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Home Inspection Tips for Buyers

Most Buyers' worst nightmare is to purchase a home only to discover latent defects that cost so much to repair that they lose their investment. Colorado real estate transactions place a substantial burden on Buyers to perform their own due diligence to investigate the condition of the home. This means that it is incumbent upon Buyers to hire inspection professionals with the knowledge and experience to identify the major problems during the inspection process. In order to protect their future investment, here are some basic tips that every Buyer and Seller should know.


Seller's Disclosure
The Seller's property disclosure is the best source of information for a Buyer to understand the performance of a home. First, determine whether the Seller is the first person who has ever lived in the home. If the Seller purchased the home from someone else, ask the Seller whether they have a copy of the the property disclosure provided to them before they purchased the property. This can provide substantially more information regarding the history of a home. Next, Sections A and B of Colorado's standard property disclosure specifically request the Seller to identify both past and present conditions related to the structural integrity and the roof of the home. Many Buyers mistakenly overlook the fact that the disclosure encompasses previous problems that were identified and repaired by the Seller. Buyers should have a right to learn what problems were encountered and to investigate the adequacy of the repair. Buyers and their agents should ask the Seller whether they included past issues on the disclosure that were repaired and if so, inquire how the Seller resolved the problem. Finally, Buyers and their agents should provide their inspector with a copy of the Seller's disclosure before the inspection.


Hiring Inspectors
Buyers and their agents should do research to ensure that they hire the right inspection professionals for the home in question. Most quality home inspectors will be direct about exactly what services they can offer and more importantly, what areas are outside of their expertise. Especially when inspecting older homes, Buyers should inquire whether their general home inspector has the knowledge to perform all areas of the inspection including the exterior facade, windows, roofs, foundation, sewer and utilities and mechanical equipment. For example, homes with stucco or EIFS typically require inspectors with particular knowledge of these systems and the equipment to evaluate whether they are adequately performing. Another example would be a home with a complex foundation system or a home that had major structural repairs which would require evaluation by a structural engineer.


Ask Questions
Many Buyers fall in love with a home and ignore obvious warning signs of problems. Buyers can protect their investment by asking important questions about the history of the home. Most Buyers would not spend money on a used car without carefully reviewing the vehicle maintenance history and accident records. Buying a home is no different. Buyers should ask the Seller about the maintenance, repair and replacement history on the home. For example, has the roof been inspected, repaired or replaced? When was the mechanical equipment last serviced or replaced? Are there any existing warranties on the home that might transfer to the Buyer? When was the last time the house was painted or windows sealed? Has the Seller ever made any insurance claims? Keep in mind that the most homeowners that take pride in their property should readily be able to answer these questions. A Seller's inability to provide this information should be a red flag.

Disclaimer: This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal or accounting advice or other expert assistance is required, the services of a competent professional should be sought.

© Copyright, 2016, by Land Title Guarantee Company

Types of Ownership and Tenancy

How Should Buyers Take Title to Property?
All four versions of the Contract to Buy and Sell Real Estate allow for a choice in the way in which two or more Buyers can take title to the property purchased. The choice is either to take title as tenants in common or in joint tenancy.


Tenancy in Common
Under Colorado laws, unless the deed states otherwise, two or more people will be presumed to hold title as tenants in common with an equal undivided interest in the property. Each co-tenant has a non-exclusive right to possession of the property, bur an exclusive right to sell, mortgage, or otherwise deal with the property, without the consent of the other co-tenants. Co-tenants can hold title in different percentages, by stating this in the deed conveying title to the co-tenants, or in a deed between themselves.


On the death of a co-tenant, the co-tenant's interest passes to the heirs who will hold title in common with the other co-tenants. Probate must be opened and and a personal representative appointed to convey the interest of the deceased co-tenant.


If the co-tenants cannot agree on the sale or management of the property, a court action can be filed for a court order to partition (subdivide) the property and award the subdivided units to each of the co-tenants, usually based on the percentage each co-tenant owns. If the property cannot be subdivided, the court can order the sale of the property and the net proceeds divided between the co-tenants, based on the percentage each co-tenant owns. The court may make any order deemed necessary to completely adjudicate the dispute.


It is common for tenants in common to enter into an agreement regulating their rights and duties. A common example is a jointly owned vacation homes. The agreement may (1) grant a right of first refusal to the other co-tenants should one of the co-tenants wish to sell, (2) provide for the sale or lease of the property by all co-tenants, (3) set out the terms of periodic use by each of the co-tenants.


Joint Tenancy
Joint tenancy is also a from of co-tenancy, where two or more persons may own a property. The important difference is that a joint tenancy includes the right of survivorship. On the death of a joint tenant, the surviving joint tenant(s) will own 100% of the property, without the need for probate to appoint a personal representative, and a personal representative's deed to convey the interest of the deceased joint tenant. For example, if three persons own a property as joint tenants, then on the death of the first dying, the remaining two owners will continue as joint tenants.


