Common Problems with Buying & Selling a Home in Mississippi

The purchase of a home is often the greatest investment a couple will make in their lifetime. Yet there are a series of problems which often occur after the closing of the sale and purchase that could be avoided if the proper process is followed. I call this process the Home Sale Solution©.

The following are problems which can be avoided:

1. Foundation breaks - doors do not shut, walls crack, windows do not close and brick cracks.
2. House is built over subdivision set back lines and too close to the lot line.
3. Termite damage is found after the closing/no termite inspection report at closing.
4. At closing seller’s net proceeds are substantially less than expected.
5. Water gets in house from flooding or heavy rain on a regular basis.
6. Purchaser walks away from (defaults on) contract before closing.
7. Unreleased liens after closing that hinder refinancing.
8. Uncompleted punch list and uncompleted landscaping.
9. Hidden Damage/or damage repair that’s not disclosed.
10. Unpaid Homeowner’s Assessments or special assessments.
11. Mortgage payment increases because of inadequate escrows.
12. No Survey.
13. Property located in a flood zone.

These problems can be avoided. Future Blogs will address this list of problems and their solutions. This process is the Home Sale Solution©.

Non-Traditional Methods of Buying Property in Mississippi - and the Risks

During this time when credit is difficult, Sellers and Buyers often enter into “Contract for Deeds” or “Lease to Purchase.” The desire of the Seller is to avoid having to foreclose on a note and deed of trust if the buyer fails to pay Seller as agreed. The desire of the Buyer is to purchase a home and acquire title upon the payment in full of the contract.

Such arrangements have pitfalls for both Seller and Buyer, but the Buyer is subject to the most risk in this type of transaction. The Buyer must have a written agreement which accurately describes the property being purchased. The Buyer must also record such written agreement in the land records for the county where the property is located. If the Buyer has no written contract and does not record the contract in the proper county, then the Buyer is very likely to lose his investment.

For example, a Seller could sell the property to someone else who is unaware of the original agreement between Seller and Buyer. A Seller could take out a mortgage on the property and such mortgage would be a lien on the property ahead of the Buyer’s claim to the property. Additionally enforcing the contract for deed can also be difficult, even when the agreement is recorded. If the Seller is deceased, the problem of enforcement becomes even more difficult.

Nearly all Buyers would be in a much better legal position if they actually acquired title and gave the Seller a promissory note for the purchase price secured by a deed of trust.

Both Buyer and Seller should consult their own attorney for any type of sale of real property.

To learn more visit our website at http://www.showspowell.com/.

More Mississippi Real Estate Terms - Part 3

Seller's Disclosure Statement - Required disclosure by the Sellers when a licensed real estate agent lists the property for sale and which (supposedly) truthfully indicates the condition of the major components of the home, including the age, type and condition of the structural and mechanical components, the water and sewer/septic systems, and various other matters such as yearly average costs of electricity, taxes, homeowners' dues, etc. It is supposed to give all potential buyers a truthful snapshot of any and all known conditions of the home which a reasonable buyer would want to know. It must be signed by the sellers.

Survey - A map or plat prepared by a land surveyor or engineer showing the boundaries of the property, the location of any structures or other improvements, any easements, encroachments, or set-backs, size of the property, and legal description of the property.

Title Defect - Any defect in the title to real estate which impairs marketability.

Title Insurance - An indemnity contract which can be purchased at closing that insures the policy holder from a financial loss as a result of title defects. It pays the fair market value of any loss that the policyholder suffers as a result of a title defect, and provides the policyholder with attorneys at no cost who will defend the policyholder's title in the event a claim is made against the policyholder for a title defect (even after the policyholder no longer owns the real estate).

No - A difficult, two-letter word that most people have a hard time saying when they absolutely know they should. This word is often the hardest word in the English language to say.

More Mississippi Real Estate Terms (Part 2)

Real Estate Terms to Know – Part 2

Deed - Written instrument conveying title from the seller ("grantor") to the buyer ("grantee").

Deed of Trust - Written instrument from the borrower to the lender granting title to the property to the lender, to hold in trust, to secure the repayment of the debt. Once the loan is paid in full, the deed of trust is normally cancelled of record.

Homeowners' Assessments - The amount of money assessed by the Homeowners' Association to each property owner, usually on an annual basis, which can become a lien on the property if not timely paid.

Homeowners' Association - An association whose membership is composed of all homeowners in a subdivision and which membership is generally required by virtue of owning a home within the subdivision.

Home Inspection - An on-site inspection of the interior and exterior of the home, normally performed by a licensed professional, to evaluate the structural, mechanical and electrical condition of the property.

Pest Inspection - An on-site, visual inspection of the interior and exterior of the home, performed by a state certified consultant, to evaluate the presence of wood destroying insects and/or organisms in readily accessible areas of the home.