COPYRIGHTED MATERIAL
Mobile homes
• also called a manufactured home • a pre-fabricated moveable structure • must have a toilet, a place to sleep, and a place to cook, to receive mortgage deduction tax benefit • building designed to house more than one family in separate units • owner of the building may live in one of the units and rent out the others
Multifamily housing
Making the Purchase. These days, the process of buying and selling a home has gotten rather complicated. A home purchase involves mountains of paperwork and legal forms. Most home buyers and sellers work with a real estate agent who is an expert in home sales and advises them throughout the transaction. When a house hunting buyer finds a home that is for sale and wants to buy it, they make an offer to purchase . Buyers and sellers usually negotiate, offering multiple counteroffers for the proposed price. If the buyer and seller reach an agreement, they sign a contract for sale . At that time, the buyer submits an earnest deposit, which is a payment of about 3% of the purchase price as proof that they are serious about buying the property . If the sale does not go through as a result of something the seller is responsible for, the earnest money is returned to the buyer. If the sale is not completed due to the fault of the buyer, it is paid over to the seller. Escrow. There are a lot of things that have to be done before transfer of ownership of a property can take place. For several weeks, the transaction is placed in escrow . This is an arrangement by which a neutral third party (an escrow company) holds papers and money for the buyer and seller (including the earnest deposit), while the buyer and seller complete their duties and responsibilities according to their agreed schedule. During the escrow period, the buyer makes a physical inspection of the property to determine if there are any major defects. Title Inspection. How would you feel if you bought a home, believing you owned it 100%, only to find out later that someone else has a claim of ownership superior to yours? What if you found out that the property is collateral (pledged) for someone else’s debt, and you will have to repay the debt or lose ownership? What if you bought the property and later discovered that half of what you thought was your backyard is actually your neighbor’s property? In the context of real estate, title means legal ownership . While in escrow, every sale of real estate gets a title inspection . An expert checks the past ownership and other records of the property for encumbrances which are any claims or rights of others that can impact your ownership. Common encumbrances are: Liens. A lien (pronounced “leen” ) is a right that secures a debt owed by the owner of the property . In other words, the property has been pledged as security for the debt. Other than a lien created by a mortgage, the most common type of lien is the state’s property tax lien . By law, property taxes are automatically secured by the property. The state’s property tax lien sits permanently on title securing the owner’s obligation to pay property taxes. PRODUCT PREVIEW House Hunting Across the Pond If looking for a real estate agent in London, better drop the “real.” They’re called “estate” agents in the UK and Ireland. Fin Lit Trivia Fin Lit Trivia Fin Lit Trivia
Chapter 9 | Home is Where the Mortgage or Lease Is 154
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