Check your Local Real Estate Probate Laws

The probate process in each state disposes of real estate once a person dies.

When a person dies, leaving behind property, that property gets distributed according to the state probate laws. Each state has different laws, so this process varies from state to state. However, there are some generalities that do exist in any probate case involving real property.

When a person dies, the property they leave behind is generally referred to as their estate. Under the probate laws in each state, probate property gets distributed either in accordance with a last will and testament, or the bylaws of intestate succession. Whenever real estate is part of an estate, these same procedures and rules apply, though, there are specific aspects of probate law that only applied to real property. Check your Local Real Estate Probate Laws

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The Purpose of a Property Survey

My clients frequently raise the issue of why does a property survey have to take place.  The question is almost always the same. “Do I really need a survey for this property or am I just throwing money away on an unnecessary exercise?”

If a mortgage lender, or bank, is involved, you probably won’t have a choice. Most banks and mortgage companies require a survey at the loan closing. It’s for their protection, and your protection. Even if it’s a cash sale, I always tell buyers to get the survey.  The buyer needs to know the exact location of the property boundary lines in order to know precisely what is and what isn’t part of the property.

Over the years, the exact locations of boundary lines can often get confused or forgotten by the present day owners.  Many times in the past, owners of adjoining properties just tried to remember property lines and boundaries and no one paid much attention until one or the other owner did some property improvements, and all of a sudden, one property owner put up a new fence that was now encroaching on the other owner’s property.

Another common occurrence is an improvement that encroaches on a utility easement. In many cases the consequences of such an encroachment are almost nonexistent. In others, they may be catastrophic. If a house sits directly over a power easement through a lot, the power company could make the owner move the house. Fortunately, in unusual situations like this, power companies will usually agree to re-route the utility easement or (if it isn’t being used) vacate the easement entirely.

When considering a property purchase, it’s easy to assume that an existing fence or hedge accurately reflects the actual property boundaries. All too often, that’s not the case. Never assume that the owner’s recollection is accurate or that the location of greenery is related to actual legal boundaries. Even seemingly harmless encroachments can cause legal problems down the road. When that happens, the question really becomes, “who pays for the remedy?”

You want to know before the loan closing, that your property is clear of any significant encroachments. Even if you decide that an encroachment is acceptable to you, it could have a negative impact on your ability to sell the property in the future.

A good survey will not only reflect the location of all physical improvements and public utility easements, it will also delineate public right-of-ways. 

Surveys also depict recorded building setbacks and the location of fences. If you plan to build a new home or addition that will extend into the building setbacks, make sure that you can get a variance to the setbacks prior to purchasing the property.

If you buy an existing home that violates any setbacks, the possibility of a challenge becomes increasingly unlikely and unsupportable with the passage of time. Even if the house is old, a fence extending into neighbor’s property or into a public right-of-way, may have to be removed or relocated if the city or adjacent property owner objects.

A survey can also record physical evidence that someone is using the property in a manner inconsistent with your exclusive ownership. For instance, there might be a pathway crossing through your property from a neighbor’s property. This could be evidence of a prescriptive (an unrecorded right to cross the land based on usage over time) easement by neighbors. Blocking their usage by putting up a fence may seem a reasonable solution, until they file suit to force you to take down the fence and allow continued use of the path across your land. You may legally prevail in fighting the suit, but the effort could be costly.
The survey normally becomes an integral part of an Owner’s Policy of Title Insurance that is issued as part of the property closing.  Surveys help you identify and understand any potential problems associated with a property. They can provide useful information for deciding whether or not to complete the purchase.

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Purpose of Homeowners Association (HOA)

  *A Homeowners Association, (HOA) is a legal entity that governs a community of homes.  The community can be a subdivision, condominiums, townhomes, or any planned community.  HOAs operate within state law to enforce regulations **(CC&Rs) and collect assessments from homeowners, while also taking responsibility for the care and maintenance of the common areas of the community of homes, condos or townhomes. (According to the **CC&Rs for that community)

Reasons for HOAs:
In existence since the early 1960s, HOAs were developed for a multitude of reasons, including the following:

*They helped developers and builders of the subject communities, by allowing them to transfer the day-to-day operations of their properties to an association of the property homeowners, once a certain percentage of homes were sold.
*They benefited municipalities by providing many of the services that they would otherwise need to provide, while still increasing the tax base.
*Homeowners in the HOA gained a point of contact to handle all maintenance and beautification of the common areas.
*Community issues could be handled by the HOA in accordance with the bylaws **(CC&Rs) established for that community.
*Property values could be preserved through consistent maintenance of common areas and by establishing standards for the maintenance of individual homes within the community.
*Establishing and running an HOA requires thorough knowledge of the local laws, and the community’s **CC&Rs as well as the many administrative considerations that are involved.  Some HOAs are operated by the homeowners of the community, and some HOAs are managed by outside management companies.

