7 Habits of Highly Effective Home Buyers

Home buyers: would you like to be guaranteed an effective purchase?

 That is, one that sets you up in the optimum position for the next phase of your life, bearing in mind factors of the budget, location, lifestyle and opportunities in the market?

 A great investment?

 Moving one step closer to your dream home?

 What home buyer wouldn’t want these?

 So how do we get there? 

“Sow a thought, reap an action; sow an action, reap a habit; sow a habit, reap a character; sow a character, reap a destiny.”

― Stephen R. Covey, The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change

Walk into any popular bookstore and you will find, generally between “biographies” and “religious” or “esoteric”, a section labeled “self-help”.

 And while some of the material can be gimmicky or weak, every so often a book comes in that makes you take stand up and take notice.

 “The Seven Habits of Highly Effective People” by Stephen R. Covey is such a book.

 25 million copies sold… 40 languages… 1,500,000 sales of the audiobook alone…

 Do I need to say more?

 Chances are good that you’ve probably heard of it!

 In this seminal work, Mr. Covey sums up over 25 years of experience in business, family, and educational spheres and conveys to the reader those seven practices common to the most successful individuals in their fields.

 In fact, Mr. Covey virtually guarantees effectiveness, which he defines in terms of the production of maximum long-term beneficial results, through working on these good habits.

 Based on Stephen Covey’s seven points, I suggest the following habits to any prospective home buyer, which will give you the edge on the competition and set you up for a successful home purchase!

 Spoiler alert:

 If you still have a copy of the book on your shelf and you haven’t got to reading it yet, I’m about to give you my personal take on the titular seven habits.

 So if you don’t want me to let the cat out of the bag, you might want to take in all 432 pages before you jump in here!

 Or not, it’s up to you!

 By following these home buying tips, however, you will increase your odds of success far beyond the average home buyer.

 Habit #1 – Be Proactive: Get pre-approved For Your Bank Loan

Mr. Covey’s first point deals with getting into the ongoing practice of being on the front foot, rather than living in a passive and reactive mode; not waiting for it all to happen for you but taking the first step.

 If you are looking to buy, the foremost proactive task is to get pre-approval for your mortgage. Approach your bank and find out what is the amount and terms for which you can be approved, based on your current income (and expenses).

 This is going to put you in the driver’s seat for the whole process – you will have a good idea of what you can afford, which in turn informs all your house-hunting and decision-making from here on out. Make sure you understand the difference between getting pre-approved and pre-qualified. Being pre-approved vs pre-qualified for a mortgage is not the same. Home sellers will want pre-approval! This will be the first meaningful task in preparing to buy a home.

 If you’ve been dreaming about that ideal living space, in being proactive you will have begun your journey toward it!

 “If I really want to improve my situation, I can work on the one thing over which I have control – myself.”

― Stephen R. Covey, The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change

 Habit #2 – Begin With The End In Mind: Determine what you want and what you need

Want vs Need When Buying a Home

Next, readers of the book are encouraged to envision a clear destination.

 Our imagination is a powerful thing, and it’s useful for more than just coming up with ways to spend this week’s Powerball, or making up pranks targeted at friends, colleagues, and loved ones. We can use it to develop a vision of our future for us to work towards.

 When it comes to buying a house, you can begin to envision what you want.

 Which area would you like to live in? What house style interests you? Garden or no garden?

 Moreover, ask yourself what you need: how many bedrooms do you require for your current and future family size? Do you need space for the number of vehicles you own? Space for all your appliances? Maybe there are some specific desires surrounding the type of neighborhood you want? 

Build a picture of the desired end towards which you can begin to move.

 “Start with the end in mind.”

― Stephen R. Covey, The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change

 Habit #3 – Put First Things First: Take a reality check

Now that you have identified what your end goal is, and also what your budget will allow, you can begin to put first things first.

 For house hunting, this entails getting a realistic idea of what’s out there and available.

 Using technology this can be done from the comfort of your own home.

