If I Go Through Bankruptcy, Can I Keep My Homestead Property?

 

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If I go through bankruptcy, can I keep my homestead property?  The answer is yes, you can.  When you file for bankruptcy, you cannot include your home in the bankruptcy action and if it is a Chapter 7 bankruptcy, you have to then of course keep paying your mortgage payments, the taxes, insurance and your other expenses related to your home.  But yes, you can exclude your homestead property from bankruptcy.

 

Now there are some limitations on exempting your homestead on how long you have lived there as so many days whenever you file bankruptcy.  So you cannot move into the state of Florida one day and then the next month file bankruptcy and protect your homestead property if it has a lot of equity in it.  So hopefully that answers your questions.  I don’t do bankruptcy so if you call me I’ll be glad to refer you to someone who will be able to help you with a bankruptcy if you would like to file a bankruptcy action and save your homestead or keep your homestead from being sold.

 

Give me at call at 727-847-2288.

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Is a Revocable Trust Preferable to a Will?

 

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Is a revocable trust, also known as a living trust, preferable to a will?  Well we need to look at why you’re setting up a trust.  Most people who are setting up trusts are setting up for the purpose of avoiding probate.  So in order to answer the question, first we need to see how your assets are titled.  If you have a husband and wife with a longstanding marriage and you own all your assets in your joint names, as husband and wife, well you do not need a trust and do not suggest you spend the money for it and a Will will do just fine because the assets will pass to the surviving spouse and therefore avoid probate which is the purpose of setting up the trust.  I then suggest you also have a will to cover any assets that might not be titled in the joint names.

 

Now, if you are a single person, we then look at the purpose of setting up the trust and if it’s to avoid probate, probate can be avoided by re-titling your assets such as if you have two children and you have a bank account and you wish the children receive the bank account, you have the account set up in your name payable on death, or called a POD account, to your two children so that when you pass away, the account will go automatically to your two children and avoid probate.  You also can even take care of your real estate such as your home by signing a life estate deed which allows you to retain control of your home and live there during your lifetime but provides that upon your death that it automatically vest in your two children.

 

Now, if you have a particular problem with one of your children, if you do not want them to receive your assets outright such as one that has say a drug addiction or if you have one that has financial problems or federal tax liens or any other basis that they cannot handle money and you want them to receive it over a period of time, then we may want to set up a trust to accomplish that.  Same thing if you have minor children.  If you say, “Well, I don’t want them to receive these assets because they’re under age,” or “I don’t want them to receive it at age 18,” those are all good reasons to set up a trust.  And if you are husband and wife, we can put in your will as a safeguard, a testamentary trust that says if your spouse predeceases you and you don’t get around to addressing it after your spouse dies, then you can set up a trust.

 

So that’s the long answer.  The short answer to this is, why are you setting up a trust?  And so once you define that question, well then we could answer that as to whether or not it’s preferable to a will or not and trusts are more complicated and cost more to prepare.  And most of the time we can re-title your assets to avoid probate and don’t suggest that you set up a revocable trust, a joint trust in any event.  So hopefully that gives you a lawyer answer to whether or not a trust is preferable to a will.  If you have some questions about it, give me a call at 727-847-2288.

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Can a Bank Refuse to Lend Money if the Home Has Radon?

 

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Can a bank refuse to lend money if the home has radon?  The answer to the question is yes.  What they will usually do anytime there is a problem with the property itself; they will require the problem to be fixed, such as, if there is a roof that does not have a useful life.  In order for them to give a loan, they may require that the roof be replaced in order to give the loan.  That would be the same case as far as radon, in that they do not want to lend money if their collateral, which would be the home, would be impaired by any sort of defect, whether it be radon, whether it be a sinkhole, structural problems or not complying with the building code.

 

So the banks would not lend money because a house with radon is certainly not worth as much as one without radon and so it impacts the value of the home.  I might add that in the Pasco County, New Port Richey area of Florida, I have not encountered any properties with radon.  So we do have a radon disclosure, however I haven’t encountered that.  So I can only speak in generalized terms as far as what lenders would do but I can’t imagine a bank lending money if they are aware that there is radon on the property.

 

This is Roland Waller. Give me a call at 727-847-2288 if you have any other questions about buying or selling real estate.

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If I Buy A Mortgage from an Investor, Would It Fall Under The Dodd Frank Act or The Safe Act?

