In the market for a new home? Perform due diligence with the home’s deed.

On Behalf of | Jan 23, 2017 | Residential Real Estate

Given the realities of limited supply and high demand that characterize the Bronx real estate market, it can be tempting to sign a real estate contract for that dream walkup or condo that may be snapped up in a matter of days. You may be drawn to the residence’s original wood floors, vaulted ceilings and refinished kitchen; however, rushing into a purchase may be a decision you could grow to regret years down the line. Beneath the property’s remodeled surface, nearly imperceptible flaws can be present in various forms.

Most people know that it’s wise to hire a professional to inspect a home for structural flaws or plumbing deficiencies before taking responsibility for a residence. In a similar way, it’s important to involve someone experienced in scrutinizing the home’s title to review the paperwork for issues before concluding the real estate transaction. As the costs associated with fixing faulty appliances should be addressed in the housing contract, so should errors with the home’s title. Should these problems fail to be dealt with before the closing, the responsibility of amending them will transfer to the new owner. In some cases, these defects can lead to property loss if they are not handled correctly.

These are the top issues with property titles that can be attended to if they are caught in time:

1. Incorrect public records

When real estate is sold, an agent is responsible for providing the original deed to the agency responsible for recording the transaction. Filing this paperwork is called “recording a deed.” Should errors enter the process, it is possible that the buyer will not be recognized as the owner of the property and will be unable to sell the home in the future as the former owner will continue to be acknowledged as the owner. This problem can be circumvented by hiring a professional to obtain a copy of the deed after it has been recorded.

2. Undisclosed liens

Financial advisers warn prospective buyers to proceed with caution when attempting to snap up distressed properties. While there are deals to be had when scouring short sale and foreclosed residences, the saving accrued in the purchase tend to dissipate with repairing physical aspects of the home or mending financial flaws associated with the title. Resolving issues associated with a lien can become costly and can be transferred to unknowing buyers. When homeowners take on too much debt, the amount that is owed can be attached to the property as a lien. This document entitles the creditor to sell the property to disburse the debt. Issues with liens can be rectified by ensuring the title is “clear,” without debt attached, previous to the home’s purchase.

While it is tempting to rush a real estate transaction to avoid missing out on a great deal, it’s better to take the long view when acquiring property. Prospective homebuyers should consider building time and money into their budget when assessing real estate. Using a professional to ensure that the documents associated with the property are aboveboard takes both time and money, but these expenditures may be considered investments in the property.

A clean title may not be as enticing as a gleaming kitchen; however, the financial benefits associated with purchasing a house without debt attached will persist long after that kitchen needs a remodel.