Category Archive: Real Estate

  1. Transfers of Real Estate on Death

    One of the frequent questions that we receive here at Clymer, Musser & Sarno concerns the transfer of Real Estate immediately subsequent to the death of a parent.

    Often individuals assume that because they lived with their parents or provided services to them prior to their death that the real estate will or should vest in their name, almost by default. The reality of the situation, however, is more complicated than the assumption.

    When a parent dies, the manner in which their belongings pass to their children or heirs can be fairly divided into three categories, which will be addressed below.

    1. Through Operation of Law

    Real Estate passes through the operation of law, when an individual holds recorded legal title to the property in conjunction with the decedent and that co-ownership contains a right of survivorship. In this instance, the property does automatically and immediately transfer to the survivor as indicated in the deed to the real estate.

    2. Through Contract

    The list would not be complete without mention of this method, but it applicability to Real Estate is limited at best. The types of assets that rely on this method of transfer include Life Insurance Policies, Pay on Death Designations, and Annuities.

    3. Through Probate

    Transfer of Real Estate through Probate process is the most common manner in which real estate is transferred upon the death of one’s parents. The Probate process, while relatively simple in Pennsylvania, does have a number of steps and items that need to be completed to properly open and estate, transfer the real estate, and then close the estate.

    To open the estate, there must be an administrator or executor appointed by the Register of Wills. If there is a Last Will and Testament in existence, then the individual named as the Executor can take the original Will, along with the death certificate, and a Petition to the Register of Wills and be appointed as the Executor. If there is no Last Will and Testament in existence, then Pennsylvania has a statutory procedure that dictates who may serve as the Administrator.

    Real Estate and Estate Planning Attorneys in Lancaster, PA

    If any of these situations describe what you are currently facing, contact us today as we would love to help and give you more detail on the processes by which you can deal with any of these situations. Or if you are concerned about ensuring your real estate is properly passed to your family, schedule an estate planning consultation.

  2. The Ins and Outs of US Marshal Sales

    The US Marshals provide open auctions for seized assets and forfeited property, including real estate. Like with a Sheriff’s Sale, proper precaution must be taken when purchasing property at auction. When done with caution, you can purchase an investment property at a significantly reduced price.

    Read this guide to learn more about US Marshals auctions and what to expect.

    What is a Marshals Real Estate Auction?

    The US Marshal serves as the “armed wing” of the US Federal Court system. Just as the sheriff enforces orders for the Court of Common Pleas and the constable enforces orders from the Magisterial District Judges, so the Marshal enforces court orders for the Federal Courts. Here in Pennsylvania, we have three federal districts, the Eastern, Middle, and Western District, with each district having its own Marshal. Lancaster County is in the Eastern District, while interestingly enough, Lebanon County is in the Middle District.

    As far as real estate is concerned, the Marshal sells real estate at US Marshals sale. Practically speaking the vast majority of real estate sold by the Marshal is from foreclosures brought by the USA through the USDA direct lending program. A list of properties, along with the minimum bid, are advertised on the USDA website and in the legal classified section of the local newspapers. The ads in the papers are easy to miss so monitoring the website should be a priority. The link to the website is here

    3 Difference Between Sheriff & Marshal Sales

    Marshal sales are like Sheriff’s sales in that junior liens are wiped out, but are different in several important respects. The Marshal does not pay water, sewer or trash; you will need to contact the provider at least a couple of days ahead of the sale. Often you will need to fax requests and/or send payment to the provider. Getting this information at the last minute can be problematic. Second, the Marshal does not pay delinquent or current years real estate taxes.  Thirdly, a federal judge need to confirm the sale prior to the deed being issued. Confirmation can take months. A recent sale we were involved in took seven months to confirm. A common issue is that taxes and utilities continue while waiting for confirmation. It is up to you to decide if you want to pay them in discount while waiting for confirmation or let them go into penalty/lien status until you receive the deed.

    Additional Details about a US Marshals Sale

    The Marshal does not record the deed. You will receive the original deed in mail. It is up to you to record the deed at the county recorder of deeds office and pay the transfer tax. It is important to record the quick immediately because the 91-day FHA anti-flipping timeframe begins when the deed is recorded, not when the sale occurred.

    In the past the USDA did not winterize the properties or manage them in any way. Generally, investors were able to get in the properties and work on them while waiting for confirmation. Recently however, a property management company contacted the successful buyer after the sale to find out who was occupying the property. The management company backed off when they were advised that the former owner had surrendered possession of the property to the investor. That said, we don’t know if the USDA is now managing some or all of the properties it is foreclosing on.

    If you buy an occupied property, you are going to need to wait until you receive the deed prior to filing for ejectment, just like a sheriff sale property. The ejectment can be brought in the Court of Common Pleas, not in federal court.

    The terms of sale are normally 10% down by certified check and the balance due within 10 days of confirmation. There is an interesting issue regarding transfer tax. Call us if you want to discuss transfer tax issues.

    Questions about Marshal Sales?

    If you have specific questions about purchasing property at a US Marshals Sale, contact the real estate attorneys at Clymer, Musser & Sarno. Another helpful source is Jillian Hill, a paralegal at KML Law Group in Philadelphia, who seems to be in charge of all US Marshal sale in the Eastern and Middle Districts of Pennsylvania.

     

  3. 6 Tips for Avoiding Pitfalls at a Sheriff’s Sale

    Here in Lancaster County, there are several ways to get started in real estate investing. One popular way is to purchase a property at a Sheriff’s Sale or Tax Sale. Whether it is the sheriff’s sale, judicial tax sale, or upset tax sale you may be able to obtain an investment property at a significantly reduced price. Yet, if you go to your first auction unprepared, you can spend too much on a property or worse – buy one with hidden structural or significant title issues.

