buy meets THDA’s standards, then you’re in business.

All THDA mortgages are 30 year fixed rate loans, so you needn’t worry about finding yourself with an ARM loan (adjustable rate mortgage) and a new payment you can’t afford in 3 years. And THDA allows lenders to only charge customers a standard 1% origination and .25% discount fee. It also closely monitors fees associated with the loan. THDA really looks out for the best interest of the first time homebuyer. If you are eligible for a THDA loan, you can feel pretty certain that an unscrupulous lender can’t take advantage of you because THDA won’t let them. For so many people, buying a home is pretty intimidating. THDA takes away the uncertainties a buyer faces with its guidelines and lending practices.

If you do apply for a THDA loan, be prepared to document your credit worthiness. THDA loans require slightly more documentation than your average loans because of the uniqueness of its product. In order to offer more, THDA asks for more – ensuring you qualify for its pretty awesome program. Sounds like a fair trade, if you ask me.

What are the disadvantages of a THDA loan? Not many. They do have a federal recapture tax if you sell your home within the first nine years of owning it. But it sounds scarier than it really is. I’ve heard that only about 1% of THDA customers actually pay this tax. That’s because a bunch of really great things have to happen to you in order for it to actually apply to you. And if those great things happen to you, paying the recapture tax won’t matter much to you anyway. I’ve been in the business for 16 years and have only heard of one person actually having to pay one. He graduated from medical school and his income when through the roof. His property was sold above market value than for the area because it was adjacent to some property that a huge retailer wanted to purchase. Again, good things have to happen to pay the recapture tax. So, you shouldn’t be afraid of it.

More people need to hear about and take advantage of the THDA loan programs. It’s such a great product and really helps the community and the housing industry. If you’re a first time homebuyer or think you’re in a targeted area, make sure you ask about THDA to see if you would qualify for a loan. You won’t regret it!

The First Time Home Buyer Handbook

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Roy Landers asked: The subprime mortgage real estate fiasco has created a glut of residential real estate in the real estate market. Foreclosures are on the rise and it doesn’t look like the end is in sight for at least another year. Thousands of home owners are losing their homes because adjustable mortgage rates have adjusted upward and caused increases of monthly mortgage payments so high that the affected home owners just can’t make the payments. It is inevitable, under these circumstances that many homes go into foreclosure and banks have to take them back.

While it is unfortunate that many home owners are losing their homes, the opposite and upside effect is that the real estate market is now a boom for the first time home buyer.

Mortgage interest rates are still low and banks and real estate lending institutions have 30-40 year fixed loans for home buyers. With home values in many areas around the country, such as California, plummeting anywhere from 30-50 percent of what they were a year ago, the market is wide open for buyers who have never owed a home and would like to do so now.

Lending institutions and sellers are very motivated now and are readily lending their ears to home buyers saying “lets make a deal” and deal they will. Here are some of the innovative and sensible ways home buyers can now acquire a home of their own when they are armed with some real estate homebuyer education.

1. Use government grants and loans for down payment assistance.

The federal government in 2003 established the American Dream Down Payment Act. This federal law has allocated $200 Million a year since 2003 to assist with arranging down payments for first time home buyers. This is a good indication of just how serious the government is about helping Americans make the American dream of home ownership come true.

Fannie Mae, one of the many federally supported programs for home buyers has programs such as the MyCommunity Fixed Rate Mortgage. This unique program is ideally suited for the first time home buyer. It provides for low down payment, high loan to value with broad flexibility, including nontraditional credit considerations allowing for the buyer to qualify for the loan. It also has special financial options to serve public servant professions such as teachers, police officers, firefighters and health care workers, and people with disabilities.100% financing is available with 30-40 year fixed rates. Check out the details at http://www.efannie.com.

These funds, in addition to other government funding sources, are made available through federal, state and local government agencies that provide down payment assistance to their citizens on a case by case basis.

Every major city and county has one of these programs. One need only exercise a little initiative and these funds can be acquired. Contact your local housing authority, city managers office or county administration department to find out about them and how to apply.