The very strict requirements of C.R.S. 38-31-101 must be followed to create a joint tenancy. The abbreviation "JTWROS" and the phrases "as joint tenants with right of survivorship" or "in joint tenancy with right of survivorship" can be used.


There is not joint tenancy if this is not done. Probate must be opened to convey the interest of a deceased co-tenant. This is a very common error when the wrong choice of tenancy is made in the contract, or when the deed is signed without checking that the property is conveyed to the Buyers as joint tenants.


Co-tenants, at any time, can covert their tenancy to joint tenancy by deeding to themselves as joint tenants, provided that the correct terminology is used.


The interests held by joint-tenants, like co-tenants, is presumed to be equal, but the joint tenants can agree on unequal interests in the deed conveying the property to them.


On the death of a joint tenant, a certified copy of the death certificate, or verification of death, together with a supplementary affidavit, must be recorded to prove the death of the joint tenant and to show that the surviving joint tenant(s) are the owners of the property.


Disclaimer: This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal or accounting advice or other expert assistance is required, the services of a competent professional should be sought.

© Copyright, 2016, by Land Title Guarantee Company

Real Estate Agent Safety Tips

Tip 1- Always let someone know where you are going and when you will be back. Leave the name and phone number of the client you are meeting and schedule a time for your office to call you to check in.


Tip 2- When showing a home, always have your prospect walk in front of you. Don't lead them, but rather, direct from a position slightly behind them. You can gesture for them to go ahead of you and say, for example, "The master suite is int he back of the house."


Tip 3- Whenever possible, take your car to a showing. When you leaver your car, lock it. Also, park in front of the house and not in the driveway. This insures you don't get "blocked" in.


Tip 4- While every real estate agent should take a basic self-defense course, the primary goal in any threatening situation is to escape from the danger and call for help.


Tip 5- Create on office distress code, a secret word or phrase that is not commonly used but can be worked into any conversation for cases where you feel that you are in danger. Use this if the person you are with can overhear the conversation, but you don't want to alarm them. Example, "Hi, this is Jennifer. I'm with Mr. Henderson at the Elm Street listing. Could you email me the RED FILE?"


Tip 6- Part of being prepared to deal with a threatening situation is having "an out." Prepare a scenario in advance sot hat you can leave- or you can encourage someone who makes you uncomfortable to leave. Examples: Your cell phone went of and you have to call your office, you left something important in your car, or another agent with buyers is on the way.


Tip 7- Take two seconds when you arrive at your destination to check out potential dangers:

  • Is there any questionable activity in the area?
  • Are you parked in a well-lit, visible location?
  • Can you be blocked in the driveway by another vehicle?

Tip 8- If you encounter an individual while working late or alone in your office, indicate to that person that you are not alone. Say something like, "Let me check with my supervisor to see whether she's able to see you now."

Tip 9- When showing a vacant commercial site, be aware of the time of day you meet a client. Showing a property at dusk or after dark, with no electricity on in the space you are showing is not advisable.

Tip 10- Remind your clients that strangers will be walking through their home during showings or open houses. Tell them to hide any valuables in a safe place. For security's sake, remember to remove keys, credit cards, jewelry, crystal, furs and other valuables from the home or lock them away during showings. Also, remove prescription drugs.

Tip 11- Upon entering an open house property for the first time, check each room and determine at least two "escape" routes. Make sure the deadbolt locks are unlocked for easy access to the outside.

Tip 12- At an open house, be alert to visitors' comings and goings, especially near the end of showing hours. Police have reported groups of criminals that target open houses, showing up with multiple people near the end of the afternoon. While several "clients" distract the agent, others go through the house and steal anything they can quickly tak.

Information provided by NAR's REALTOR® Safety Resource Kit.

Disclaimer: This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal or accounting advice or other expert assistance is required, the services of a competent professional should be sought.

© Copyright, 2016, by Land Title Guarantee Company

Clearing Title Requirements Part 2

In Part 1 of our article, we discussed the procedures a title company follows for clearing voluntary liens. In Part 2, we will cover involuntary liens that affect real property and the suggested procedures for clearing these liens.


Judgment Lien

A judgment creditor may enforce a judgment obtained from a court by recording a transcript of the judgment with the clerk and recorder. Once the transcript of judgment is recorded, the judgment becomes a lien on the judgment debtor's property and will remain a lien until paid or out by time (usually six years from the date of entry of the judgment, or longer i the judgment lien is revived).


In order to clear the title, the title company will request a payoff from the judgment creditor or its attorney and will remit the payoff after closing.


Federal and State Tax Liens
Federal and State Tax Liens are statutory liens filed by the Internal Revenue Service or the State of Colorado for unpaid taxes. The recording of the tax lien attaches to any property owned or subsequently acquired by the taxpayer.