 Jump online and you can quickly get an idea of how the market is looking. Some sites even offer virtual guided tours of potential homes.

 At this stage, you could even begin to drive through your desired neighborhood on a Sunday open house and begin to see for yourself what’s on the market.

 Nothing beats first-hand experience to get a feel for what is realistic!

 Using these methods you will build a solid profile of what your ideal spot could look like.

 Some buyers become disappointed or frustrated by leaving out this step, having a mentality which says “I want it all right now”, setting the bar for their purchase way too high.

 They want their perfect dream home for a low, low price.

 Indeed, the overarching theme of Mr. Covey’s book is how we set ourselves up for failure to reach the desired result not primarily because of external forces, but because of our own perceptions.

 Taking a reality check at this stage will equip you to engage with the market. 

“To change ourselves effectively, we first had to change our perceptions.”

― Stephen R. Covey, The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change

 Habit #4 – Think Win-Win: Aim high but be flexible

Most buyers have an idea in their head of “The One Home.”

This “One Home” is the home I’m supposed to encounter that will make me deliriously happy by checking all my requirements and coming in way under my budget.

 “It’s out there for me and I just have to find it.”

 Your reality check in the previous point will probably already have shown you that “The One Home” is a unicorn.

 There’s no such thing!

However, this point right here will help you to see that even if the “One Home” does not exist, it is still possible to be effective in reaching the desired result: a home that will give you the optimum long-term benefit and satisfaction for your investment.

Thinking “Win-Win” is about finding solutions that work for all parties involved – for example, you can get a great house at the right price without fleecing the seller.

 To find your “Win-Win” property, as opposed to the unicorn, will require flexibility and negotiation. You may have to compromise on some of your nice-to-haves on the property in order to secure the best possible arrangement.

 “Win-Win” thinking says, for example: “Ok, I wanted a house that was ready to move into right away, but here is a decent house in a good area which can be turned into a great house with some renovation, and I’ll still come in under budget.”

 Or, “Look, I’m spending a fraction more than I had originally planned, but this house checks all the boxes and will give us space into which we can grow.”

 Be flexible and find your Win-Win!

 “Happiness, like unhappiness, is a proactive choice.”

― Stephen R. Covey, The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change

 Habit #5 – Seek First To Understand, Then To Be Understood: Understand the process of buying and selling

Understand How The Home Buying Process Works. What a great fifth habit to have under your belt: Understand, before being understood.

 What makes Mr. Covey’s philosophies so good is that they deal with improving one’s character, not just quick fixes that only scratch the surface of the issue!

 When it comes to buying a house, what you need to understand is the process of buying and selling.

 You don’t have to have a degree, or train to be a real estate agent yourself, but it will help to find all the vital information.

 Don’t be scared to ask questions! Understanding what to do before buying a home is vital!

 After all, buying a home is one of the biggest investments a person can make!

 If you have a question about anything from paperwork to repayments to closing dates to mortgages, just ask!

 A good person to ask is your local real estate agents – if they aren’t equipped to answer your question directly, they can put you in touch with the necessary professionals!

 According to Mr Covey, when we try to offer advice, or assert our own desires, or bring a solution, without first understanding the problem, we set ourselves up to be ineffective.

 “Most people do not listen with the intent to understand; they listen with the intent to reply.”

― Stephen R. Covey, The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change

 Habit #6 – Synergize: Empower yourself with the right real estate team

There are those who have more experience than us in any given area.

Rather than re-invent the wheel for ourselves, we can benefit from the learning and experience of others.

 We already saw in the last point some of the advantages of being able to ask a good real estate agent for answers to some of the fundamental questions.

 Sure, you could do it yourself!

 You might conceivably even save some money by doing it yourself!

 However, by and large, when you weigh the benefit in terms of your investment of time, and the avoidance of unexpected hassles, generally speaking, making use of these specialists in their fields can pay for itself, so to speak, by saving you time as well as headaches.

