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What You Need to Know when Buying or Selling Real Estate as a Married Couple

Posted On: July 31, 2014

Buying and selling real estate is one of the most common things people do as married couples. Families change over the years and as they expand and contract, couples move from one house to the next. They might buy or sell property together as a financial investment or even purchase a second home with plans for the future. In order for buying and selling real estate to go smoothly for married couples, there are a few things they should know:

Financial Pre-Approval is Important
If you are buying real estate, receiving pre-approval for a mortgage is essential. Even if the exact amount you end up borrowing is different than your pre-approval amount, having the “go-ahead” from a mortgage company speeds up the process once you are ready to buy. It also shows sellers you are serious about buying and will be able to make a solid offer if you are interested in their home.

Credit Matters
As part of a married couple, there are several things you should know about credit scores that are different from when you were single. Even after you are married, you will still have an individual credit score. However, both will be taken into account when purchasing real estate.

A couple with two good credit scores is more likely to qualify for a lower interest rate mortgage than a couple with one low score and one high or two low scores. If you have a good credit score and your spouse’s is low, it is possible for you to apply for a mortgage in only your name, but then only your income is taken into account. This means the mortgage amount for which you will be approved is much lower because your spouse’s income is not considered.

Selling Real Estate Requires the Approval of Both Owners
When the time comes to sell real estate that is jointly owned, both owners must approve the sale. For example, if you want to sell your home and your spouse is unwilling to sign a listing contract, you cannot legally make the sale. Typically, this is not a problem for married couples, but it can cause issues when couples are separated or planning to divorce.

Furthermore, tax issues arise when property is sold by a married couple, as opposed to a single. For example, IRS Code section 121 allows homeowners to exempt the first $250,000 of capital gains when selling their primary home, but that amount is doubled to $500,000 when the sellers are married. Tax issues change somewhat frequently and have drastically changed in recent years, so it is important to consult a tax expert if you have recently sold your home.

Buying and selling real estate are important decisions and have a major effect on your financial status. If you and your spouse are thinking about buying or selling property, speak with an attorney or real estate professional before moving forward.


When to Bring a Real Estate Attorney into Your Home Buying or Selling Process

Posted On: April 22, 2015

Buying and selling real estate is an exciting experience that can be complex, but it is something people do everyday. Some even do it without any official representation, but this can be a risky gamble. At the very least, most work with a buyer’s or seller’s agent when conducting real estate business. However, there is another professional that can provide assistance and protection when participating in a real estate deal.
How can you determine if a real estate attorney is necessary in the buying and selling process?

What Does a Real Estate Attorney Do?
You might assume a real estate attorney and real estate agent do the same thing, but this is actually not the case. Real Estate Attorneys oversee the legal aspects of buying and selling. Their job is to ensure the rights of the client they represent are protected. Doing so requires checking the sales contract or buyer commitment, checking the property’s title for liens, reviewing mortgage loan documents, and arranging for the payment of any loans associated with the property.

The difference between an attorney and a real estate agent is that an attorney has no stake in whether or not a property sells. An agent relies on the sale of the property to earn a commission, whereas an attorney will be paid for the hours he or she invests in the deal, whether or not it is completed. The agent has a stake in selling or buying the home, whereas the attorney has an interested in doing what is best for his or her client, even if that means the sale or purchase falls through. Of course, working with an attorney increases the odds a deal will be completed successfully.

The benefit of working with a real estate attorney is that he or she works to protect you from financial loss. There is a variety of ways a buyer or seller could lose money in a real estate transaction, so the attorney takes the time to review everything associated with the purchase or sale to ensure this does not happen. It is possible for a real estate agent or the buyer or seller to accomplish this, but depending on the situation, it is well worth the investment to have an attorney oversee the transaction.

Knowing When an Attorney is Necessary
So how do you know if an attorney is necessary when participating in a real estate transaction?

Essentially, it is up to you and your comfort level with the process. If you believe someone is going to work to protect your best interest and has the full capability to do so, you might forgo an attorney. However, doing so is risky.

This is due in part to the complicated nature of real estate contracts. You should never sign anything that you do not completely understand and with which you are not 100% comfortable, especially when it comes to real estate. If you are unsure of any detail included in a real estate contract, an attorney can review the document and better explain to you what it means.

Even if you have purchased or sold real estate in the past, it might be a good idea to work with an attorney now. Any time something is even the slightest bit out of the ordinary, you need the added protection of an attorney. Likewise if you are a first time buyer, buying investment property, purchasing property for above average value, or purchasing more than one property at the same time.

The bottom line is no two real estate transactions are the same. More than five million homes were sold in 2014 and each situation had its own unique set of details. Working with a real estate attorney offers a significant return on investment that you are not likely to regret.




Posted On: March 03, 2015

This press release came our way and the information is so important we wanted to share it with you:

Contact: Neal Patel (Heller): 202-224-6244; Rachel McCleery (Stabenow): 202-224-4822

Senators Heller, Stabenow Introduce Legislation to Eliminate Unfair Tax Bills.
Bipartisan Legislation Will Ensure Mortgage Forgiveness Is Not Taxed as Income.