**CC&Rs:  Covenants, Conditions and Restrictions.
These are the written rules, limitations and restrictions, regarding use, mutually agreed to by all owners of homes, in a subdivision or condominium complex. CC&Rs may limit size and placement of homes, exterior colors, pets, ages of residents, use of barbecues and other conduct to protect the quiet enjoyment of the various residents. CC&Rs are enforced by the homeowners association or by individual owners who can bring lawsuits against violators, and are permanent “run with the land” so future owners are bound to the same rules. Most state laws require that a copy of the CC&Rs be recorded with the county recorder and be provided to any prospective purchaser. The CC&Rs are written by attorneys, lawyers during the development and permitting stages, and are filed with the municipality who permits the community of homes.

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Meeting People and the Community after Moving

 Moving is a whirlwind of activity usually packed into a short time frame.  But after you start getting settled, you may realize you don’t really know where the best restaurants are, or maybe the hardware store, even the gas station with the best prices. This can be a scary period for you.  The transition sometimes is the hardest part of any move.  Here are some ways for you to get out, meet people and become apart of the community.

*The first order of business should be to get your kids active in the hobbies or sports they enjoy, and extra events at their new school.

*Subscribe to the local newspaper. Nothing can make you feel at home more than knowing what’s going on in your community.  Good source for business information also.

*Join the PTA or volunteer at school. Parents who are involved at school will find many social activities as a bonus.

*Visit the library and recreation department. Depending on your interests, all of these can be an excellent way to get connected and meet people with similar interests. Stop by the Chamber of Commerce and City Hall. There should be plenty of information on local businesses and services.

*Get a map and drive. There’s nothing like short family drive on the weekend to help you learn the lay of the land. A map is perfect for learning the community.
 
*Groups and clubs. Whether it’s the Girls Scouts/Boy Scouts or 4-H for your kids or a group at a church, there are always activities available.

*Meet your neighbors.
Don’t be hesitant about meeting your neighbors. When you see them out front or know they’re home, just knock on the door and introduce yourself. They might be to busy with their day-to-day lives to stop by.  So go ahead, make the first move.

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Understanding Your Credit Rating

If you are thinking about buying a new home, or vacation home or income property, or real estate of any type, you need to start thinking about your credit reports and what they say about how you pay your bills, because the mortgage lenders will want to see them also before approving your loan. How well you have handled your credit obligations in the past is going to determine the loan you get, or don’t get. 

One good thing is that your credit rating is available to you.  Your credit history is maintained by three different private companies called credit reporting agencies: Equifax, Trans-Union and Experian.
(Their websites and phone numbers are listed at the end of this article)
You can order your report by phone and charge it to your major credit card if you like. It usually takes about a week to arrive. You can even order your report online directly from each of the three agencies, but they have to verify your identity before you can obtain any private information.
 
You want the information directly from each reporting agency, even the mistakes and blemishes and all, so you can see what exactly is on each one.  If you see obvious mistakes, you can get them cleared off in time to start your loan process. Be sure to order a copy from each of the three companies, because if an error exists on even one of the reports, it may negatively affect your chances of getting the loan you want. It is not unusual for one company of the three, to have a mistake on your credit report. 

Your credit report lists all the consumer credit that has been extended to you over the past seven years. It will show what your highest balance has been and what your current balance was on the date last reported by the creditor. It will also show how many payments you made on time and how many late payments were late. Late payments are grouped into categories showing how late you were.  (For example: if your credit card payment was over 30 days late one time, it might not be considered too serious. But if payments were over 60 days late four times, over 120 days late two times and over 180 days late one time, you have had a serious problem. That problem is going to impact your ability to borrow money)

It makes sense to find out about your credit and correct any errors now. Regardless of how many credit problems you have had in the past, there are two good points to remember.  First, negative credit information can be reported in your credit file for only seven years. After that, it drops out and cannot even be considered. The one exception is bankruptcy, which can be reported for 10 years. But after that you start with essentially a clean slate. Second, lenders are much more concerned about how you have handled your credit recently than with what happened several years ago. Even if you have had a bankruptcy, if you have kept your nose clean and paid your bills on time since then, it is possible you could qualify for a loan after as little as two or three years.

One of the best developments in the world of lending has been risk-based pricing. That’s a five dollar term for the ability of lenders to offer higher priced loans to borrowers based on their demonstrated ability to repay. In other words, even if you have slightly fractured credit, you can still likely get a loan. It just may cost you a little more.

 To Reach the Three Credit Reporting Agencies:
1  Equifax can be reached at 800-997-2493.
2  Trans-Union  can be reached at 800-888-4213.
3  Experian  can be reached at 888-397-3742.

Or search them out on the web.

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