 Your small team could involve a competent real estate agent, a qualified conveyancing attorney, a reputable mortgage broker and the best home inspector available.

 You could also involve a trusted friend or family member who can look at the prospective property with you and point out pro’s and con’s you may have missed.

 In addition, give weight to what your spouse or immediate family has to say – after all, they will be living there too! 

“When the trust account is high, communication is easy, instant, and effective.”

― Stephen R. Covey, The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change

 Habit #7 – Sharpen The Saw: Enjoy learning from the entire experience

Enjoy The Home Buying Experience. Every first-time buyer can relate to the rush of making their first purchase.

 When the offer is accepted, a celebratory notification is sent to family and friends, loaded with party emoticons.

 When the mortgage is approved, we crack open the champagne!

 Going through the process can involve ups and downs, but when you reach your goal it is worth it.

 Buying shouldn’t be something to endure but something to enjoy.

 And, even when there are those disappointments that might come along the way, you are learning and growing from the entire experience.

 You come out on the other side of the process with broader shoulders and more life experience. When things are thought through carefully there is  rarely any home buying disappointment.

 So, if you’re ready, jump in!

 Be proactive, have the end in mind, stay grounded in reality, think “Win-Win”, increase your understanding, work in team, and be learning and growing.

 You will be an effective home buyer!

 And of course, be sure to stock up on a bottle of your favorite Champagne!

 This post is taken from the Maximum Exposure Real Estate blog and can be read on-line here..

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

@vestedland

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House flipping - 5 crucial questions to be asked

5 Crucial Questions to Ask Before You Flip Your First House

 By Daniel Bortz

Oct 30, 2019 (An oldie but a goodie)

 

Thanks to the seemingly endless glut of home improvement TV shows like “Flip or Flop,” “Masters of Flip,” and “Rehab Addict,” it seems like flipping houses has become America’s favorite pastime.

 But for the inexperienced, house flipping can be a dangerous and costly game. Make one wrong move, and that “great investment” can turn into a monumental mistake.

 Don’t want your first flip to be a flop? Here are five questions you might never think to ask yourself, but totally should, before you begin flipping houses.

 

1. Do I have a great house flipping team?

Buying and flipping a house isn’t a one-person job; it’s a team sport, and you need to surround yourself with the right players. This starts with having a savvy real estate agent who can help you not only find a great investment opportunity but also negotiate a great deal on the property. Buy low, and things are already looking up!

 You also need home improvement professionals who can guide you through the remodeling process and help you set a budget, determine what renovations to make (some yield a better return on investment than others), and solve any issues that crop up during construction.

 Typically, you want to hire a general contractor, a person who’s responsible for providing all of the laborers, building materials, and equipment necessary for the entire project.

 2. How long will it take to flip this house?

Ideally, you want to buy a house that can be renovated within four to six weeks, says Bobby Curtis, a real estate broker at Living Room Realty in Portland, OR.

 A short turnaround time will help you keep costs like interest and taxes to a minimum.

 On average, homes take about 180 days to flip, according to ATTOM Data Solutions, curator of a nationwide property database. But flipping a house can take a lot longer. After all, there’s no telling what you’ll find when you start tearing down walls.

 Mold could be lurking behind drywall in a basement, or there could be electrical issues beneath the surface, warns J.B. Sassano, president of Mr. Handyman, a national home improvement company based in Ann Arbor, MI.

 Also, depending on the housing market, it may take you a while to find a buyer once the home is fixed up.

 The moral of the story: Patience is more than just a virtue for house flippers—it’s a requirement.

 3. Am I putting too much at risk?

Although there are a number of loan options for house flipping, many first-time house flippers stretch themselves too thin when it comes to how much of their money they invest in a project. Some even put their entire retirement savings or child’s college fund on the line. Not a great idea!

 It’s important to truly assess your risk tolerance. Depending on where you are financially, you may or may not be a good candidate for flipping houses right now.

