Thursday, September 21, 2017

Attorney Shannon Wynn: Despite the waning of foreclosures, it is still 'Buyer Beware'

real estate foreclosure buying

There are two particular situations when we encourage Wynn at Law, LLC real estate clients to do as much home-buying due diligence as possible: Foreclosures and Relocations.

  • Foreclosures: We don't hear about as many foreclosures as we did at the start of the decade, but they're still out there in Southeast Wisconsin. Walworth County – at 1 home in 2,060 in foreclosure – is below the state average (1 in 2,700) and sandwiched between one of the busiest counties for August 2017 foreclosure activity (Rock Co., 1 in 1,334) and one of the lightest (Racine Co., 1 in 4,105). That data is from realtytrac.com, and indicates that Elkhorn and Walworth communities currently have the highest foreclosure ratios in Walworth Co.

  • Relocations, or RELOs: As both the job and real estate markets continue to improve, workers are on the move again. When you see 'RELO documents required' in a description of a property, you will have paper work from a relocation company to sign. This usually means the home is an inventory home of a relocation company that has bought out the relocated seller. Corporations use relocation companies to get their employees to their new destinations ASAP. These corporations contract with RELO companies – or sometimes a RELO department within a large realty firm – to buy these homes and turn around and resell them. Just like the bank owning a foreclosed home, a RELO company doesn't know the property the way a private seller does.

In either case of buying, you should have an attorney on board as early as possible in the home-buying process (see related article). You should inspect the property top to bottom (another previous article), see it in multiple lights, and do your best to glean as much information as you can from public records.

Also, be aware that even though the RELO company and a bank foreclosing on a home have a vested interest in getting a property sold, they may or may not be more flexible on price, depending on the market. One such situation is the seller's market we're in. Another, in a RELO context, is if the RELO firm guaranteed a buyout of the home – a GBO. An attorney can be a strong negotiator in your corner, regardless of the market or status of the property.

 


*The content and material in this original post is for informational purposes only and does not constitute legal advice.  

Photo by Andy Dean, used with permission.

Thursday, September 7, 2017

Attorney Shannon Wynn: Skipping the real estate inspection can be costly


home inspection, walworth county
Wynn at Law, LLC knows the cost of a real estate inspection may seem a little bit steep with all the other closing expenses to bear, but it's well worth it in the end. The cost will vary based on the size of the house, but between $300 and $500 is a good estimate in Walworth County. If these inspections aren't done, issues with the house might crop up later and end up costing thousands in repairs.

Many buyers of spec homes or brand-new construction especially feel the urge to skip the inspection. What really can go wrong with a new house? A lot. If a builder or seller offers a discounted price or cash back for skipping the home inspection, walk. A home inspection takes a couple hours: That's hardly an inconvenience to the seller. There is no reason to persuade buyers against it... unless there are critical issues with the home. For example, the homeowner may have been a “Do It Yourselfer” who did improvements him/herself to cut costs, or a builder could have cut corners to finish on schedule.

If you're really set on purchasing a home, you absolutely need to take measures to ensure it's safe. Safety is the primary reason three out of four home buyers have an inspection before finalizing the purchase according to the National Association of Realtors. The fact that three out of four buyers will have an inspection is a good reason sellers should have one, too, before they even list the property. This way, you can spend time remedying any issues that need to be immediately fixed for the next owners of your home. An inspection also gives you back-up in case the buyer's inspection turns up something entirely unexpected.

Here are three tips:

·         Hire a home inspector that has many years of experience and the proper certifications and licenses.

·         You also want an inspector that is thorough and will go into the attic, through the basement, and on the roof.

·         Go along. Some inspectors are happy with you following them around asking questions, while others want to do a thorough search first, and then a walk through with you. You are paying for his or her time, so ask for the tour from the inspector's view.

Real estate transactions are exciting for both buyer and seller. When you're caught up in that excitement – and the probability that there is also another buying or selling transaction in which you're involved – it can make you forget to take the necessary precautions. The inspection is one such precaution. Buyer or seller, it's your safety net.

 


*The content and material in this original post is for informational purposes only and does not constitute legal advice.  

Photo by Ian Allenden, used with permission.

 

Thursday, August 24, 2017

Attorney Shannon Wynn: Remember the safe deposit box

estate planning, walworth county

Estate planning clients often give much thought to avoiding probate (see related article). Wynn at Law LLC helps jog your memory to make certain you haven't 'forgotten' an asset that would trigger probate. A common one forgotten, as an example, is the safe deposit box. Yes, banks still have them in the vault. In fact, it's a common storage place for the Last Will and Testament. Why not? It's safer than a home safe, and someone always has a key. But what else is in there?