2. Use non-profit agency down payment assistance

Another little known, but long existing opportunity for first time home buyers to acquire help with down payment assistance is the numerous numbers of non-profit agencies around the country that provide free down payment assistance to home buyers. The Community Reinvestment Act of 1977, enacted by Congress in 1977 and revised in 1995, requires banks located within identified communities to make loans and reinvest the depositors’ deposits within that community.

For decades now and continuing into the future banks have been making huge amounts of funds available to invest in targeted communities. However, the availability of the funds was not publicized in a significant way and many people did not and still do not know about these funds. Many non-profit agencies became aware that they could help in the community revitalization effort by creating a means whereby the banks could channel the funds through various home assistance programs that non-profits created. The non-profits that specialize in this type of program have grown over the years. Some are very large and are nation wide such as the Nehemiah Corporation - www.nehemiahcorp.org.

They get funding from the banks via the Community Reinvestment Act and other funding sources and then provide for down payment assistance and other housing assistance to persons desiring to own a home.

One of the high points of these programs is that the funding is often times not limited to first time home buyers and certainly is not limited to only low income home buyers. This creates yet another source of down payment assistance for the prospective home buyer. Given the numerous avenues of funding to assist in buying a home and the present market swing in favor of home buyers, buyers are now firmly in the driver’s seat.

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Lou L asked: (750+). My monthly income is 3000. I am interested in buying a condo (7 years old) which is priced at 399,900 and I am planning to put 5% down. I have met with two lenders..Lender A suggested 2 loans (to avoid paying the PMI) and Lender B suggested 1 loan. I would like to keep my mortgage payments as low as possible, and plan to live there for about 5-7 years. Any suggestions would be appreciated!

Let Your Mortgage Make You Rich

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First site to Offer Full Set of Networking Tools
for All Real Estate Professions, Including Development, Brokerage, Finance, Investment,
Appraisal, Construction and Government

MyDealBook.com, the world’s first website to meet the specific needs of cross-industry real estate professionals, launched today with more than 330,000 new members. The social media website is the only site aimed at bringing together professionals from all real estate-related industries, including 40 professions in areas such as development, brokerage, finance, investment, appraisal, construction and government. Cross-industry professionals from residential, commercial, industrial, retail and office segments now have a central place for networking, collaboration and business expansion.

The brainchild of Ryan Slack, PropertyShark.com’s former CEO, and his partners Mark Schacknies and Nima Negahban, MyDealBook.com addresses the specific needs of real estate professionals. “The more generalist sites, such as LinkedIn and Facebook, are not sufficient to meet the needs and growing challenges of real estate professionals,” said Slack, CEO of MyDealBook.com. “We’ve taken the best of social networking and combined it with tools designed to help our users’ businesses.”

Slack adds that while there are a few other websites aimed at real estate business, these sites only provide blogs and forums aimed at residential real estate agents and consumers. “In this challenging real estate environment, we aim to help real estate professionals increase the

number of market opportunities that will allow them to accelerate their business,” said Slack. “MyDealBook.com is a business tool delivered through a social networking site. Not only can members network with one another, they can use the site to manage projects and deals with all professionals involved.”

MyDealBook.com complements PropertyShark.com, the real estate data site which incubated it, and has leveraged PropertyShark’s established members of 330,000 users. PropertyShark provides detailed parcel-level property data and the tools for members to make the most of that information.

MyDealBook.com’s Features Specific to Needs of Real Estate Business

MyDealBook.com combines the best social networking techniques with powerful tools specific to the needs of real estate professionals. Its

features are designed to help users expand professional networks, find new business and manage projects. Features include user profiles, messaging, networking and marketplace listings, as well as:

Deals – features a unique deal management system that allows users to post their professional activities to gain credibility, promotion for their

projects, seek funding, market properties and share files

Mini-feed – provides users insight into the projects and deal flow within their network

Events – lists opportunities for real estate professionals to connect in person, including networking mixers, speed networking, conferences, training, site visits, fundraisers, sporting events, and more