 4. Can I think like an investor instead of a homeowner?

When flipping houses, you have to keep future home buyers in mind. While it may be tempting, the last thing you want to do is make home improvements and design decisions that reflect your personal tastes instead of what most home buyers want.

 Be prepared to choose home features and housing materials that are classic and offer wide appeal. If you can’t commit to doing that, flipping houses isn’t the right endeavor for you.

 5. Do I understand my loan options?

Unless you have a ton of cash readily available, you’ll need to borrow money to buy and renovate a distressed property. But obtaining a loan for a house flip isn’t like getting a conventional loan for a home you intend to actually live in.

 Most house flippers use a “fix-and-flip loan” that’s specifically designed for purchasing and remodeling homes. There are five types of fix-and-flip loans, and each comes with its own set of qualification requirements and pros and cons.

 Hard-money loan: Sometimes called “rehab loans,” these are short-term loans intended for real estate investments. These loans are usually much shorter than traditional mortgages. Six months to one year is most common, but hard-money loans can go up to five years. Moreover, interest rates are considerably higher, typically ranging from 12% to 21%, and most hard-money lenders also charge 3 to 6 points upfront, where 1 point equals 1% of the loan.

 There’s also a limit on how much you can borrow. Typically, hard-money loan lenders allow you to borrow about 60% to 75% of the property value you intend to purchase. So, if you’re looking at a $200,000 property, for example, the most you’ll probably be allowed to borrow would be $150,000, meaning you’d have to pay $50,000 upfront.

 Cash-out refinance: If the value of your primary residence has increased, one financing option for your flip is a cash-out refinance. This lets you tap the equity in your home by refinancing your mortgage for more than you currently owe and taking the difference in cash. Your new loan will be the amount you still owe on your mortgage, plus the cash you wanted to take out.

 So, say you had a $300,000 loan, on which you still owed $200,000. That would mean you had $100,000 in equity in your house. You could cash out $25,000 of that equity, and get a new mortgage for $225,000, to replace your existing $200,000 loan—and then put that $25,000 toward your house flip.

 The drawbacks? You’ll have to pay closing costs—which average about 3% to 6% of the total loan—and if you’re refinancing to a higher mortgage rate, you could wind up paying more money in interest on your loan over the long run.

 Home equity loan or line of credit: Both a home equity loan or home equity line of credit are financing options that let you borrow money using the equity in your home as collateral.

 The big difference: a home equity loan provides you with the cash upfront, and you pay monthly installments over the length of the loan (like you do on your first mortgage). With a HELOC, you access the money in small chunks over the life of the loan.

 Investment line of credit: Also called an “acquisition line of credit,” an investment line of credit is similar to an HELOC—except it’s issued solely for buying investment properties.

 This short-term financing option—with loans generally lasting from about 18 to 24 months—lets you borrow cash as needed, up to a predetermined loan limit. These loans are best suited for people who have experience flipping houses, since borrowers are underwritten and approved based on their demonstrated record of owning or flipping investment properties, and their financial wherewithal.

 Crowdfunding: When using crowdfunding, or “peer-to-peer lending,” the funds are raised through the contributions of a large number of people, usually through the internet.

 For instance, RealtyShares, a San Francisco–based company that finances investment properties in 35 states, gives house flippers access to more than 38,000 high net worth individuals who invest in a specific transaction for as little as $5,000. RealtyShares funds up to 70% of the estimated after-repair value of a property in as little as 10 days. Interest rates vary from 8% to 11%, with the average loan term on luxury flips being 12 months.

 

first time flippers fixer-upperhome remodeling house flipping

Daniel Bortz has written for the New York Times, Washington Post, Money magazine, Consumer Reports, Entrepreneur magazine, and more. He is also a Realtor in Virginia.

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Dr. Title

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

Follow us on Twitter @vestedland

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Some FAQs about RESPA - the Real Estate Settlement Procedures Act

The Consumer Financial Protection Board has issued Real Estate Settlement Procedures Act FAQs. 

