Tag Archives: insurance

Major Security Threats

One of the most worthwhile expenses is spending money to ensure that you have an effective security program in place, whether for your own commercial or residential real estate properties. It is easier to attract quality tenants and it certainly aids in lowering the amount of unwanted claims that you will have at your location.

There are three major security threats that a property can face in today’s market:

 

vandalismVANDALISM

It is an offense that occurs when a person destroys or defaces someone else’s property without permission. Effects of vandalism may include broken windows and graffiti. While vandalism may be considered “art” by some, it is nonetheless a crime against property that is punishable by jail time, monetary fines, or both. Graffiti and vandalism in residential and commercial areas has always been a problem. Although the growth of gangs was pretty small during the first part of this century, it has started to increase again most especially with some vacant units you are managing. Common behaviors that may lead to a vandalism charge include: Spray painting another’s property with the purpose of defacing, breaking someone’s windows, defacing public property with graffiti and other forms of “art,” kicking and damaging someone’s property with your hands or feet, and other several other behaviors. Vandalism is covered by state statutes, and varies by state. Some states refer to vandalism as “criminal damage”, “malicious trespass”, “malicious mischief”, or other terms. In an effort to control the impact of vandalism, many states have specific laws that may decrease certain forms of vandalism. It has the potential to cost states millions of dollars each year in clean-up efforts and other program costs, and may cause psychological or emotional damage to property owners as well. On the positive side, many firms have tailored their real estate security programs to match market conditions, giving property owners that have vacant units specialized security that is designed to help prevent property loss until the property can be rented. Some of this sophistication was developed during the Great Recession, when thousands of buildings were vacant and targeted by those seeking to lower their value through vandalism.

 

 

theftTHEFT

Theft is a criminal act which property belonging to another is taken without that person’s consent. They are distinguished by the means and methods used, and are separately designated as those types of crimes in criminal charges and statutory punishments. Police statistics say that there is always more property crime near commercial establishments because there is simply more traffic that visits those locations on any given day.  There are some security companies that offer sophisticated camera systems that are hooked up to the internet and allow centralized monitoring of properties for a lower price than you would pay for an on-site guard. Even if you have a guard present, cameras can also enhance their effectiveness. The key to being successful by adding cameras to block theft is to place them in places that they will be effective.

 

gangsGANGS

According to Merriam-Webster, a Gang is a group of people who do illegal things together and who often fight against other gangs. Technology has advanced to the point where criminals have started removing car collision warning systems and using the radar to scan buildings in a neighborhood. They become capable of determining whether there is any movement inside a building, so they can see if it is possible to rob the place that has no one in sight. Some retail locations have also had their tenants add 3D-sound systems that push directed sound out to address people individually. But the problem is that tenant security is frequently co-opted into addressing people who are merely shoppers, turning them off as clients. Using a firm that provides real estate security programs that take these tactics into account can help lower your liability and your potential loss. The most important thing for you to know as a real estate professional regarding gang activity is whether a potential security firm that you interview will be direct about this type of problem or whether they will discount it as not important. A solid company will always have an answer for you that covers the conditions that you will likely face.

 

Find a firm that understands nuance when it comes to threats and can leverage technology and know-how to reach your security goals, so you could end-up saving yourself a lot of time and money. Also, have a good insurance on-hand just in case the worst comes.

 

Source: RealtyTimes.com, Criminal.FindLaw.com, thefreedictionary.com, merriam-webster.com

 

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Title Company: What, Why, How?

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You will need a title company to work with your home buying or selling plans early in the process. This information is often listed on the sales contract and preliminary funds will need to be given to the title agent within a few days of executing the sales contract.

Title Company is a company involved in examining and insuring title claims for real estate purposes. The company verifies ownership of real property and determines the valid owner through a thorough examination of property records in a Title Search. The title company usually does an abstract of title. The abstract determines the legal owner of the property; reveal any mortgages, liens judgments or unpaid taxes outstanding on the property and details any existing restrictions, easements or leases that affect the property. After completing the abstract, the company issue a title opinion letter. This will set forth all the things that should be done and any problems that should be corrected before a purchaser can receive a good title.