 

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If you buy an existing mortgage from an investor, would the mortgage fall under the Dodd Frank Act or The Safe Act?  Well, first you need to determine whether or not it is an exempt transaction from Dodd Frank and under The Safe Act.  But you have to look at the loan at the time of its inception and do not believe that you would be able to say, “Well I purchased it from an investor and therefore Dodd Frank or The Safe Act does not apply.”  So it is my opinion, that you have to look at the loan at its inception to determine whether or not it is governed by Dodd Frank or The Safe Act and if it is, you are also going to be subject to all the defenses of the borrower and that that’s the purpose of these acts is to protect a person who is buying the home and you will not be insulated as a result of buying these loans from an investor.

 

If you have any other questions, I will try and answer those as far as Dodd Frank since it’s relatively new and there is a thousand-page act and I have not read the whole act, but basically talk about what loans are exempt from Dodd Frank.

 

Give me a call if you have any questions at 727-847-2288. Thank you.

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What Should a First Time Home Buyer Know Before Making an Offer on a Home?

 

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What should a first-time homebuyer know before making an offer on a home?  Well, I don’t know that this is advice for the first-time homebuyers or all homebuyers whenever you are getting ready to purchase a house.  It is called due diligence, and so the first thing you need to do is research the price.  Now how do you go about that?  Well, it takes work and effort, and I suggest that you look at several houses.  The more houses that you look at, whether you like them or not, you then have a sense of the value that you are getting or you are not getting, as far as the price is concerned.  So look at more than one house before you make an offer so you get comfortable with it.

 

I would also, if you are interested in purchasing a particular house in a particular neighborhood, that you ask the Realtor that’s showing you the property if they wouldn’t do a comparative market analysis so that you know how much the other houses are selling for in the neighborhood or have sold for.  That’s called a CMA, and the Realtor should be able to do that by pulling up comparable sales in the neighborhood.  This is the work you need to do as far as the price is concerned.

 

You also need to check into whether or not the property is in a flood zone, particularly if you are going to have financing, and that the flood insurance may – well, it is an extra expense.  If you are in an area that does require flood insurance, it’s going to be an extra cost to you on a monthly basis in your mortgage payment.  If you are paying cash, then you do not need flood insurance ever, then you have to get comfortable with that.

 

You need to have an inspection of the property or have one done to see does the roof leak?  That’s a huge expense, no matter how much the useful life is.  You need to have the air conditioning checked out to see how long is it going to last.  It may be operational, but it may be 15 years old.  It may not be very energy-efficient.  Now all these factors may be factored into the price of the property, but you need to understand whether you are looking at a substantial layout as far as funds are concerned.

 

One of the bigger concerns, particularly in Pasco, Hernando, Hillsborough, and Pinellas areas, is whether or not the property has ever suffered or suffers from a sinkhole, whether the sinkhole has been repaired or not repaired.  With the Realtor that’s handling the transaction, you will see where they will give you a disclosure, and the disclosure should indicate whether or not there has ever been a sinkhole on the property and whether it’s been repaired.  If there is a notation that there has been a sinkhole, you should ask for the soils report and also the engineer’s certificate to ensure that the property has been repaired pursuant to the engineer’s report.

 

You also need to just take note to see who you are purchasing the property from.  If you are purchasing it from an LLC or a corporation or even bank-owned property, you are not going to have any assurances that if there was a nondisclosure of an asset, whether knowingly or unknowingly, you are going to have no recourse since it’s usually an entity and your money has been spent.  So I can’t urge you enough to go through and do the due diligence to make sure that you don’t have a soils report.

 

You also need to ask to get insurance and see if you can get insurance.  You won’t be able to get sinkhole coverage because it’s very expensive, and they do check the property prior to issuing the insurance.

 

All of this has to do with due diligence, which costs you money and you may not be able to recoup that – but also that your home inspector will also tell you about the appliances.  You also need to check with the building department or have someone check to see if there are any open permits.  Also look to see if any improvements have been done without any building permit being pulled.  A prime example is this, if you are looking at property out on the water and it’s an elevated home, if the downstairs has been completed, that’s probably below where the flood plain, and therefore it’s not insurable and could require you in the future to have that removed.  All these items that you need to work on, whether you’re a first-time homebuyer or just a homebuyer.

 

Then you may wish to hire an attorney to review your contract to see if you can build in these protections so that when you do the due diligence that you have a right to terminate the contract.  Also write in as far as your financing is concerned, and also check with a lender to find out how much you are going to be able to borrow.  One of the other things you’ll find is that the financing is also going to be controlled by the lender’s appraisal and they are going to base the loan on the bank’s appraisal, not necessarily on the purchase price.

 

So these are a few of the things that I would suggest any homebuyer, whether it’s first time or not, to look into, and then you may want to hire an attorney to help you, to guide you through this, particularly if you are not in town to be able to do all this due diligence.  So if you need representation or a lawyer to help you, well, give me a call at 727-847-2288.  Thank you.

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