By Phil Halverson, Esq., Halverson & Associates
Reprinted from an article published by the Bar Association
This article discusses common legal questions that arise in the purchase and sale of real estate.
Buyers and sellers of real estate sign contracts and make important personal, financial and legal decisions. It is intended to help buyers and sellers of property make informed decisions when making or accepting offers, seeking financing or transferring title to real estate.
Real estate is probably the single largest acquisition a person will ever make. It is important to consider these obligations when deciding to purchase property.
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Click here to see Part Two
14. What Is A Title Report?
Information about the property such as loans, easements, leases, etc., are recorded on the title to the property. Copies of these documents are usually kept at the County Recorder’s Office. It is therefore very important that the title be searched when buying or selling real estate. A search of the title reveals the name of the current owner of the property, the legal description of the property, whether or not the owner has mineral rights, and certain claims, liabilities or trust deeds attached to the property.
15. What Is A Cloud On A Title?
Liens are notices or warnings that someone has a claim against the property. Claims or interests that are commonly found on a title are options to purchase, mechanics liens, and lis pendens. These represent money or ownership interests in the property that should be removed before the property is transferred to a new owner.
16. What Are Easements?
An easement is a right that someone other than the owner of the property has to use the property in a particular way. An easement may continue to affect the property even when it is transferred to a new owner. Easements vary and may include the right of a neighbor whose land has no street access to use a strip of your property to reach the street, and to the right of the city to run a sewer line across your land.
17. What Is Title Insurance?
Most buyers want to obtain clear title to the property. Free of liens, unpaid taxes, judgements, etc. To get clear title it is necessary to have all unacceptable claims, liabilities and charges against the seller’s title removed before title is transferred to the new owner. A title insurance company will for a fee or premium investigate the title and assist the removal of liens, etc. The title insurance company issues an insurance policy to the buyer guaranteeing clear title.
18. How Should I Hold Title To Real Estate?
Joint Tenancy. Joint tenancy means that the property is owned by more than one person. Joint tenants have a right of survivorship, that is, the survivors become the sole owners of the property when one of the joint tenants dies. For example, if two friends were joint tenants of a house, and one died, the surviving friend would automatically become the sole owner of the property. The property would not become part of the estate of the deceased.
Tenancy In Common. Tenancy in common means that there is more than one owner, and that each owns a individual share of the property. The shares can be equal or unequal. Each owner is free to sell his or her share of the property. There is no right of survivorship, so owners can will their share of the property to a person of their choice. If two people decided to buy a house, but could not contribute equal amounts to the purchase price of the house, they could purchase as tenants in common. One could own 70% of the property and the other 30%. If the property were sold, the proceeds would be divided accordingly between the two owners.
There are several other ways of holding title including, in California, community property.
19. Should I Use A Broker To Sell My Property?
If you consider using a broker to sell your property. You will be asked to sign a listing agreement. A listing agreement is a legally binding contract between a seller and a real estate broker. It gives the broker the authority to sell the property on certain conditions. The listing agreement generally expires after ninety day unless renewed by both parties. Because the listing agreement is the contract between the seller and the broker it is important to understand it. Review it carefully with the agent before signing.
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Do you have a question?
If you have questions about any aspect of this month’s featured article, you may submit them directly to the author for consideration. Click here to submit a question about the article “Questions and Answers about Real Estate“.
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