    To get started in investing in foreclosure and tax sale properties, you will want to avoid common pitfalls in the auction process. Before you start buying properties at a sheriff’s sale, judicial tax sale, or upset tax sale, read through these 6 tips to help potential investors like you:

    Guide to Buying Real Estate at a Sheriff’s Sale

    1. Investigate the property.

    Do your research on your desired property. Know where it is, whether someone currently lives in it, and the general condition of the property.

    2. Get practice.

    If you have time, consider going to a sheriff’s sale as an observer. That way, you can get a feel for the flow, the process, and what is required of bidders. Then when you are ready to bid on a property, you are experienced at the auction format.

    3. Be prepared for surprises.

    Unlike other methods of real estate transactions, properties sold at sheriff’s sales, judicial tax sales, and the upset tax sales are sold as-is. There will not likely be an opportunity for an inspection or walk through of the property. You may find that the property was left in a poor condition, sustained structural damage, or have other hidden issues, and you won’t know any of this before the auction.

    4. Consider existing residents.

    If there are residents currently occupying the property, you inherit these residents and their removal may require you to bring a separate civil action in ejectment.

    5. Bring cash, certified check, or an attorney’s escrow check.

    Lancaster County’s sheriff sale requires a 20% down payment the day of the auction, and only takes cash, a certified check, or an attorney’s escrow check which must be payable to the Sheriff of Lancaster County. For upset tax sales and judicial tax sales, the Tax Claim Bureau does accept money orders as well as cash, a certified check, or an attorney’s escrow check, but they require full payment the day of the auction.

    6. Hire an experienced attorney.

    Since properties are sold as-is, there is no guarantee that the property has a clean title. In addition to the bank holding the mortgage, there may be additional judgments, liens, and other claimants to the property’s title. If you find a property you like, it would be wise to hire an experienced attorney, who can perform a title search, let you know of additional liens, and give you legal advice as to handling these issues. It is important to note that the upset tax sale does not divest junior lien holders.

  4. Things Your Lawyer Wished You Knew When Buying a House

    Purchasing a home is not only a great investment, it is a time-honored tradition here in America. Your new home will provide you and your family with years of enjoyment and memories, all the while you are building up equity as you make payments and the property increases in value.

    Yet at the same time, purchasing your first house is daunting and scary. It is likely the most expensive purchase you’ll ever make, and you are locking yourself into a financial commitment for the next 15-30 years.

    As you embark on the journey towards home ownership, here is some advice a real estate attorney would like you to consider.

    4 Home Buying Tips from A Real Estate Attorney

    1. Find a reliable partner.

    Sometimes potential buyers assume that the seller’s real estate agent is looking out for you. While they may be motivated to get you to buy the home, they are legally bound only to the selling party. Find a reliable buyer’s agent to ensure your best interests are represented at the table. If you don’t want to go with a realtor, consider having a real estate lawyer review your agreement before signing.

    2. Shop around for financing.

    If you need to finance your home, be sure to shop around. Different banks and mortgage companies have various rates, charges, and fees associated with their mortgage. Don’t be afraid to ask what the fees are for and why they are there. Your potential lender is required to provide information about these fees, but sometimes it takes effort to dissect and understand what they are.

    3. Save money by paying extra each month.

    By paying a few more dollars each month on top of your mortgage payment, you can pay less towards interest and shorten the term of your mortgage, often by several years!

    4. Title Insurance is worth the expense.

    If you are taking out a mortgage for your home, your lender will likely require title insurance. But if you are purchasing a home outright, still consider title insurance. For a small, one-time premium, you can save yourself headache and heartache from any title defects.

  5. Title Insurance: Why It Matters & Why You Need It

    When you are purchasing a home or property here in PA, you’ll see among the dozens of fees and charges something called Title Insurance. This one-time premium generates a lot of questions and confusion, with people often wondering if it is necessary.

    What is Title Insurance?

    Like other types of insurance, like homeowners’ or automobile insurance, title insurance offers protection against the unforeseen. Title insurance covers the property’s title and deed, protecting you from claims against the title and ensuring you have good title.

    There are two types of title insurance: lender’s policy and owner’s policy. A lender’s policy is held by your bank or mortgage company to protect their interest in your home. In addition to the policy taken out for the bank, an owner’s policy protects you, the purchaser, from a defective title.

    Potential Title Defects

    Here in Pennsylvania, conveyance of real estate is usually done with a special warranty deed. This means that during a sale, the seller is only guaranteeing the title against defects during their ownership. This does not necessarily guarantee a clean title, as defects or claims to the property could have occurred prior to sale or without their knowledge. This can include:

    • Mortgage on the property
    • Judgment or tax lien on the property
    • Right of way
    • Unauthorized sale
    • Fraud

    While most of these issues should come up in a title search, on occasion they can be missed by the search or appear after you purchase the property. Title insurance protects the buyer from these types of claims.

    Do I Need Title Insurance in PA?

    If you are using financing to purchase your property, your lender will likely require you to take out title insurance on their behalf. If you are paying for your home with cash, the choice is yours whether you take out title insurance or not.

    While it might not be required, taking out title insurance for your new PA home makes good sense. Like any other insurance, the true value is in the protection against the unexpected or unknown in what, for many, may be the largest purchase of their lifetime. If there ever is a claim against your title, the insurance kicks in and will cover all legal fees and costs for defending the title and making it clean. For most homeowners, this assurance is well worth the premium.

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