Category: Real Estate Lawyer

A short sale is an arrangement when a homeowner, who is facing a financial crisis, is having difficulty keeping up with their mortgage payments. As an alternative to agreeing with the mortgage company or another lending institution to foreclose on their home, an individual can instead apply for permission to sell their house for less than its market value. Typically, the lender will then discharge the remaining amount.

A short sale allows both the lender and the homeowner to avoid a foreclosure which can prove to be quite costly for both parties. If you are facing a financial predicament and can no longer make your monthly mortgage payments and want to opt for a short sale, it can be highly beneficial for you to hire an experienced real estate lawyer to help you avoid foreclosure.

Why Would a Lender Agree for a Short Sale?

Filing for foreclosure costs banks and financial institutions a great amount of money as they must assume the responsibilities related to the maintenance and taxes of the property. In addition to that, the housing prices are fairly low and selling a house does not yield them sufficient amount of money to recoup their losses.

Therefore, lenders are more inclined towards a short sale rather than opting for a foreclosure. A short sale transaction allows the lenders to obtain far more money back and help them to avoid the charges and hassles associated with the filing for a foreclosure. As a matter of fact, a short sale is beneficial for all the parties in a transaction that includes the buyer as well. The buyer is able to purchase a property at a much lower price than its original value and does not have to deal with the eviction process or many other issues that are typically involved in a conventional sale.

Short Sale and Your Credit Score

A short sale is a better choice than a foreclosure for a multitude of reasons. It is more private, allows you to live rent-free until the completion of the transaction, and provides psychological comfort. However, the most important benefit of a short sale is that it helps a homeowner to save their credit ratings by avoiding foreclosure.

A foreclosure can prove to be devastating for your credit ratings. A poor credit score can severely put you at a disadvantage when it comes to borrowing money as you will either have to face rejection when applying for loans or pay a higher amount of interest if you manage to obtain a loan.

It may also reflect poorly on you if you apply for a new job, particularly if it is related to the financial sector or involves handling sensitive information. Therefore, you should procure the services of a competent real estate lawyer to make sure your credit rating is not affected due to your short-term financial crisis.

Using their knowledge pertinent to law and negotiation techniques, a skillful real estate lawyer will be in a better position to negotiate with your lender and persuade them to opt for a short sale option, which will help you to save your credit ratings and provide numerous benefits over a foreclosure.

If you wish to know more about how short sale can help to save your credit ratings, call the offices of Covert & Covert LLP at (630) 717-2783 and schedule a free consultation session.

When it comes to purchasing a home, the difficult real estate terminologies can often confuse many people who are looking to buy a house, making the process more complicated and complex. Though a person may hire a realtor and a real estate lawyer to protect their interests, it is important that they familiarize themselves with the basics. One of the terms which mostly puzzles the buyers is ‘lien’.

What is Lien?

A Lien is a claim that an individual or entity has on a residential property with respect to the unpaid bills of the homeowner. When a lien is placed in the title of a house, the owner loses the legal right to refinance, sell, or transfer a clear title of ownership unless they discharge it by paying it off in full. As Lien is a financial obligation of a homeowner owed to a creditor or lending institution, the seller will be unable to obtain the full price of the property. Thus, it can reduce the resale value of the property and, in some cases, makes it a less enticing option for the buyer.

Types of Real Estate Liens

Liens can be broadly categorized into two types; voluntary and involuntary. The former can be initiated by drafting a contractual agreement between the individual seeking the lien and the creditor who is offering financial assistance. An example can be a mortgage provided by the bank so that an individual can purchase the property.

Conversely, an involuntary lien is not initiated by a homeowner, but it is a financial instrument to penalize the homeowner, mainly pertinent to construction or tax-related issues. In such instances, the entity to whom the amount is owed will be able to place a hold on the house until the amount is settled, among other possible legal recourses.

A Construction Lien

A construction lien is placed on the house in an event where there are unpaid repairs or renovations carried out in order to increase the value of a property. This arrangement is made especially when the construction company hires sub-contractors or specialists to perform certain tasks. If they are not remunerated for their services, they have a legal right to file a lien against the property for payment.

Legal Help for Invalid Liens

Voluntary liens are placed on the house through mutual understanding between a homeowner and creditor; however, there are instances where the lender may attempt to misuse the arrangement. If you have a lien on your house and you believe that your rights are being violated, you should hire an experienced real estate lawyer to protect your financial interests.

The involuntary liens may often cause disputes and delay a potential arrangement of selling your house. If you feel that your house is being subjected to an invalid lien, it is critical that you seek legal counsel from a competent real estate lawyer. Your attorney will devise a solid argument in your favor and help you navigate through any issue relating to an invalid lien on your real estate property.

If you wish to know more about this subject or speak with an experienced real estate lawyer, contact the offices of Covert & Covert LLP at (630) 717-2783 and schedule a free consultation session.

Purchasing a house is not an easy feat and you may come across several issues in the process of finding your perfect home. It is imperative that you take measures to find a suitable house, which is financially viable and meets your requirements. There are several issues a person can face while buying a house. Here are 3 most common issues that people experience when looking to buy a house:

Mortgage

The most important thing when you are looking to buy a house is mortgage . You have to ensure that whichever house you choose gets approved by the bank. In some cases, the bank does not approve your application even though your credit rating is good and you have all the relevant documents. Banks perform a due diligence of your chosen house before finalizing the mortgage arrangement. They may not be satisfied with your potential house as the construction might be old or perhaps its condition is deteriorated, which will only leave you the choice to look for another house.

Property Titles

It is vital that there is no dispute over the property title of your potential home. A clear property is not only important to get a mortgage, but it will also play an important part when you will sell your house in future. Reselling a house with a property title that has disputes and legal backlogs can be extremely difficult. Therefore, it is always suggested that you must not include a house with an unclear property title in your portfolio to avoid potential future losses and legal trouble.

Location is in a high-risk area

Location of the house is perhaps the most crucial aspect that you must consider before purchasing a home. There are several elements that come into play when choosing a perfect location for your home. For instance, you must avoid a house with proximity to industries, chemical plants, or a dumping ground. Moreover, you may also give consideration that your house is not in the high-risk geographical area, which has a history of natural disasters like earthquakes, tornados, etc. It may seem like a long stretch; however, prevention is always better than cure.

Finally, you must also consider the potential of appreciation of the value of your house. You can always upgrade and improve your house in order to increase its value, but the prime appreciation heavily depends upon the neighborhood and location of your home.

If you wish to know more about this subject and speak with an experienced real estate lawyer, contact the offices of Covert & Covert LLP at (630) 717-2783 and schedule a free consultation session.