In order to clear the title, the title company will request a payoff from the IRS or the Colorado Department of Revenue and will remit the payment after closing. The IRS may take as long as six weeks to provide the payoff and will require its own authorization forms to be provided by the taxpayer, before it will issue the payoff.


Homeowner's Association Assessment Lien
Homeowners associations have a statutory lien for payment of assessments levied against the individual unit owners in any common interest community. Usually a statement of lien will be recorded to evidence of the amount owing under the lien if the owner has failed to pay the assessments when due. The title company will contact the association or the management company for a payoff and collect this amount at closing. A release of lien must be obtained from the association and recorded.


Mechanic's Lien
A mechanic's lien is a statutory lien given to persons or contractors for the purpose of securing the payment of work performed and materials furnished in the construction or repair of any improvements on land.


If the title commitment requires the release of the mechanic's lien, the title company will contact the lien claimant for the payoff amount for the lien, and will remit the payoff after closing. The lien claimant must provide a release of the lien for recording.


Lis Pendens
A Notice of Lis Pendens is recorded to give notice to all persons that a lawsuit is pending the outcome of which may affect the ownership of specified property. The title company should contact the attorneys involved for a release of the property from the lawsuit. This may be difficult to obtain in the circumstances of the litigation. If a release is provided, this should be issued by the court and then recorded.


Escrows for Liens
If the owner of the property disputes a lien, either that it is invalid or the amount owing is incorrect, the title company may agree to escrow funds sufficient to cover the anticipated cost of paying the lien, unless the dispute is settled. The owner will be required to sign an escrow agreement with indemnities to the title company. This procedure will require additional approvals from senior underwriting staff.

Disclaimer: This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal or accounting advice or other expert assistance is required, the services of a competent professional should be sought.

© Copyright, 2016, by Land Title Guarantee Company

Clearing Title Requirements Part 1

In this article, we will discuss the procedures a title company follows for clearing voluntary liens. In part two, we will discuss suggested methods for clearing involuntary liens.


Clearing Voluntary Liens
The title commitment is an agreement between the title company and the proposed insured to issue, subject to the requirements contained in the commitment, a title insurance policy.


Schedule B-1 of the commitment contains the requirements that must be satisfied prior to the issuance of the policy. These include the documents to create the estate to be insured as well as the documents necessary to clear existing liens from the property. These liens may be voluntary liens (liens intentionally created by the owner, e.g., a deed of trust or a mortgage) or involuntary liens (liens that attach to the property without the owner's consent, e.g., a judgment lien or tax lien).


Clearance of Deeds of Trust and Mortgages
A deed of trust is the recorded instrument that secures a loan made to the owner of the real property. there are three parties to a deed of trust: the Borrower (the owner of the property), the Trustee ( who is appointed to exercise the power of sale if there is a default), and the Lender (the beneficiary or secured party).


In Colorado, a deed of trust usually names the public trustee of the county in which the property is located as the trustee. The public trustee will conduct a foreclosure sale of the property in the event that there is a default of the loan by the borrower. In some cases, a private trustee is designated (usually in error). In this case, under our state law, the deed of trust is deemed to e a mortgage and a judicial foreclosure is required.


A mortgage is similar to a deed of trust, except that there are only two parties to the transaction, the borrower (owner of the property) and the lender. There is no trustee at all. If there is a default on the loan and the lender decides to foreclose on the property, a judicial foreclose is required.


When Schedule B-1 of the commitment calls for the release of a deed of trust or mortgage, the closer will contact the lender in writing for the payoff amount. In order to obtain this payoff, the closer will need the borrower's full name(s), loan number, and at lest the last four digits of the borrower's social security number. The closing department at the title company will initiate the release by calling the lender; since some lenders charge for payoff information updates, payoffs are usually ordered about two weeks prior to the closing.


After the closing and the payoff has been made, the lender is required under our state law to execute a release of the deed of trust. this release will be sent to the public trustee together with the original promissory note (marked paid in full and canceled). and the deed of trust or a certified copy of the deed of trust. The public trustee will execute the release and record it with the clerk and recorder. Some institutional type lenders may qualify to file a release of a deed of trust without producing the original note. In such cases, a specific form of release is executed and filed with the public trustee. The release of a mortgage is executed by the lender upon payment of the loan.


Financing Statements
A financing statement is filed to perfect a lender's security on personal property. It is filed with the secretary of state where the borrower has it place of business. When the collateral is fixtures, crops, oil, gas, or minerals, the document is filed with the clerk and recorder.


A Termination of Financing Statement is used to release the financing statement form the property and is usually provided by the lender upon payoff.


Disclaimer: This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal or accounting advice or other expert assistance is required, the services of a competent professional should be sought.

© Copyright, 2016, by Land Title Guarantee Company
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