Keller Williams Realty Atlanta – Peachtree Road

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Real Estate Legal Tip

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Handling Earnest Money

Agents should know the laws, real estate commission guidelines, and their own office policies about turning in the Earnest Money for deposit when a contract becomes binding.  These deadlines must be met.

The GAR contract form shows the holder of the Earnest Money (usually one of the real estate brokers).

Things to remember about Earnest Money:

1.        If the contract involves an REO (real estate owned) seller such as a bank, HUD, or FNMA, the counteroffer from the seller may require that the EM be held by the listing agent or even the law firm representing the seller.  If this is a change from the original offer, the agents need to get a contract addendum signed to show who is holding the EM.

2.        Many REO contracts require a large EM deposit, sometimes up to 10-15% of the sales price.  In most cases this is more than the eventual commission, so the closing attorney and agents must make arrangements to have the excess EM wired to the closing attorney prior to closing.

3.        If the closing date is very close to the binding date of the contract, the EM should be a cashier’s check rather than a personal check, so that there is no waiting time for a check to clear.  This is especially important if the real estate broker must refund all or part of the EM in preparation for closing.

Presented by Leigh Clack, Attorney

Neel & Robinson Attorneys at Law, LLC

Leigh.clack@neelandrobinson.com

404-705-3690            fax 404-459-0704

5555 Glenridge Connector, Suite 400. Atlanta, GA 30342

**SEARCH FOR ATLANTA HOMES NOW**

Keller Williams Realty Atlanta – Peachtree Road

Real Estate Legal Tip

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Legal Tip:  Useful Tips to Verify Addresses

It is important to have the correct and complete address (along with the right city and county) shown on all listing agreements, published listings, and contracts.
 
Below are a couple of helpful websites to verify the address, to supply the zip code, and to confirm the city and county.
 
http://www.google.com/ig;
 
http://zip4.usps.com/zip4/zcl_0_results.jsp
 
Title searches and property tax reports are based on having the correct county information in the contract.  However, it is also necessary to have the correct city and zip code for the mailing address.
 
Some properties can use different city names, such as Dunwoody vs. Atlanta or Chamblee vs. Atlanta.  Either one may be correct, and the zip code will be the same either way.  If the property is being appraised, it will be necessary to match the address used by the appraiser, as long as it is one of the correct ways.
 
For legal purposes, the description of the property is based on a reference to a specific lot on a recorded plat or a long legal description with distances and angles. 
 
The mailing address is established by the post office.  Sometimes street names are changed, but this does not affect the legal description of the property.
 
 
 
Presented by Leigh Clack, Attorney
Neel & Robinson Attorneys at Law, LLC
22 Lenox Pointe, Atlanta, GA 30324
lenox@neelandrobinson.com
404-705-3690        fax  404-705-3697

More Atlanta Real Estate Legal Tips:

Atlanta Taxes and Other Tax Tips

Special Stipulations for Residential Leases

How To Protect Your Cash Home Buyers

New Georgia Law Changes Property Tax Assessment Procedure

 The Buyer Should Do Repairs Whenever Possible, Not The Seller

 Watch Language in Short Sale Letters

Flood Insurance Is Not Always Available

Make Sure You Know Who Owns The Property!

**SEARCH FOR ATLANTA HOMES NOW**

Keller Williams Realty Atlanta – Peachtree Road

Real Estate Legal Tip

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New Georgia Law changes Property Tax Assessment Procedure

Georgia recently passed “The Property Tax Assessment and Appeals Reform Bill” (Senate Bill 346) on June 7, 2010.
 
Highlights include:
1.     Every property owner will receive an Annual Notice of Assessment and the right to appeal;
2.     Every Notice of Assessment must contain the estimated property tax (in dollars);
3.     Appeal period has been extended to 45 days;
4.     Alternative streamlined appeal option for properties valued over $1,000,000;
5.     Automatic taxpayer victory on appeals when government fails to respond within 45 days;
6.     Requirement that all relevant sales, including distress sales, be included when determining Fair Market Value (FMV);
7.     Requirement that only “current use of property” be used in determining FMV;
8.     Taxpayer must be given access to all data used in determining FMV;
9.     Sales price establishes FMV for next tax year.
 