Wisconsin allows an ‘interested party’ to access the safe deposit box to retrieve the Will. On the death of a sole owner of a safe deposit box, a safe deposit box company (bank) allows 'limited' access to the box by the spouse or next of kin of the deceased lessee, a court clerk, or other interested person for the only purpose of looking for a Will. The assets also in the box are not to be touched. While that interested party is in the box, he or she is supervised to make sure that doesn't happen. If the Will itself doesn't name anyone to the receive the safe deposit box assets, probate may be necessary.

A strategy to consider is naming an adult child or family member or friend as a joint owner of the safe deposit box, with a key. This alleviates the problem of having a sole owner of a box pass away. Then the Will can be retrieved and so can the assets without going through probate. (Note: There could be tax considerations when the joint owner takes possession, it only avoids probate because the joint owner of the box is considered joint owner of the asset.)

By the way, if there is a sole owner, whomever is the 'interested party' is may have to furnish proof of death as it deems necessary (e.g., the death certificate of the owner). That could delay things as well. With a joint owner who is a keyholder, they have access anytime. This could be a time-saver in the case of a loved one's passing. Just remember, that joint owner will also have access to the safe deposit box contents while the loved one is living, too.

 


*The content and material in this original post is for informational purposes only and does not constitute legal advice.  
Photo by Arman Zhenikeyev, used with permission.

Thursday, August 17, 2017

Attorney Shannon Wynn: Home builder contracts should reflect your interests

home building contracts, contractors, real estate lawyer


Touring builders' model homes can be intoxicating. They're so flawless with very feature you've imagined into your dream home. Wynn at Law LLC knows the exhilaration because we've been on the same tours of spec properties. Before you rush into the builder's agreement – which undoubtedly will reflect their best interests first – here are some areas you want to make sure are developed to your liking in the contract.

·         The building: Permits are required. Labor has to be furnished. Maybe pieces are subcontracted out. Obviously materials and plans are parts of the construction. Make certain the contract specifies the work that needs to be executed from the lot up to the last closet hinge. Remember lien waivers, too… see our previous article on them.

·         The timeline: Disputes with builders usually heat up over the deadline. Your move-in date means the world to you and your lender. What matters to the builder is accommodating inspections (delays), weather (delays), employee issues (delays) and arrival of materials (delays). A firm contract specifies a start date, move-in date, and provisions for reasonable extensions.

·         The payment terms: Another potential source of disputes (delays) is the payment. Typically there is a down payment and payments at regular intervals. A clear contract specifies the dates, amounts, and the form of payment they'll accept as well as where they'll accept it.

·         The warranties: In a sale of an existing home, defects are identified outright. In a new home construction, builders instead offer a warranty. That warranty usually spells out what is NOT covered (exclusions) rather than what IS covered (inclusions). Wynn at Law LLC reviews the home warranty promise and helps you get the most of it.

If you make the decision to build, rather than buy, your dream home, hiring a real estate attorney will ensure a contract favors your family, not the developer, and protects your investment. Usually, a builder presents a standard contract for your approval. If the contract appears overly simple or unnecessarily complex, there’s an excellent chance that the contract does not serve your best interests. Don’t be afraid to let us negotiate! Your home is on the line.

 


*The content and material in this original post is for informational purposes only and does not constitute legal advice.  

Photo by Andrea De Martin, used with permission.
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Thursday, August 10, 2017

Attorney Shannon Wynn: Transfer on Death Deeds eliminate probate

transfer on death deed, estate planning


When any of Wynn at Law LLC's clients own real property in Wisconsin, we look at a Transfer on Death Deed (commonly called a TOD Deed or a TODD) to see if it is a suitable fit for their estate plan. It can sometimes wipe out the need to go to probate court, which is a time and cost saver.

As our earlier article pointed out, if you have $50,000 or more in probate assets, probate court comes into play when distributing assets. Probate assets are all assets NOT automatically transferred to another person when the owner passes. Life insurance proceeds, for example, skip probate because a beneficiary is identified. So, if assets can avoid probate, why not place a TODD on an asset like a vacation home to transfer it directly to beneficiaries, such as the kids?

The answer in some cases is that if you need to protect assets – for or from your children – you might not want to transfer them on your death. For the minor kids, you might want to transfer the asset to a trustee for their benefit until they're older. In the case of adult children who may have creditor problems or a looming divorce, you might again want a trustee instead of transferring the property to them directly. Otherwise, a TODD making assets 'unprobatable' is an alternative for every Wynn at Law LLC client because the property doesn't need to be owned free-and-clear. You can have a mortgage, a second mortgage, even a line of credit against the property and still use the TODD to pass it on… and skip probate.

Let's say you had a car and some bank assets totaling $49,995 and a $89,000 getaway cabin up north. All in, the assets would require probate, but if a TODD was placed on the cabin, the cabin passes to your heirs (they still get the debt if it was mortgaged, by the way) and the rest of the estate would avoid probate because it's under the $50,000 limit.