Groups – enables users to join or form their own groups for specific purposes, such as organizing events, sharing deal information, collaborating, forming company teams, office networks and investment clubs

Natural groups – automatically groups users by company, profession, location, educational institution, professional association, state licensing and professional designation, to allow easy search and identification of potential clients, business partners, or service providers

Services – provides powerful tools to search and match users with complementary business partners

Jobs – provides its users with opportunities to find or advertise job openings specific to the real estate industry. The Jobs feature is scheduled for release in June

Specifications and Pricing

MyDealBook.com is now available, and membership is free. Premium subscription services will be available in coming months to provide powerful work tools such as: matchmaking referral services, VIP features and privileges which raise a user’s visibility on the site, e-mail contact tools and advanced group/event tools, such as the ability for members to charge fees for events or group membership.

With over 330,000 professional members, MyDealBook.com is the only professional networking site for the entire real estate ecosystem, including architects, developers, investors, appraisers, publicists, attorneys, lenders and 33 other distinct professions within the real estate industry.

Members manage their deals and projects, form groups, sign up for events and expand their professional networks, all with the goal in mind of doing more and better business. MyDealBook.com addresses the needs of all professional real estate participants, especially in a down market, by providing opportunities for self-marketing, deal advertisement, and locating investors/buyers.

Originally founded in May of 2007 by Mark Schacknies, a real estate developer, and Nima Negahban, MyDealBook.com was acquired in March 2008 by MDB LLC, a firm run by MyDealBook.com CEO Ryan Slack, who left PropertyShark.com to lead the new company. MDB LLC is a marketing partner of PropertyShark.com and leverages the existing user base of PropertyShark.com. MyDealBook.com is headquartered in New York City.

If you are interested in real estate social networking you may find these posts useful:

Who Won the Webby Awards - There are awards for social networking. There are also awards for things like best navigation, best visual design and best use of video. Then there’s best games site, best banking site, best real estate site, most humorous site and many …

Just what are “the basics” anyway? - There is no question that technology has helped me become more efficient and given me the ability to reach more buyers and sellers through my IDX website, “drip campaigns” and social networking. I sold a lot of real estate before my …

Social Media is Just Getting Started - Over the past few weeks I’ve been doing a lot of research into Social Media and the rapidly evolving landscape of social networking, data portability etc. What I’ve discovered is quite amazing and exciting. The timing of my research …

Web 2.0 Meets The Ice Cream Social (Network Your Network) - But, lets not forget about our OTHER social network…REAL PEOPLE! Real people that we speak to and see daily. From the grocery store clerk to our mechanic to our hair-dresser, we see potential clients on a daily basis…and we FORGET …

What To Do When The Phones Aren’t Ringing… - 2) Spend hours in the garden working out my frustrations of deals goe awry…and there are some doosies! 3) Spend another 5-6 hours working on social networking sites like Squidoo & Hubpage. 4) tweeking my Charlottesville Real Estate, …

Web 2.0 based Wesite Links - http://ziki.com social networking site. http://zillow.com real estate property value estimates. http://zimbra.com open-source enterprise messaging. http://zingee.com social file sharing service. http://zipingo.com social local business …

Web 2.0 Professional Networks – Are you missing out? - Everyone within the SEO Industry spends a significant amount of time concentrating on harnessing traffic from social networking sites, but is this an effective method for your business? With over 300 social networking sites, …

Dog and Pony Shows — it’s all about Social Media - This past week, I presented a session to real estate agents at Coldwell Banker Hickock and Boardman Realty in Burlington, VT on best practices in social media — specifically we talked about how to utilize blogging and social networking …

Staying True on the Internet - Blogs, podcasts, and social networking Web sites are becoming crucial marketing tools for anyone in real estate. But unrestrained passion for these powerful communication vehicles could put you at odds with the REALTOR® Code of Ethics. …

Trulia Ad Network: Keeping More Cash from Real Estate Search - Related Articles at Mashable! - The Social Networking Blog:. Trulia Releases Useful Data on Real Estate Q&A Forum Activity Trulia Adds Google StreetView to Home Listings Trulia Offers Private Label Real Estate Listings to Web Publishers …