Remember that a reduction in the assessment does not always reduce the actual bill.  Other factors such as the millage rate, homestead exemption, and other exemptions will also affect the final tax bill amount.
 
 

Presented by Leigh Clack, Attorney
Neel & Robinson Attorneys at Law, LLC
22 Lenox Pointe, Atlanta, GA 30324
lenox@neelandrobinson.com  404-705-3690  fax 404-705-3697  

More Atlanta Real Estate Legal Tips:

 Why Closing Attorneys Need Wired Funds for Closing

 The Buyer Should Do Repairs Whenever Possible, Not The Seller

 Watch Language in Short Sale Letters

Flood Insurance Is Not Always Available

Make Sure You Know Who Owns The Property!

Quit Claim Deeds & Owner Title Insurance 

Choosing A Settlement Agent When Buying A Fannie Mae Property

KW Atlanta Legal Tip: Georgia 2010 Filing Deadlines Coming Soon!

Due Diligence When Buying a Condo, Townhome or In a Planned Community

 Try To Avoid Credits & Allowances!

Special Issues with Buying/Selling Condominiums

 First-Time Home Buyer’s Tax Credit – Don’t Wait Till The Last Minute!

 Buying Property From The Bank: Tips For Buyers

Waiting Periods Required Under New Truth in Lending Law

  Termite Letters – Still a Good Idea

**SEARCH FOR ATLANTA HOMES NOW**

Keller Williams Realty Atlanta – Peachtree Road

Real Estate Legal Tip

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“Dry Closings”
When is a Closing “Closed”?

 
Many closings are forced to be “dry” or “in escrow”, usually because wired funds have not arrived from the new lender. Most lenders will approve a “dry” closing when the only condition is the receipt of their own wired funds by the closing attorney.
 

When a closing ends “in escrow”, always make sure of the following BEFORE you leave the closing table:
 
1.     Closing attorney should have a “Total Escrow Agreement” signed by buyers and sellers to acknowledge that the closing is complete and can not be voided, rescinded or challenged by either party.  The reasons for the escrow should be clearly stated, typically “Receipt of Lender’s Funds” and/or “Lender’s funding number”.
 
2.     It is a good idea to extend the contract to the actual disbursement date, even if the closing papers have been signed by the original deadline.
 
3.     Possession and occupancy dates should be reviewed and clarified, especially if the contract says “___ hours after closing”.  In any event, the change of possession/occupancy date and time should be confirmed in writing by all parties.
 
4.     Utilities: make sure that any cancellations and transfers are adjusted to match changes in possession or occupancy.
 
How to avoid these “dry” closings:

 1.     Do not schedule closings after 4:00 unless the wired funds have arrived and the lender will stay after 5:00 to give final approval

 2.     Do not rush your buyer or seller into a closing with last-minute papers and packages.  Closing papers sent at the last minute do not guarantee loan funds (and are often inaccurate).
 
Presented by Leigh Clack, Attorney – Neel & Robinson Attorneys at Law, LLC
22 Lenox Pointe, Atlanta, GA 30324      lenox@neelandrobinson.com
404-705-3690        fax 404-705-3697

More Atlanta Real Estate Legal Tips:

 Why Closing Attorneys Need Wired Funds for Closing

 The Buyer Should Do Repairs Whenever Possible, Not The Seller

 Watch Language in Short Sale Letters

Flood Insurance Is Not Always Available

Make Sure You Know Who Owns The Property!

Quit Claim Deeds & Owner Title Insurance 

Choosing A Settlement Agent When Buying A Fannie Mae Property

KW Atlanta Legal Tip: Georgia 2010 Filing Deadlines Coming Soon!

Due Diligence When Buying a Condo, Townhome or In a Planned Community

 Try To Avoid Credits & Allowances!

Special Issues with Buying/Selling Condominiums

 First-Time Home Buyer’s Tax Credit – Don’t Wait Till The Last Minute!

