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Old 04-09-2018, 09:21 PM
 
24 posts, read 11,196 times
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Later this summer the wife and I are planning to purchase a winter home in an over 55 community in the Phoenix area. I would like to pay cash for this home. I hate to pay interest, but I know next to nothing about covering ourselves so the home does not come back to bite us in the future. I am refering to legal issues mainly.


When you finance does the bank or mortgage company make sure all areas that could casue a future problem are covered? I know there are fees that will be charged for this service, but if everything is handled I would consider paying them. Doing the legwork from 1500 miles away would not be inexpesive either.


I guess what I am asking is what would we need to do to protect ourselves if we pay cash or even finance? I know there is title insurance but little else.


Thanks for any help.
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Old 04-10-2018, 01:34 AM
 
Location: on the wind
4,249 posts, read 1,569,116 times
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?? What sort of legal issues do you mean? Trouble with the property titling or transfer? Some sort of tangle during the actual purchase process? I would think these types of concerns need to be discussed with your title company and the real estate agent. Don't sign the purchase agreement until all the questions are answered.
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Old 04-10-2018, 06:51 AM
 
Location: Cary, NC
31,648 posts, read 55,401,531 times
Reputation: 30194
Quote:
Originally Posted by indianamike View Post
Later this summer the wife and I are planning to purchase a winter home in an over 55 community in the Phoenix area. I would like to pay cash for this home. I hate to pay interest, but I know next to nothing about covering ourselves so the home does not come back to bite us in the future. I am refering to legal issues mainly.


When you finance does the bank or mortgage company make sure all areas that could casue a future problem are covered? I know there are fees that will be charged for this service, but if everything is handled I would consider paying them. Doing the legwork from 1500 miles away would not be inexpesive either.


I guess what I am asking is what would we need to do to protect ourselves if we pay cash or even finance? I know there is title insurance but little else.


Thanks for any help.
Your lender requires the closing title company to do title search and assure that the property title is clean to protect their investment.

You will require the same of the title company for your protection.
It is fundamental to their role, and what they do every day. You should expect as much whether you are paying cash or financing.

Title insurance is backup to that title search.
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Old 04-10-2018, 07:12 AM
 
24 posts, read 11,196 times
Reputation: 49
Quote:
Originally Posted by AllisonHB View Post
?? What sort of legal issues do you mean? Trouble with the property titling or transfer? Some sort of tangle during the actual purchase process? I would think these types of concerns need to be discussed with your title company and the real estate agent. Don't sign the purchase agreement until all the questions are answered.
Title is one issue, liens is another, but I do not know if there are other pitfalls I need to be aware of. I want to go into this purchase with enough knowledge to know what questions to ask to avoid some future problem.
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Old 04-10-2018, 07:13 AM
 
Location: Cary, NC
31,648 posts, read 55,401,531 times
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Quote:
Originally Posted by indianamike View Post
Title is one issue, liens is another, but I do not know if there are other pitfalls I need to be aware of. I want to go into this purchase with enough knowledge to know what questions to ask to avoid some future problem.
Liens are a title issue.

Your contract should require a property unencumbered by liens.
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Old 04-10-2018, 07:15 AM
 
24 posts, read 11,196 times
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Quote:
Originally Posted by MikeJaquish View Post
Your lender requires the closing title company to do title search and assure that the property title is clean to protect their investment.

You will require the same of the title company for your protection.
It is fundamental to their role, and what they do every day. You should expect as much whether you are paying cash or financing.

Title insurance is backup to that title search.
If I pay cash, I will be relying totally on the realtor to make sure all the bases are covered. I just worry that is not the right strategy to avoid future problems.
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Old 04-10-2018, 07:26 AM
 
Location: Cary, NC
31,648 posts, read 55,401,531 times
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Quote:
Originally Posted by indianamike View Post
If I pay cash, I will be relying totally on the realtor to make sure all the bases are covered. I just worry that is not the right strategy to avoid future problems.
Title company.

Your agent is not going to do the title search. Your agent may recommend a title company, but you will have access to the title company to ask questions.
Ask to see the title abstract.
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Old 04-10-2018, 07:41 AM
 
Location: Beautiful Rhode Island
6,309 posts, read 10,484,815 times
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Quote:
Originally Posted by indianamike View Post
If I pay cash, I will be relying totally on the realtor to make sure all the bases are covered. I just worry that is not the right strategy to avoid future problems.
That's why we use an attorney to review all docs.
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Old 04-10-2018, 09:52 AM
 
2,393 posts, read 4,871,642 times
Reputation: 4519
Apart from the obvious (title insurance) I don't know what you are fearing. I recommend you not buy anything until you either understand or resolve your fears.

Some specific comments:

> When you finance does the bank or mortgage company make sure all areas that could casue a future problem are covered?

No, the bank is only concerned that it is highly likely it will be able to sell the mortgage on the secondary market.

> If I pay cash, I will be relying totally on the realtor to make sure all the bases are covered.

The realtor is not responsible for doing your due diligence. You are.

> That's why we use an attorney to review all docs.

Attorneys are rarely used in AZ, although you are welcome to hire one.

* You need to READ the title report, focusing especially on the section labeled "exceptions."

* You need to READ and UNDERSTAND all of the disclosures/ acknowledgments that are part of the closing package.

* You need a good inspection, and you need to know about expansive soils.
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Old 04-10-2018, 12:22 PM
 
24 posts, read 11,196 times
Reputation: 49
Quote:
Originally Posted by rational1 View Post
Apart from the obvious (title insurance) I don't know what you are fearing. I recommend you not buy anything until you either understand or resolve your fears.

Some specific comments:

> When you finance does the bank or mortgage company make sure all areas that could casue a future problem are covered?

No, the bank is only concerned that it is highly likely it will be able to sell the mortgage on the secondary market.

> If I pay cash, I will be relying totally on the realtor to make sure all the bases are covered.

The realtor is not responsible for doing your due diligence. You are.

> That's why we use an attorney to review all docs.

Attorneys are rarely used in AZ, although you are welcome to hire one.

* You need to READ the title report, focusing especially on the section labeled "exceptions."

* You need to READ and UNDERSTAND all of the disclosures/ acknowledgments that are part of the closing package.

* You need a good inspection, and you need to know about expansive soils.
Thanks for the information. Those are questions I need to know when we go looking for a home. Any other suggestions or information I need to know?
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