Stop Sending People to Your Competition - Erasing Traces of Your … - First, Google may be sending traffic to your former real estate company. And second, your former real estate firm may cry foul because they think you are continuing to represent yourself as being tied to the company. …

NWI Blogging community - Northwest Indiana Real Estate - RSS Feed for Northwest Indiana Real Estate Another of my sites, focused on real estate trends especially here in Northwest Indiana. Key political rants here focus on cities and towns and their hunger for …

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Typical situations covered by most house insurance policies are damage to the property, possessions, theft of items, acts of vandalism and of course, fire. There is normally a limit on how much will be paid out which would cover the average home but there will almost always be a deductible to include in the calculations as well.

There are many insurers that can provide you with a homeowners insurance policy that provides coverage for your precious personal possessions and now most of these allow online applications as well. All you need to do is visit their website to obtain quotes, preferably from as many good sites as you can, to get a good idea as to what is there on offer and choose the one that suits you the best.

Whilst you compare the insurance quotes, which should help you to understand which policy will offer the best benefits, it is important to consider the flexibility of the policy rather than be tempted merely by a low premium. If you have a mortgage, your lender probably requires homeowners insurance and even if you do not have a mortgage, you probably want to cover your home against damages and liability.

Although monthly premiums may be an issue, it is quite common for discounts to be available for people starting a plan with a new insurer. It is also surprising how much the monthly premium can be reduced by adjusting the deductible from say $500 to $1,000,  so why not try it.

Many people make the mistake of overlooking the replacement cost of possessions and need to realize that a policy must allow for the increase in prices of products when they come to be replaced. If you don’t want to shop for replacements at your local thrift shop, you will need to consider having a ‘replacement value’ policy.

The value of each persons home is not just the building replacement but also the possessions and other important pieces that may have taken years to collect like furniture or works of art for instance. To ensure you have full homeowners insurance cover, ensure you have included everything that needs to be protected, although most plans cover a variety of situations.

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Trevor (the author) attempts to clarify which type of dual agency should be outlawed. He believes that 2 different agents in the same company each representing a buyer and seller is fine. It is when one agent represents both buyer and seller that there is a problem.

To begin the first instance is dual agency, however more specifically designated agency.

The story that turned Trevor into a non-believer involves an on site agent who wrote up a contract for Trevor’s cousin. Now apparently the contract was very “seller sided” with no inspection contingencies and very liberal finance contingencies. Added to that the fact that the agent pushed the cousin towards the builders “preferred lender” which happened to be the agent’s husband. Oh and the agent had the cousin sign about being told about different forms of agency, however these agencies were not explained.

Here are the issues I see with this.

Foremost is the “Working With Real Estate Agents” lacking presentation. This is not an isolated incident. In North Carolina this is the number 1 most received complaint to the Real Estate Commission that buyers and sellers were not fully aware of who the agent represented in the transaction.

Fact- The agent should have clearly explained each form of agency that exists when working with a real estate professional.

With respect to the contingencies in the contract the two the author cited are pretty standard to all pre-approved real estate contracts in most states.

Fact - In a dual agency situation where the same agent represents the buyer and seller the only way to handle it is just to act as the go between with NO COUNSELING to either side. The agent should have filled out the contract with the standard contingencies just as they would have for any other buyer not in a dual agency relationship.

The cousin was referred to the builders “preferred lender” so agent could receive additional bonuses.

Fact - There is absolutely nothing wrong with an agent receiving commissions or bonuses as the buyer agent, seller agent or even acting as the lender (if licensed to do so.) The truth is the majority of buyers could care less what you make and the seller doesn’t care where the money comes from…AS LONG AS YOU DISCLOSE EVERYTHING TO EVERYONE. This agent seems to have not provided full disclosure to the cousin.

Personally I believe this is not a case of a dual agency problem, it is a case of an agent acting out of greed, non-disclosure and doing a disservice to both the buyer and the seller.