 Buying Property From The Bank: Tips For Buyers

Waiting Periods Required Under New Truth in Lending Law

  Termite Letters – Still a Good Idea

**SEARCH FOR ATLANTA HOMES NOW**

Keller Williams Realty Atlanta – Peachtree Road

Real Estate Legal Tip

Presented By:

Why Closing Attorneys Need Wired Funds for Closing

In the “old days”, lenders sent regular checks and buyers wrote personal checks at closings.  Sometimes lenders did not even provide the check until after closing!
 
In the early 1990’s, Georgia passed the Good Funds Law to provide that all funds over $5,000 from buyers and sellers brought to closing must be in the form of cash, cashier’s check, or wire.  Lenders could still send their own checks, but they could not wait to fund after the closing.
 
In 2007, checks from major lenders started bouncing, and the funding process changed.  Title companies recommended that closing attorneys require wired funds for all lender funds and even funds coming from other closing attorneys.
 
Cashier’s checks can be stopped by a “lost or stolen” affidavit.  There have been many reports of stolen blank cashier’s checks and even counterfeit cashier’s checks. 
 
In addition, a deposited cashier’s check is treated just like a personal check;  it is not considered “cleared funds” for several days.
 
Closing attorneys are being asked to send wired funds for most payoffs, so they can not wait for the cashier’s checks to “clear”.
 
Commercial closings have always required wired funds, and this is the best way to protect the buyers, lenders, sellers, and closing attorneys for residential closings also.

More Legal Tips From Neel & Robinson:

 The Buyer Should Do Repairs Whenever Possible, Not The Seller

 Watch Language in Short Sale Letters

Flood Insurance Is Not Always Available

Make Sure You Know Who Owns The Property!

Quit Claim Deeds & Owner Title Insurance 

Choosing A Settlement Agent When Buying A Fannie Mae Property

KW Atlanta Legal Tip: Georgia 2010 Filing Deadlines Coming Soon!

Due Diligence When Buying a Condo, Townhome or In a Planned Community

 Try To Avoid Credits & Allowances!

Special Issues with Buying/Selling Condominiums

 First-Time Home Buyer’s Tax Credit – Don’t Wait Till The Last Minute!

 Buying Property From The Bank: Tips For Buyers

Waiting Periods Required Under New Truth in Lending Law

  Termite Letters – Still a Good Idea

 
 
 
Presented by Leigh Clack, Attorney
Neel & Robinson Attorneys at Law, LLC
22 Lenox Pointe, Atlanta, GA 30324
404-705-3690        fax  404-705-3697
lenox@neelandrobinson.com

Keller Williams Realty Voted ‘”Highest Satisfaction For Home Buyers Among National Full Service Real Estate Firms, Two Years in a Row!” By J.D. Power & Associates

**SEARCH FOR ATLANTA HOMES NOW**

Keller Williams Realty Atlanta – Peachtree Road

Real Estate Legal Tip

Presented By:

Watch Language in Short Sale Letters

Watch out for these phrases in Short Sale Approval Letters:
 
 
“Arm’s Length Transaction”
 Many lenders send an affidavit for the buyers and sellers to sign stating that they do not have a personal or business relationship.
 
“Release of Liability”
 Sellers always want this and expect this, but short sale letters rarely provide a full release, meaning that the lender does have the right to pursue payment of the shortage after the closing.
 
“Subsequent Sales by Buyer”
Many letters prohibit short sale buyers from flipping, selling, or otherwise transferring the property to anyone else within the first 30 days after closing.  The lender can void its approval and release of the mortgage, and the buyer is not protected by owner’s title insurance if the buyer violates this condition. 
 
“Waiver of Escrow Refund and Mortgage Insurance Refund”
Any escrow balance held by the short sale lender will be retained and applied to the payoff.  The seller waives any right to receive an escrow refund.  Also, any FHA refund of MIP goes to the lender.
 
“FHA Incentive to Seller”
In a short sale of an FHA loan, the seller may be able to receive up to $1,000 out of the payoff, but these funds are usually needed for liens, taxes, judgments, or HOA dues.
 