Your accountant, or your beneficiary’s, will point out that there may be tax benefits to this strategy as well, because the transfer isn't considered a 'gift' subject to gift tax. The TODD may also reduce or eliminate capital gains taxes if and when the property is sold by the beneficiary.

Even if you have the Transfer on Death Deed, you can still choose to sell a property while you're living: It's yours! The TODD designation does not give the beneficiary 'ownership' of the property while you're alive… if the document is drafted properly. Call an attorney.

 


*The content and material in this original post is for informational purposes only and does not constitute legal advice.  

Photo by Ekaterina Kondratova, used with permission.

Thursday, August 3, 2017

Attorney Shannon Wynn: Flipping real estate advice for buyers, sellers, and speculators


flip, flipping, real estate
 
Wynn at Law LLC has noticed a recent resurgence of real estate 'flipping.' Late-night cable and radio stations are again saturated with ads touting the wild income potential of acquiring and liquidating the same piece of property within the shortest possible time frame. Flipping is legal – as long as it's done on the up and up.
Before the housing collapse a decade ago, some curbs were put in place to deter flipping. The FHA sets the rules by which most lenders follow: Having 3.5 percent as a down payment for example. In 2005, the FHA required additional inspections and safeguards taken on mortgages applied for on properties that have been owned for less than 180 days, and outright forbidding the approval of mortgages on properties owned for less than 90 days. Those rules were relaxed in 2010 following the real estate market bust wiping out $7 trillion in property value.
More importantly, that lost value represented the largest investment loss for many families… and did not involve as many people flipping houses. With that in mind, most lenders still adhere to the 90-day guideline.
If you're buying a flipped home, there are still numerous loopholes and unregulated areas that an unethical or inattentive flipper can exploit when flipping a house. It still remains up to the buyer and his or her attorney to perform all the necessary due diligence before buying. If the property is to be purchased with an FHA-backed loan, a flipped home may require more time to purchase because of the additional documentation required of the seller.
If you're interested in flipping, avoid the late-night infomercials blaring about how you can flip a home without putting in a dime of your own. Banks have extremely tight restrictions to watch for fraud. It's best to have cash on hand for this highly speculative form of investment: Cash you're able to part with (and potentially not recoup) for at least 90 days. A quickly-flipped home requires documentation on renovations, as well as additional appraisals, to justify a much higher resale price if the deal involves an FHA-insured loan. The average flipping time from purchase to resale is just over 106 days, according to market monitor RealtyTrac. Know this as well: Some properties have to become rentals before the flipper is able to get from the market what he or she thinks is the 'value' of the property. Are you prepared, legally, to become a landlord?
In the case of flipping, it's the old adage at play whether you're buying a flipped home or flipping one yourself… If it sounds too good to be true, it probably is. Get an attorney.

 

*The content and material in this original post is for informational purposes only and does not constitute legal advice.  

Photo by Victor Zastolskiy, used with permission.

Thursday, July 27, 2017

Attorney Shannon Wynn: The power of advanced directives

living will, POA, advanced directive

There are dozens of intersections in life that call for an attorney's insight. Wynn at Law LLC gladly steps in to advise clients who have reached those intersections, like bankruptcy or buying a home. One of the most emotionally taxing of the intersections is how to handle the decisions at the end of a life, whether it's sudden or the result of a long-term illness. Planning ahead, before you reach this inevitable intersection, can make the situation more bearable, or at least manageable.

In one of our earlier articles, we talked about the Last Will and Testament -- a crucial part of estate planning after someone passes. A Living Will is a legal document that sets out a person's healthcare wishes in the event they cannot articulate the wishes. A Healthcare Power of Attorney (POA) is a separate alternative. The Living Will has your instructions -- what you will and will not permit. The POA designates an 'agent' to make the decisions. Usually, the agent is a spouse, but can be a close friend. No matter who you choose, you have to let that agent know your wishes clearly.

The POA is even more powerful when it goes beyond healthcare decisions to include financial decisions as well. This Durable POA ensures the person making the healthcare calls has the money to pay for the procedures. The signer gets to choose how limited in scope the POA is: For example, it can be limited to using bank accounts only and not things like selling the house.

Where Wynn at Law LLC adds value with such a POA is that the document and our Firm can be – if needed – the go-between if things get charged up among family members or family and caregivers. Things like resuscitation, painkillers, tube feeding, and organ donation can be powderkeg issues when they're not backed up by a Living Will or a POA.

'Why would you create a Durable POA over creating a Living Will?' is a common question. The answer is simple: The POA agent can represent your thoughts on things for which you didn't foresee in drafting a Living Will. You can't plan for everything in writing in a Living Will, and the bills don't stop just because a person is hospitalized. When you and your family come upon this intersection in life, these estate planning tools help keep the focus on the care you would have chosen and nobody has to guess.

*The content and material in this original post is for informational purposes only and does not constitute legal advice.  

Photo by Viktor Levi, used with permission.