If one were to believe the author’s stance that dual agency should be outlawed then another huge situation arises. That situation is that if you cannot act as a dual agent then you legally CANNOT SHOW ANY HOMES THAT ARE LISTED with your company. Now if you are a small operation this may be no big deal. On the other hand if you are one of the larger franchisers with 400+ agents this could put a huge amount of qualified homes out of the reach of your well qualified buyer.

Bottom line is as a real estate professional you must always be honest and disclose everything no matter how minor you may feel it to be.

Note: There is a poll embedded within this post, please visit the site to participate in this post’s poll.

Here are some current conversations on dual agency from the sphere:

Agency- Dual or No Dual? - By the way, OK-yes it (dual agency) is usually referred to to as Limited Representation in today’s more popular descriptive term. But for now, I’ll use continue to use “dual agency” in this discussion. …

Dual Agency: Using the Seller’s Agent as Your Buyer’s Agent - I would not undertake dual agency myself. If I do find a buyer for one of my listings, I’ll refer them to someone else for negotiations, or at least get them to sign that I am representing the seller, not them. Everyone in the industry …

What consumers should know about agency - Some of these conversations have revealed some mis-information about dual agency. Dual agency happens only when an agent, or the agents broker, or more than one of the brokers agents are working on behalf of that broker and representing …

Is Dual Agency in the public’s best interest? Part 1 of 2 - Realtors practice dual agency all the time - successfully. Never had I had someone remark how much they appreciated their agent representing both sides. I have been told numerous times by clients how they perceived their agent in a …

Florida rules require full disclosure of dual agency - The Florida Department of Agriculture and Consumer Services on Friday released finalized rules and regulations designed to stop deceptive practices and promote transparency at horse sales in Florida. Read More……(read more)

Bad Words!! Dual Agency!! Bad! - Active Rain has had so many articles based upon dual agency recently. Dual Agency comes in many different packages. Arguments ensue about how the agent will divulge information to the other client and all this is illegal, immoral, …

What Is All This Talk About ‘Dual Agency?’ - Definition of Dual Agency: A situation where one Broker represents both the Buyer and the Seller. Although legal in Arizona, provided it is fully disclosed and consented to by all parties, it is also of questionable ethics – at best! …

Real Estate Attorneys LOVE Dual-Agency Cases ~ LOVE Them - Recently while holding Open Houses, some “customers” asked if I would represent “both buyer and seller” (dual-agency) and if so, would they “get a good deal?” Usually, I ask them to finish viewing the home, first. …

Understanding Real Estate Agency [4.] - Dual agency is a relationship in which the brokerage firm represents both the buyer and the seller in the same real estate transaction. Dual agency relationships do not carry with them all of the traditional fiduciary duties to the …

Why LP doesn’t practice dual agency… - Per Tennessee Law: “Dual agency” refers to a situation in which the licensee has agreements to provide services as an agent to more than one (1) party in a specific transaction and in which the interests of such parties are adverse. …

The Single-agent Dual Agency debate is revitalized at VARBuzz - As a listing agent, how can I promise to do the best job possible for the seller, who hired me to protect his interest and sell his home for the best price and terms, then turn around under dual agency where I cannot give him any advice …

Stepping up to the plate - Single Agent Dual Agency - On first contact with each seller or buyer I explain agency with emphasis on Single Agent Dual Agency. I let them know up front that my firm cannot offer Dual Designated Agency. I send them home with information on Agency to read. …

Is Dual Agency in the Public’s best interest? Part 2 of 2 - If we quickly look at some possible alternatives to dual agency we may learn something about, not only the feasibility of its removal but also about what truly stands in the way of change. Please keep in mind that designated agency …

Has DUAL AGENCY Run It’s Course? - Some states do not allow dual agency. Others do. Virginia is one that does. Is the trend towards doing away with this type of representation? In fact is dual agency a form of representation or does it really mean that neither the seller …

Dual Agency and Buyer’s Today - This buyer figured out that for him, he did not want to be involved in a dual agency situation when he finds a property he wants to buy. He wants his own agent and he wants access to information about the house and the comparables and …