 
 
Presented by Leigh Clack, Attorney
Neel & Robinson Attorneys at Law, LLC
22 Lenox Pointe, Atlanta, GA 30324
lenox@neelandrobinson.com
404-705-3690       fax 404-705-3697

More Legal Tips From Neel & Robinson:

Flood Insurance Is Not Always Available

Make Sure You Know Who Owns The Property!

Quit Claim Deeds & Owner Title Insurance 

Choosing A Settlement Agent When Buying A Fannie Mae Property

KW Atlanta Legal Tip: Georgia 2010 Filing Deadlines Coming Soon!

Due Diligence When Buying a Condo, Townhome or In a Planned Community

 Try To Avoid Credits & Allowances!

Special Issues with Buying/Selling Condominiums

 First-Time Home Buyer’s Tax Credit – Don’t Wait Till The Last Minute!

 Buying Property From The Bank: Tips For Buyers

Waiting Periods Required Under New Truth in Lending Law

  Termite Letters – Still a Good Idea

Keller Williams Realty Voted ‘”Highest Satisfaction For Home Buyers Among National Full Service Real Estate Firms, Two Years in a Row!” By J.D. Power & Associates

**SEARCH FOR ATLANTA HOMES NOW**

Keller Williams Realty Atlanta – Peachtree Road

Real Estate Legal Tip

Presented By:

Deadlines and Issues for the 2nd Quarter

April 1st marks the beginning of the 2nd quarter of the year, and there are some deadlines and issues to consider in selling, buying, or managing real estate.
 
1.      Income tax:  filing deadline is April 15, 2010 (for 2009 income).

Tax returns are required for almost all mortgage applications and short sale applications, especially if the closing will take place after April 15th.
 
2.      First Time Homebuyer Credit (up to $8,000) and Move-Up Homebuyer Credit (up to $6,500)
 
     Contract must be signed by April 30, 2010
 
     Closing must take place by June 30, 2010
 
3.      FHA upfront MIP increases from 1.75% to 2.25% for any FHA case numbers issued starting on April 5, 2010
 
Make sure that your buyer’s case number has been issued for an FHA loan application, or make sure that the buyer gets a revised Good Faith Estimate.
 
4.      Home Affordable Foreclosure Alternatives program goes into effect on April 5, 2010
 
This program gives incentives to lenders to expedite and streamline the short sale process.
 
 

Presented by Leigh Clack, Attorney
Neel & Robinson Attorneys at Law, LLC
lenox@neelandrobinson.com
22 Lenox Pointe, Atlanta, GA 30324
404-705-3690      fax  404-705-3697 

Keller Williams Realty Voted ‘”Highest Satisfaction For Home Buyers Among National Full Service Real Estate Firms, Two Years in a Row!” By J.D. Power & Associates

**SEARCH FOR ATLANTA HOMES NOW**

Keller Williams Realty Atlanta – Peachtree Road

Real Estate Legal Tip

Presented By:

Make Sure You Know Who Owns The Property!

Ownership is very powerful, and there are only three basic ways to pass title:
1. Deed             2. Death       3. Court Order
 
It is vital to know the correct and complete ownership of a property and how it is owned:
 
Individual? LLC? Trust? Corporation? Estate?  Heirs? Joint Tenancy?  Tenancy in Common?  Partnership?
 
The names of the owners and the type of ownership can affect business transactions, divorces, estate planning, insurance, and tax planning.  For example:
 
1.     Listing agreement/Purchase and Sale Contract– not valid without the signatures of all owners.
 
2.     Divorce – need to know if both spouses are on title or just one – was title transferred in the divorce decree?
 
3.     Estate Planning – critical information for drafting wills, minimizing estate tax, and transferring property out of estates.
 
4.     Insurance – owners should  be the “insured” on the property insurance.
 

Presented by Leigh Clack, Attorney
Neel & Robinson Attorneys at Law, LLC
22 Lenox Pointe, Atlanta, GA 30324
lenox@neelandrobinson.com 
404-705-3690  fax 404-705-3697

More Atlanta Legal Tips:

 New Changes To FHA Financing

Quit Claim Deeds & Owner Title Insurance 

Choosing A Settlement Agent When Buying A Fannie Mae Property

KW Atlanta Legal Tip: Georgia 2010 Filing Deadlines Coming Soon!