At present Home owners in foreclosure could face an enormous tax bill if they negotiate a reduction of their debt with the lender. There is now hope that will not be the case for 2015 and 2016 Senators Heller and Stabenow have once again introduced legislation to extend the Mortgage Forgiveness Debt Relief Act for another 2 years (covering 2015 and 2016).

According to a recent press release, U.S. Senators Dean Heller (R-NV) and Debbie Stabenow (D-MI) introduced bipartisan legislation to ensure, when homeowners work with their banks to reduce their mortgage payments, those homeowners will not be hit with a huge tax bill. Without this legislation, homeowners will be required to pay additional taxes when they receive mortgage principal forgiveness on their homes or sell their homes in what are commonly called “short sales.”

“Unless Congress acts, those who are underwater in their homes and have received financial relief for their mortgage could be forced to pay a tax on income they never received. This makes no sense, and the legislation Senator Stabenow and I introduced ensures it won’t happen,” said Senator Dean Heller. “As a member of the Senate Finance Committee I look forward to finding a vehicle to pass this important legislation.”

“It is bad enough that so many families are faced with mortgages that now exceed the value of their home,” said Senator Stabenow. “But to add insult to injury, without this bipartisan legislation, the IRS would require that families willing to work with their lenders pay hundreds or thousands of dollars in additional income tax when they sell or refinance their home. That’s just wrong.”

Declining home prices and rising foreclosure rates have forced many families to sell their homes for less than they paid for them, and sometimes for less than the outstanding debt. The IRS formerly taxed any loan forgiveness provided to homeowners as “income,” meaning underwater families were paying thousands of dollars in income tax for phantom income that wasn’t actual money the family had earned.

While the housing market is beginning to recover, short sales and foreclosures continue. More than one in six (the rate is 16.9%) American homeowners are currently underwater on their mortgages.

Sens. Stabenow and Heller have worked together several times to extend a provision that would protect homeowners from having mortgage relief taxed as income, most recently in the Tax Increase Prevention Act, which extended the tax break through 2014. Their new legislation will extend the current moratorium on taxing mortgage forgiveness through 2016.


Selling Your Home? Don’t Lose Your Buyer Or Jeopardize Your Closing!

Posted On: May 12, 2014

Avoid boundary disputes and other title issues long before you are at the closing table. Selling your home and finding a buyer is stressful enough. Do not lose your Buyer or jeopardizing the closing by a title problem that could have been foreseen and remedied far in advance of closing.

Avoid Certificate of Occupancy (CO), Certificate of Completion (CC), Open Permits, boundary disputes and other title issues long before you are at the closing table. Before you put your house on the market consult your attorney and review what changes may have been made to the original foot print of your home as well as fences, decks, shed and pools that may become an issue. This is also true of items that MAY HAVE BEEN PRESENT when you bought your home but may be an impediment to your sale. Just because it existed at the time of your purchase DOES NOT mean it will not be a problem when you are ready to sell your home.

Most purchasers and their banks will not close if the proper COs CCs and Permits are not in place for the home as it currently exists. All Lenders require Title insurance before they will give a mortgage. All Purchasers should obtain Title Insurance as well. Title companies will refuse to insure a property’s title if a fence or other structure prevents the owner from accessing a portion of the property or if there is a significant encroachment by an adjoining property. Generally, this means that if a fence or structure sits more than 1 foot within your property line, you have a title problem. It does not matter if you installed the fence, who owns the fence, or if existed at the time you purchased your home. Without title insurance, a home simply will not be sold.

If you or your neighbor are planning a change near the property line such as putting up a fence, a shed, privacy/ boundary landscaping such as arborvitae, hedges, or bamboo (highly NOT recommended for other reasons), widening a driveway, other landscape features such as a flower bed or any other installations near the property line, make sure you have a survey of your property to consult. If you do not have a survey or have misplaced your survey, there may be one on file with your town or village building department. If none is on file, my offices can help you identify a surveyor who will prepare a new survey. Towns have different regulations regarding setbacks and heights of placements sheds decks as well as fencing. Also be sure to check with your town before taking action on any plans.

Be sure to measure the placement of the any new installation and compare it with the survey. If there is a disagreement or uncertainty, have an independent professional determine the correct placement of the structure. The survey can then be updated to include the new structure. Some towns now require a new survey after the installation of a deck for instance before they will issue a CC. You may think there is no need to address these details because you get currently along with your neighbors. However many things change over time, relationships change, neighbors may move, and there’s no guarantee what new homeowners will require or if there is a discrepancy the new neighbor may take action without consultation. Ensuring that fences and other structures are properly placed can avoid litigation and title problems. The types of issues that could lose a potential Buyer even at the closing table or possible make your house unmarketable. Taking care of these issues ahead of time may save substantial time and money as well as aggravation at a very stressful time. It also may avoid causing a significant delay in your own moving plans. It may also avoid having to get neighbors’ cooperation in signing and record a vital boundary line affidavits or agreements before you can sell. This will require not only cooperation but will cost money and time, often when time is of the essence for you.

Address these issues before you sell your home and before they ripen into a real title problem.

If you need help in this area or have questions feel free contact attorney SPIRIO at 631-277-8844.