Why closings cannot happen on federal holidays

Happy Thanksgiving everyone! Today's post will be short and sweet - I sometimes get the question about why a closing cannot occur on a federal holiday. The answer is that the banks and lenders (generally speaking) close on most federal holidays. Sometimes on the less celebrated holidays, lenders remain open, but even if they are running business as usual, funds will not be received unless the banks are open to send and receive wires. In some very rare cases, lenders may send funds early, but in general that doesn't really happen. 

So if the banks are closed, and you are financing your purchase with a mortgage, then chances are your closing will not happen. You should plan accordingly around such bank closures. 

Happy Thanksgiving, and I hope that everyone out there is planning for a nice and warm evening with friends and family. Safe shopping as well!

The different ways to hold title to real property

When purchasing real property, there are various way one can obtain title to that property. Probably the most important aspect of each type of tenancy is whether or not the right of survivorship exists. If it does exist, then the title to the property automatically passes to the other party(s) if someone on title passes away. That means that the remaining title holders need not do anything - they will obtain title automatically without going through court or other legal proceedings. 

If you are a married couple, you can take title as Tenants-by-the-entirety which has the right of survivorship. So if one spouse passes, the other will automatically become 100% title owner upon their death. While both live, there is no separation of ownership in terms of percentages. You would both own the land equally, and the property cannot be sold or transferred without the consent of the other spouse. 

If you are unmarried, you can take title as Joint Tenants or as Tenants-in-Common.  Joint tenancy has the right to survivorship and is very much like Tenants-by-the-entirety in that there is no separation of ownership. Every joint tenant owns the property equally and fully, and the property cannot be sold or transferred without the consent of the others. If there is an attempt to transfer ownership without everyone's consent, then the joint tenancy is broken and all title owners then become tenants-in-common. And as is with tenants-by-the-entirety, when one joint tenant passes away, title automatically passes to the remaining joint tenants. The only caveat with Joint Tenancy (as opposed to Tenants-in-Common) is that all the title owners who wish to hold title as joint tenants must obtain title at the very same time (i.e. when it is purchased, for example). Tenants-in-Common do not have the right of survivorship and can be divided up into very specific percentages amongst the title owners. When one of the tenants-in-common passes away, their interest does not pass to the other title owners, but passes to that person's heirs. 

The right of survivorship allows one to avoid probate proceedings (the court proceedings required when one dies without a valid will). So even without a will, title to real property can be passed on to your heirs without putting them through the lengthy and costly aspects of probate legal proceedings. You would just need to add them to the deed of the property, which often can be a very simple process. 

If you have any questions about the different tenancies, or have the need to add or remove someone from title, then please feel free to message me for further information. 

Have a great weekend everyone!

Motivational Monday - Learning from a billionaire that invests in People!

Happy Monday Everyone!  

For this week, I am continuing with last week's theme of getting inspired by the Sharks of Shark Tank.  Here are a few words of wisdom and encouragement from Mark Cuban, billionaire businessman and investor, owner of Dallas Mavericks, Landmark Theatres and Magnolia Pictures.

Have a productive and successful week!

Sources: YouTube, Wikipedia.

Short Sales

A short sale is when a homeowner's lender agrees to accept less than what is owed, in lieu of going through foreclosure, and will release the lien they have on the property. 

For buyers, though short sales can take a lot of time and patience, the payoff can be well worth it if you aren't under any time constraints with your purchase. What typically happens is that after a sales contract is signed, a copy of that signed contract gets forwarded to the seller's lender for approval. They will also ask that all parties sign an affidavit stating that the purchase/sale is an arms-length transaction. That means that the parties are not related in any way, nor have any other relationship that would otherwise invalidate the short sale. In other words, there can be no prior arrangement or agreement to purchase the property in order for the seller to "get away" with paying less than what is owed to the lender. And as I mentioned above, the short sale process can be lengthy - sometimes taking months to complete. And in some situations, after a long wait, it is possible for the short sale to fall through. But if successful, the outcome is the opportunity to purchase a home for significantly less than what the home is valued at.

For sellers, you will be able to sell your home without the need to bring money to closing just to sell it. Your lender will require that absolutely no funds are given to you as a result of the sale - every extra penny must go to them. But the drawback to a short sale is that it will take a hit on your credit. From what I understand, it may stay on your credit report for up to seven years. I have closed a few sales where sellers ended up bringing a very significant amount of money to closing, in order to avoid those consequences. But there are a few requirements that you must meet in order to qualify for a short sale approval - just know that the lender will do their due diligence to ensure that you are actually in a position to need a short sale. Every lender has their own specific requirements, but for starters, they will ask for copies of financial documents to verify your inability to pay what is owed to them. 

But all-in-all, a short sale can be a winning solution for everyone involved. It might not be the right solution for a seller or buyer, but if the pieces fit, then a seller has the chance to unload a debt they can no longer afford, and a buyer has the chance to purchase a fabulous home for a fraction of the value. 

Please feel free to message me if you have questions about short sales, and as always, if you have any questions about closings in general. Have a great weekend everyone!

Motivational Monday - Do you fail well?

My motivation for this week is to learn to fail well.  We all try to do our best and aim high, but when we fail, do we know to get back up and keep going?  Or do we sulk, make up excuses, and give up?

Here is what one of my favorite sharks, Barbara Corcoran, has to say about failing well.

Have a great Monday and a successful week ahead!  

Let's Fail Well!