Due Diligence When Buying a Condo, Townhome or In a Planned Community

 Try To Avoid Credits & Allowances!

Special Issues with Buying/Selling Condominiums

 First-Time Home Buyer’s Tax Credit – Don’t Wait Till The Last Minute!

 Buying Property From The Bank: Tips For Buyers

Waiting Periods Required Under New Truth in Lending Law

  Termite Letters – Still a Good Idea

Keller Williams Realty Voted ‘”Highest Satisfaction For Home Buyers Among National Full Service Real Estate Firms, Two Years in a Row!” By J.D. Power & Associates

**SEARCH FOR ATLANTA HOMES NOW**

Keller Williams Realty Atlanta – Peachtree Road Legal Tip: 

Make Sure You Have an Enforceable Contract!

1.        Legal description – fill in all blanks, include legal description from deed, provide tax parcel number, attach survey if available.

2.        Seller signatures – need all current owners of the property to sign.

3.        Buyer signatures – need all prospective buyers/borrowers to sign.

4.        Closing date – be reasonable – don’t create unrealistic expectations.

5.        Acceptance date and time – fill in.

6.        Changes – have all parties initial and date.

7.        Any exhibits, including seller’s disclosure – be sure to attach if referred to as attached.

8.        Earnest money – must be delivered and deposited.

9.        Clarify all deadlines by either “calendar days” or “business days”

10.   Be specific in all special stipulations, especially with items to remain or repairs to be done, including the remedies if not done

Presented by Leigh Clack, Attorney
Neel & Robinson, Attorneys at Law LLC
lenox@neelandrobinson.com
404-705-3690         fax 404-705-3697
22 Lenox Pointe, Atlanta, GA 30324

More Legal Tips From Keller Williams Realty Atlanta:

Due Diligence When Buying a Condo, Townhome or In a Planned Community

 Try To Avoid Credits & Allowances!

Special Issues with Buying/Selling Condominiums

 First-Time Home Buyer’s Tax Credit – Don’t Wait Till The Last Minute!

 Buying Property From The Bank: Tips For Buyers

Waiting Periods Required Under New Truth in Lending Law

  Termite Letters – Still a Good Idea

Keller Williams Realty Voted ‘”Highest Satisfaction For Home Buyers Among National Full Service Real Estate Firms, Two Years in a Row!” By J.D. Power & Associates

Keller Williams Realty Atlanta Legal Tip: 

 Fulton County Taxes Are Out as of October 7th

• Fulton County property tax bills have been mailed to some properties, and the rest will be coming out by October 15^th.  The due dates for 2009 have been extended to 11/30 for City of Atlanta and 12/15 for Fulton County.
• If you are closing a property in Fulton County, it will help both your buyers and sellers if you make sure that the Fulton County taxes are paid at closing. This may require an update to short-sale HUD’s and REO HUD’s that have already been prepared and/or approved.
• Do not assume that your buyer’s new lender will pay these bills, because the due dates are much later than usual, and the lender expects the bills to be paid already.
• The bills from Fulton County are all marked as “temporary”, which gives the Tax Commissioner the right to issue supplemental bills later on.  Therefore, the title insurance issued to the new buyer and lender will still contain an exception for 2009 taxes.
• Keep in mind that most short sale sellers will be uncooperative and/or unavailable when the supplemental bills come out, and REO sellers do not assume any liability for taxes that come out after the closing.
• Make sure that your buyer understands this and assumes the responsibility for paying any supplemental bill.

Presented by Leigh Clack, Attorney

Neel & Robinson, Attorneys at Law LLC

22 Lenox Pointe, Atlanta, GA 30324

lenox@neelandrobinson.com

404-705-3690     fax 404-705-3697

More Keller Williams Atlanta Legal Tips:

First-Time Home Buyer’s Tax Credit – Don’t Wait Till The Last Minute!

 Buying Property From The Bank: Tips For Buyers

Waiting Periods Required Under New Truth in Lending Law

 Fulton County Property Tax Bills – How Does This Affect Buyers and Sellers in Fulton County?

 Termite Letters – Still a Good Idea