As a borrower, you are entitled to know that some title insurance agents are involved in kickback schemes which are illegal, an marketing programs which are legal (provided the RESPA guidelines are adhered to!)

The FAQs begin with a discussion of RESPA Section 8 General 

QUESTION 1: What are the provisions of RESPA Section 8? 

ANSWER (UPDATED 10/7/2020): RESPA Section 8 prohibits certain actions related to federally related mortgage loans. RESPA Section 8(a) prohibits kickbacks for business referrals related to or part of settlement services involving federally related mortgage loans. 12 USC § 2607(a); 12 CFR § 1024.14(b). RESPA Section 8(b) prohibits unearned fee arrangements, i.e., splitting charges made or received for settlement services, except for services actually performed, in connection with federally related mortgage loan transactions. 12 USC § 2607(b); 12 CFR § 1024.14(c). RESPA Section 8(c) identifies certain payments that are not prohibited by Section 8. 12 USC § 2607(c); 12 CFR § 1024.14(g).

Appendix B to Regulation X provides examples to illustrate the application of RESPA to particular fact patterns, including fact patterns under Section 8(a), 8(b), and 8(c) indicating whether or not a violation occurred. Appendix B to 12 CFR part 1024. RESPA Section 8(d) details specific penalties for violations of Section 8, including for Sections 8(a) and 8(b). 12 USC § 2607(d).

Got a question about RESPA, read the full FAQs here.

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Dr. Title

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

Twitter - @vestedland

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Wire fraud on rise - it's the scam that keeps on taking

In real estate, as in war, forewarned is forearmed.  It’s especially true today because of the use of wire transfers between parties, banks and title insurance agents and companies, to deliver funds for contract deposits, mortgage payoffs and buyer’s funds.

We are writing about the weapon used by scammers – the falsification of wire instructions.  

 A recent article from National Mortgage Professional magazine written by Lew Sichelman dives into the scam.

 Here’s the text of the article which can be found on line at nationalmortgageprofessional.com/news/scam-keeps-taking

 The Scam That Keeps On Taking

 Cyber thieves are relentlessly targeting buyers in the middle of their title insurance and escrow process.

 Fraud schemes come and go. Romance scams are hot right now. So beware of a new “love interest” who could trick you into falling for them when all they really want is your money.

 But one ruse that has been particularly persistent is the wire transfer dodge in which cyber-criminals impersonate title firms in trying to steal mortgage payoffs. So much so that the Secret Service recently issued an advisory warning on a “drastic increase” in the scam. “We have seen a sharp increase in real estate wire fraud in recent months,” says Stephen Dougherty of the agency’s Cyber Investigation Division.

 I first wrote about wire fraud about a half-dozen years ago in my nationally syndicated newspaper column when I heard the general counsel of the National Association of Realtors warn an audience to be alert to what was happening. Six years or so later and the subterfuge is still popular with the thieves who perpetrate it.

 It’s easy to see why. Wire fraud is far more lucrative than robbing a bank. Whereas bank robbers get away with just $1,400 on average per heist, according to Bruce Phillips, senior vice president and information security officer at WFG National Title insurance in Portland, Oregon, the average lost to swindlers in a wire heist is $140,000-$160,000. One poor soul lost $1.2 million, never to be seen again.

Taken To Task

Sometimes marks get lucky. Listen to the tale of Aaron Cole, a vice president of a gear and machine company in Oregon City, Ore., who lost all his money – $123,000 to be exact – when he complied with phony wiring instructions. The e-mail certainly looked legit. It wasn’t, though, and in the click of a mouse, his money was gone. The criminals quickly whisked the dough to various accounts in the United States and overseas.

 Cole had sold his old home and was ready to move with his wife and two children into a new place. But that happy occasion turned into a nightmare when he had to tell his wife their closing money had vanished. “I never felt like that before in my life, and I hope I never feel like that again,” he told my associate, Mark Fogarty.