Title insurance, on the other hand, protects the lender and/or owner against lawsuits or claims against the property that result from disputes over the title. The insurance company will pay the damages to the new title holder or secured lender or take steps to correct the problem if a problem with the property ownership is later discovered such as an incorrect boundary description. This covers problems that did not show up during the title search or were missed by the examiner and errors in public records. Title insurance does not cover defects that occur after you purchase the property. Policies often exclude problems having to do with easements, mineral and air rights, and liens. Title insurance policies are paid in full with a one-time fee which is usually part of closing costs. Payment is usually made by the buyer, unless the state requires the seller to purchase title insurance or the seller agrees to pay for it.

Ideally, all previous claims to the property will be released during a title search, and if not, there is a title history issue that will need to be worked out before closing. The title company will use its research to prepare a preliminary title commitment, and this may be provided to the lender as part of the loan process.

title4

Before a title company issues the title insurance, it will prepare an abstract of title, which is a brief history of the titles for a piece of land. It lists all the legal actions that have been performed or used in conjunction with a piece of property. This is used to determine whether or not there is any kind of claim against a property. The abstract of title includes transfers, grants, wills and conveyances, liens and encumbrances. It also provides any evidence or proof of satisfaction or other facts or information pertinent to a piece of property. All potential buyers of a property should request this to determine the status of the property. Then, it will issue a title opinion letter, which is a legal document that speaks to the validity of the title.

These title companies also often maintain escrow accounts to ensure that this money is used only for settlement and closing costs, and may conduct the formal closing on the home. Escrow accounts contain the funds needed to close on the home. At the closing, a settlement agent from the title company will bring all the necessary documentation, explain it to the parties, collect closing costs and distribute monies. Finally, the title company will ensure that the new titles, deeds and other documents are filed with the appropriate entries.

There are two main types of title insurance policies: owner’s title insurance and the lender’s policy. When you buy your home, you will arrange to buy a title insurance which will cover your interest in that property. The limit of this owner’s policy will generally be for the market value of the house at the time of the purchase. If you will be obtaining a mortgage on the property, your lender will require a lender’s policy to protect their interest in the property. The lender’s policy will be written for the amount of the mortgage. You may be wondering why two policies are necessary to insure the same piece of property or you may be wondering if you have to pay two separate title insurance premiums. In most cases, you will pay for the two policies together and this cost will be a discounted price.

The owner’s policy will cover losses or damages you suffer if it is found that the property belongs to someone else, or if there is a defect or lien on the title, if the title is unmarketable, or if there is no access to the land. Your owner’s policy will have a section setting forth what is covered as of the effective date. It will guarantee that your ownership is free from defects or encumbrances, except and listed as exceptions in the policy, it will guarantee you have access to the land and it will guarantee that you have the legal right to sell the property and convey marketable title to a new owner.

title2

The lender’s or mortgagee policy, on the other hand, protects the lender for the amount of their loan. This type of policy is called the ALTA policy and is a standard policy approved by the American Land Title Association. It is issued to banks and other institutional lenders. In addition to covering the lender for the losses that the lender would incur if another creditor were first in line.

When an owner’s and a lender’s policy are issued at the same time, or concurrently, the premium is less expensive than if the two policies are issued separately. Since the title insurance company only has to search the records one time, and because a concurrent policy don’t increase the risk that much, the concurrent policy premium will generally cost about one third less than two separate policies.

The costs of the owner’s and the lender’s policies will vary depending on the location. The costs may vary from state to state, or county to county, or even from one company to another. Before choosing your title company or closing agent, inquire as to the prices they charge for a title insurance policy. Ask for the lowest rate allowed by law, and keep shopping for a lower rate if your closing agent will not negotiate on their fees.

Most lenders will require that you purchase a title insurance policy as a condition of closing, and the title company will prepare a title insurance policy on your behalf. Title insurance is crucial because it protects you from financial loss if there is a dispute or claim on the property later on. This type of issue ultimately could result in your loss of the property, which can be incredibly costly to endure. There may also be legal expenses, and these are covered by title insurance as well.

Look for a title company that has years of experience doing this. Contact the Better Business Bureau to determine whether the company has any complaints against it.

Note that you may be able to get a discounted rate on your title insurance if the property was sold within the previous five years; just call and ask.

You may meet with or talk to an agent from the title company on multiple occasions. First, you may decide to meet with a few agents from title companies before you buy your home to help you decide which company to go with.

If the title company maintains an escrow account for you, the agent may reach out to you to provide details on that account or you may contact him with questions.