Why I Don’t Practice Dual Agency - As a buyer or seller you may run into the concept of dual agency. That is basically where an agent “represents” both sides of a real estate transaction. Say my company has a listing. I also have a buyer under a Buyer Agency Agreement. …

The Truth About Dual Agency - I truly believe that Ilyce Glink is doing an injustice to dual agency in her opinion piece. Now, it was apparent that the real estate agent referenced in the opinion piece did not properly conduct a dual agency situation. …

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With a daughter starting in the Fall we have been extremely busy researching college scholarships and preparing for the change.  Through this research I discovered that there is a very substantial tuition cost difference between in-state and out-of-state rates.  This prompted further investigation and what I found was very enlightening.

Based on this research I created a lens on Squidoo that goes more into detail on saving thousands on in-state tuition for those that live out of state.

Be sure to check it out.

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One of the crucial pieces of the real estate puzzle you want
is title insurance. Here is a brief article from Bill on
“Title Insurance and How to Save up to 90%”

If you have ever bought or sold real estate, you have
probably paid for title insurance. What exactly is title
insurance? Why do we need it? How can I save money on
title insurance? These are common questions asked by real
estate investors.

Whenever title passes, the seller usually gives a deed
containing certain guarantees or “warranties” (hence the
name “Warranty Deed”). The seller warrants that title is
good, that is, no one will come challenge the integrity of
the title.

For example, if a deed that was passed before him was
forged, all subsequent transfers are void. Other problems
may be more subtle, such as a deed with an incorrect legal
description or misspelled name. Any irregularities in the
“chain of title” will place a “cloud” on the integrity of
the title.

The Title Search

When you are ready to sell a property, a title search is
performed by a title company or attorney. The title
searcher follows the chain of title back about 50 years,
tracing the ownership through deeds recorded in pubic
records. The searcher also checks to make certain that
previously recorded mortgages and other liens have been
released.

Based on documents found in public records, the title
company or attorney will prepare a “title insurance
commitment.” A commitment is a statement that based upon
certain documents found by a search of public records, the
company will issue a title insurance policy for a certain
fee.

The Title Insurance Policy

The title insurance policy, unlike most insurance policies,
covers past events. For example, the daughter of a previous
owner claims that her father conveyed a deed while not
mentally competent, the current ownership may be in
jeopardy. The title insurance company will defend the claim
and pay for any damages (usually the value of the property).

The policy does not cover claims based on events that occur
after the policy is issued. Furthermore, the policy usually
contains numerous exceptions, such as claims based on
information undisclosed to the title company. Thus, if you
are aware of any potential problems that might lead to a
claim, your failure to disclose this information to the
title company will lead to a denial of a claim based on
those events.

Ask for a “Re-issue” Rate

A title insurance coverage starts from ancient history and
ends from the date you transferred title. Since most
transfers are insured by a title company, the longer you own
the property, the more the policy costs. Consider this: if
you buy a property and the transaction is covered by title
insurance, then you sell it six months later, what are the
chances that something went wrong in the last six months?

The answer is that the chances are slim to none, so the risk
of a claim against the title are slim to none. For this
reason, title companies offer a “re-issue” rate. The re-
issue rate is a discounted price (usually about 40%) on the
title insurance policy if another policy from a title
company was issued on the same property within the last few
years.

The rate is lower because any claims that arise from events
before the previous owner are covered by the previous
policy. Thus the new policy really deals with the risk of
claims from events that occurred while you owned it.

Try a “Hold-Open” Policy

If you are buying a property with the intent of re-selling
it within a year, ask the title insurance company for a
“hold-open” policy. For a small fee (usually an additional
10% on the policy), the title company will hold a title
commitment open for a year or more.

Rather than issue a policy based on the first transfer (from
the seller to you), they will issue a policy on the second
transfer (from you to the next buyer). Since the seller
usually pays for title insurance, you can pay the additional
10% when you buy, saving 90% on title insurance when you sell.

Learn how to sell your houses in 30 days or less guaranteed.

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