 “The scammer got between my correspondence with the title company and me,” he said. “To my untrained eye, [it] looked to be from the same people I’d been working with all along.”

 By the time the legit title company called a week later with the actual wiring instructions, he recalled, “I knew my money was gone and there was  .very little chance of ever recovering any of it.”

 Luckily, WFG, his title company, [Vested Land Services is a WFG agent, ed.] made Cole whole, allowing him to close on his home and move in just in time for Christmas. In return, he became something of a spokesman for the company, telling his story to media outlets to warn consumers about the dangers of real estate “phishing” scams.

 Taylored Appeal

 More recently, the American Land Title Association told the story of a chap named Taylor – his last name was omitted to protect his privacy – a move-up buyer outside of Denver who received an email appearing to come from the title company and asking him to wire his closing funds early in the transaction.

 “The emails appeared convincing and included my exact amount for closing that had previously been discussed by the title company,” Taylor told ALTA. “I received the wiring instructions and wired just under $80,000 as instructed. Two days later, I was notified that the money did not arrive at the title company and that’s when I realized my life savings had been stolen.”

 Fortunately for Taylor, his title company, Title Forward, advised him how to notify the financial institutions involved of the crime. But after two days, the banks provided no assurance his funds were secure, so the company called in Thomas Cronkright, a funds recovery expert who himself was a wire fraud victim.

 Cronkright, who runs a company called CertifID, gathered the emails and bank information and deployed CertifID’s Funds Recovery Services to launch a coordinated effort that involved the Secret Service to recover the funds. Within a few hours, Taylor’s money had been secured. And within a week of complying with the criminal’s wire request, his life savings was back in his bank account.

 FBI Interest

 Of course, very few victims are as fortunate as Taylor or Aaron Cole. Nevertheless, Taylor said he found the entire experience “shocking,” adding that “if I can be tricked, anyone can.” Turns out, many people are. According to the FBI’s latest Internet Crime Report, wire fraud -- technically referred to as Business Email Compromise – has cost companies and home buyers more than $3.5 billion in recent years.

 You rarely hear of these victims’ stories, largely because they are too embarrassed to come forward. But the scheme accounts for nearly half of all cyber crime losses. It starts with a “phishing” expedition in which fraudsters search the Internet for folks involved in a real estate transaction. And with more than five million sales a year, there are plenty of those.

 Once the bad guys latch on to e-mails between buyers and their agents and lenders, they gain transaction details, including the amounts buyers are required to transfer for their pending closings. Armed with that information, they send fake wiring instructions under the guise of the title company or other professionals involved in the transaction.

 The instructions often tell buyers to send the money immediately – sometimes as digital currency – or the transaction will be delayed or canceled altogether. And if an unsuspecting buyer complies, his money is gone in a flash.

 LO Alert

 Consequently, it’s incumbent upon real estate agents and loan officers to alert their clients that it’s entirely possible they will receive such a request and what to do about it. Reminding them frequently of the possibility so often won’t hurt, either. Warn them that if they receive any e-mails from anyone claiming to be a part of the transaction, they should call you to verify that fact before doing anything else.

 Cronkright, the recovery expert, also advises lenders and title agents to communicate clearly with clients about how and when the buyer will be called upon to transfer closing proceeds. Tell them, too, that the wiring instructions will never change.

 When the final instructions are sent, do so prior to sharing the final settlement statement. Don’t send the instructions by regular e-mail. Rather, send them in a secure, encrypted message. Make sure you obtain written proof from the buyer that he received your instructions.

 Meanwhile, ALTA, the title business trade group, offers a number of resources to help protect against wire fraud and raise awareness about the threat, including a wire preparation checklist that can be used as a best practice for verifying outgoing wire information and a rapid response plan that can help aid in the recovery of funds. The organization also has produced a rack card explaining wire fraud and the steps consumers should take to avoid becoming a victim.

 Meanwhile, all you lonely guys and gals out there, your antenna should wiggle when someone of the opposite sex comes on to you. Be particularly wary of a tragic story or an emergency that pops up after you’ve known that person for only a short period. That’s how romance scams begin.