If your title company handles your closing, you will meet with a settlement agent in person then. At this time, the settlement agent will explain all the documents related to the settlement before you sign anything. And, of course, if something goes wrong with regards to the title, you will likely meet with one of their agents then.

Consumers should feel free to contact their title company at any time to get answers to their questions on title searches, title abstracts, title insurance, escrow accounts or closings.

title5

The final function that a title company plays in the buying and selling process is assisting with closing. Your closing agent will collect all invoices outstanding that are related to the transaction and will collect the funds from various parties. He or she will prepare a closing statement that shows where every penny is allocated, and the closing agent will disburse the funds as necessary after all parties have executive the closing documents. The closing agent will also prepare, notarize and file closing papers related to the transaction.

These are all critical functions in the buying and selling process, so you should make an effort to find the best title company possible to work with for your transaction.

 

Source: realtytimes.com, Zillow.com, uslegal.com, Investopedia.com

Don’t waste your money

Buying a home is a very big expense. Having that new shiny house will keep yourself caught up in rampant lifestyle inflation.

Here’s a quick advice: STOP SPENDING!

Owning a home comes with its fair share of unique costs like property taxes and urgent repairs and oh, the energy bills! So try to not add other cost by shelling out for unnecessary expenses. Here are some major cash outlays that buyers can avoid.

 

say no

 

Too much house

Being approved for a hefty purchase price puts you on a high. According to Andrew Gipner, a financial adviser at Longview Financial Advisors in Huntsville, AL, “The house that you can afford with the money you’re lent can make the budget go out of whack.”

Consider having less closet space, buying fewer bedrooms or maybe eliminating a formal dining room to your wanted list. “You don’t use the dining room nearly as often as you think. It’s kind of a wasted space.” Says Noelle Hans-Daniels, a Sotheby’s Realtor® in Indianapolis.

 

landscapingFixing up your outdoor space ASAP

You might be itching to host your first late-season barbeque for that housewarming party or you’ve been dreaming of having those koi pond. Hold on! Updating your outdoor space shouldn’t be your first priority, especially if you’re tight on cash. Landscaping and other décor can be put on pause. Building something new will cost you double or a lot more than you can chew on. So exercise some caution before doing anything rash. Try pricing out your plans with a landscape contractor, and consider rolling them out in phases if possible.

 

insuranceOld, outdated insurance

“You may stay with the same company, but you may find something that’s a little better price for the same thing,” Gipner says. “Sometimes, people may not want to shop around or may be married to a particular company.”

It might be time for a change. Shop or look around. Just because the same company had a good deal on auto or renter’s insurance doesn’t mean it’s the best fit to protect your home. You need to go through all your options carefully, look for a deal that won’t crush you financially but will leave your house and its belongings secure. Because it’s not just your stuff that you need to protect, even your roof, yard and foundation needs it too.

 

overstuff bedroomSpace-filling stuff

“A lot of people will go out and say, ‘Oh my gosh, I’ve got to fill this space and buy stuff,’” Gipner says. “I’m not against possessions, but the way some people do it can be seriously detrimental to their finances.”

Moving out from an apartment can leave you breathless with how much space you have in your new home. Astounded with an extra bedroom, a big dining room and oh yes, another bedroom! Breathe. You don’t need to fill it all at once. Give yourself, and your home, time for personality to emerge.

See what you really need and what you really like. Save it for the renovation fund, because you’ll never know what the future holds.

 

Decision making

Extended warranties

Many homes don’t come with appliances installed, so first-time homeowners might find themselves making large purchases like for a dishwasher or refrigerator.

Here’s a good tip: You don’t need the extended warranty.

Of course, something might break within the relatively slim service window, but the money you’ll spend fixing one thing will be far less than the extended warranties on all the things. According to Consumer Reports, your average warranty costs should be about $123 for major appliances, and a single repair costs not much more. It’s a risk, but you’ll come out ahead in the long run.

 

yard maintenanceYard Maintenance

“You can still be part of an HOA and cut your own grass,” Gipner says. “You don’t have to pay someone an exorbitant amount of money to come out and cut your grass.”

Yes, having your own yard is definitely exciting. It’s important to keep it healthy and watered, but you don’t need to go overboard.  Resist the temptation of hiring an additional help for your yard – even if you’ve lucked into an HOA that covers it. A gorgeous lawn is achievable – and it can be done all on your own. You can try, right?

 

Source: realtor.com, homesgofast.com, lifehacker.com

 

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