Archive for the ‘Home Ownership’ Category
Monday, June 21st, 2010
During times of recession and economic downturn many homeowners find themselves in the position of having to decide what to do with real estate that they can no longer afford. According to data gathered by the California Department of Real Estate, in 2009, nearly three-quarters of all sellers in California sold their homes as a result of financial difficulties. And according to the National Association of Realtors, the number of short sales has increased nationwide. Whether it is an investment property, a vacation property, or the family home, understanding your available options and their outcomes is important if you need to decide what to do with real estate for which you worked so hard, but can no longer afford.
What is a Short Sale?
A “short sale” in real estate refers to a sale of real estate that falls short of the loan balance owed on the mortgage. When a property is sold in this manner, the lender allows the property to be sold for an amount less that what is owed to them. Under a short sale the lender may agree to “write-off” the difference between what remained on the loan balance and what the property actually sold for. It does not necessarily guarantee that the difference will be forgiven by the lender; instead, this is something that has to be negotiated with the lender.
What is a Foreclosure?
A “foreclosure” is a proceeding that allows a lender to end all ownership rights when the owner of a property stops making mortgage payments and is in default. Basically it allows the lender to reacquire the property. While each state is different, in California the lender generally has a right to pursue a property owner for the deficiency owing after the foreclosure has taken place. This means that if your property is not sold, or the purchase price was not enough to cover the balance on the loan, the lender can turn the loan over to debt collectors, or sue you for the balance still owing, and/or pursue payment from you even if you file for bankruptcy.
However, there is an important exception to this rule: the lender has no right to collect a deficiency from you if the loan was used for the original purchase of your primary residence, and you still live there. If you refinanced your home, or if the loan was for a second home, commercial property, or investment property, this exception does not apply.
Why a Short Sale May Be a Better Option for a Distressed Homeowner
There are a number of reasons that a short sale may be in the best interest of a seller who needs to let go of a property. One important advantage to a short sale pertains to future home purchases. For example, Fannie-Mae, the Federal National Mortgage Association, adjusted their guidelines in 2008 to allow an individual that successfully completes a short sale to be eligible for a Fannie-Mae baked mortgage package after only two years. In contrast, an individual who loses their home to a foreclosure will not be eligible for a Fannie Mae backed mortgage for five years.
Another advantage to a short sale would be in the area of credit score issues. The impact of a foreclosure can be a downgrade of your credit score anywhere from 200 to over 300 points, and it will affect your score for a minimum of three years. However, the impact of a short sale on your credit score can be as little as 50 points and its effect can be as brief as 12-18 months.
How to Start a Short Sale
If you think you might be interested in short-selling your home or other real estate, it is best to talk to a legal expert about the process and related legal issues, such as potential tax consequences to you when part of your mortgage loan is forgiven. The skilled real estate attorneys at San Diego Law Firm have specialized experience in handling short sales as well as a unique knowledge of the real estate market. To schedule a consultation, please call San Diego Law Firm at 619-794-0243.
Posted in Home Ownership, Real Estate, Selling a Home, Selling a Property
Friday, April 23rd, 2010
If you’re a real estate investor here in San Diego, how much do you know about Limited Liability Companies and corporations? For those who own or will be buying investment properties (e.g. residential or commercial rental properties), you may want to create a California Liability Company (LLC) or corporation. These business structures can be used to hold ownership of your real estate, instead of having title to the property in your own name.
What happens if you keep property titled under your personal name?
If you’re sued and lose the case, then your personal bank accounts and other assets can be used to pay off a judgment. But if you create an LLC or corporation, then typically only the property in the name of the company will be subject to these debts. (more…)
Posted in Business Disputes & Lawsuits, Business Real Estate, Home Ownership, Real Estate
Tuesday, February 9th, 2010
You may remember hearing stories about the old days in the Wild West when people could take control of someone else’s empty land and have it become theirs. In modern times, possession can still lead to ownership, which means that even the most expensive of San Diego real estate can still fall into the hands of another, and all without paying a penny to the owner on title. The beginnings of adverse possession actually started long before the American Old West even existed, and traces back to old English law during feudal times, when starving peasants cultivated and lived on portions of property that wealthy landowners had left unexploited. In part, adverse possession law survives throughout the country (including California) because of its underlying principle that land should be put to use, and if its owner seems to have abandoned the property, then someone else should develop it. (more…)
Posted in Boundaries, Home Ownership, Real Estate
Thursday, January 7th, 2010
The government doesn’t always need a for-sale sign to be posted in front of your San Diego property. Not only that, you may have to give up your property despite the fact that you’ve outright rejected the government’s unsolicited offers to buy your home or other property. Why? Because our property rights are limited by the federal, state, and local government’s sovereign right to take property through “eminent domain” (also known as condemnation). The power of eminent domain comes from the government’s right under the 5th Amendment to the U.S. Constitution and under our California Constitution to take private property for a “public use” in exchange for “just compensation,” e.g. the fair market value of the property. Both willing and unwilling sellers who find themselves in this situation have to act quickly to challenge the government’s actions or unfair offers of compensation. This often starts by recognizing that there are limits to the government’s right to condemn property through eminent domain, and you have your own property rights that you must be ready to immediately act upon. (more…)
Posted in Business Real Estate, Current Events, Home Ownership, Real Estate
Wednesday, December 9th, 2009
“Let the buyer beware” – before California and other states set up certain homebuyer protections, these words haunted many purchasers who discovered major defects with their home after moving in, and were left without recourse against the seller. Under the harsh legal principle of buyer beware, a seller has no legal obligation to disclose defects to the buyer. That’s not to say that sellers are protected when they actively cover up hidden defects or make false representations, but if, for example, the seller simply failed to mention that the home is prone to flooding or landslides, then the burden is on the buyer to discover defects. While this is still the law in some jurisdictions, California and many others have abandoned this principle and now impose legal obligations on the seller in order to protect homebuyers. (more…)
Posted in Business Real Estate, Buying a Home, Buying a Property, Home Ownership, Real Estate, Selling a Property
Wednesday, November 18th, 2009
After meeting in the same location for more than two decades, a local San Diego County church was told by the county that its members could no longer meet in its usual church building, reports Anne Krueger of the San Diego Union Tribune. It’s also reported by a San Diego Union Tribune AP article that several hundred miles north of San Diego, nine Fresno area medical marijuana dispensaries have been ordered to shut down. Elsewhere, in the affluent coastal city of Palos Verdes Estates in Los Angeles County, a homeowner currently faces misdemeanor charges for allegedly running her home as a “party palace,” as detailed by Jeff Gottlieb in the Los Angeles Times. What do these stories have in common? Accusations of zoning violations. (more…)
Posted in Boundaries, Business Real Estate, Home Ownership, Real Estate, Zoning
Wednesday, October 7th, 2009
As a homeowner, you have many property rights, including the right to enjoy your home. Not everything your neighbor does that you don’t like can legally be considered a nuisance, but when your neighbor’s activities or the conditions on their property significantly and unreasonably interfere with your own right to use and enjoy your land, there’s a “private nuisance.” A nuisance occurs even though your neighbor hasn’t stepped foot on your property. If there has been a physical entry by someone or something onto your land, then there may be a trespass. When actions interfere with the health, safety or property rights of the community, then there may be a “public nuisance.” Common examples of nuisances caused by neighbors or nearby businesses can range from excessive noise, offensive odors, air and water pollution, or excessive lighting that seems to replicate that daytime feel in the middle of the night. (more…)
Posted in Boundaries, Home Ownership
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