 This article was originally published in the NMP Magazine August 2021 issue.

Lew Sichelman has been covering the housing and mortgage sectors for 52 years. His syndicated column appears in major newspapers throughout the country. He also has been the real estate editor at two major Washington, D.C., dailies and spent 30 years on the staff of National Mortgage News, formerly National Thrift News.

Keywords: cyber crime cybercrime wire fraud

 We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Dr. Title -

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

@vestedland

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Can home title thieves can't steal your house?

Rick Kahler: Can home title thieves can't steal your house? No, they can't.

[Editor’s comments in brackets]

 Home title theft.

This is a “threat” I only learned about from frantic radio commercials warning that your home can be stolen from you. They claim thieves can deed your property to themselves and then mortgage or even sell it without your knowledge. In fact, they may have done so already! You may have lost all your home equity! You’ll discover the fraud when you are evicted by a foreclosure or new owner!

 Of course, after all these alarms, the ads offer a solution: buy their title theft insurance. They promise to shield your title, monitor it 24/7 and alert you when a fraudulent title transfer is filed. One company charges $79 a year for $1,000,000 of title theft insurance. It’s highly unlikely any such company will ever pay out a dime of insurance.  [One never knows, does one? With identity theft rising, need we say more?]

 The claims are so over the top that these companies either don’t understand the law or are intentionally

bending the facts. Like most things, these outlandish claims include a grain of truth. It is true that anyone can forge your name to any document, including a deed supposedly transferring title to the forger. Such a deed could be filed with the county register of deeds.

 That doesn’t mean someone has stolen your title.

 First, a forged deed is not valid and conveys nothing. Only you can legally transfer your title to a third party. If a buyer or a lender rely on a forged deed and don’t do their due diligence on a property’s title, they are out of luck. They, not the legitimate property owner, will ultimately lose any money paid to the thief. [This is why title insurance is important.]

 Second, a would-be forger could easily get a blank deed form online and fill in your property’s legal description obtained from public records. However, the signature must be certified by a notary public, who is required by law to verify your identity.

 Third, it is next to impossible for the thief to mortgage or sell the property to a knowledgeable lender or buyer. Lenders, title companies and real estate firms have so many safeguards in place that there is almost no chance a fraudulent transfer won’t be discovered. The required credit reports, employment and income verifications, back tax returns, appraisals and title insurance are bound to alert you and the lender that something is wrong.

 Even with a cash buyer, a thief’s chances of success are small. Only the most naïve buyer will fail to obtain title insurance. Title insurance protects buyers against defects in the title, including liens, fraud and forgery. It will alert the buyer or lender to any defects prior to closing. If a title company misses a defect, it must pay for any damages. No legitimate attorney or real estate firm will allow you to buy a property without this insurance.

 Fourth, if a buyer is naïve enough to buy property without a legitimate appraisal or title insurance, it is possible they could be conned. If they show up in your driveway with a moving van, however, they — not you — are the ones at risk of losing their money.

 Fifth, forgery is a felony in all 50 states, punishable by jail time and heavy fines. The court might also require restitution for damages caused by the forgery, such as the costs of clearing the title.

 In the extremely unlikely event that someone goes to the trouble and risk of committing all these crimes, the cost of clearing the title is the biggest risk to a homeowner. That will require the assistance of an attorney. Would that potential expense make it worthwhile to consider buying title theft insurance? Perhaps, assuming the policy covered such expenses. Unfortunately, none do.

 Rick Kahler is president and owner of Kahler Financial of Rapid City.

 [Most cases of stolen title are from decedent’s estates, especially in rundown neighborhoods.  Spying an empty house, maybe the owner is written up in an obituary, or the thief just finds out about it, it’s a prime subject for title theft. Agreed that a savvy buyer will most likely not get trapped, lenders are sometimes not so savvy.]

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Dr. Title - Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

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