EDITOR'S NOTE: This is an edited transcript of Court TV's Jan 4, 1996 live chat with lawyer Stephen Fuller of Atlanta, Georgia. The subject was "Buying and Selling a Home." About 115 people attended the event, which took place in The Odeon, an America Online auditorium.
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CourtTV9: Welcome to Court TV's chat with lawyer Stephen Fuller of Georgia
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CourtTV9: Tell us a little about yourself, Mr. Fuller.
SFuller672: I am an attorney in Atlanta, Ga. My practice in presently Commercial
transactions and litigation. I have over the years represented many Buyers,
Sellers, Builders, Developers and Lenders in residential real estate in one
of the fastest growing areas of the country. My experience has allowed me
to experience all sides in such transactions seeing all sides. I have agreed to
handle questions in this area primarily focusing on the buyer and seller
Question: What does the term NQA mean?? when looking at house ads???
SFuller672: Non qualifying assumption-meaning the loan is set up allowing an
assumption from the lender without qualification. Be careful and make
sure you assume it properly though.
Question: I am selling a house. It was in my parents name. Dad died and mom
put in my name in 1993. A judgment against my dad was issued in 1994
against my mom and dad's estate for $250K. Will I be able to get clean
title insurance?
SFuller672: It depends on the state. However, it generally takes affirmative
action to set aside the transfer. It will not be easy to insure. I suggest
you get owner's insurance now and start working towards it.
Question: Hi, we have little money for a down payment, what do you think of
lease/purchase plans?
SFuller672: They can be risky especially if you are banking on having more
money in the future. You should make sure the lease purchase is
reviewed by a lawyer and that you can handle the terms of the lease
including the buy at the end. I suggest a non down HUD resale.
Question: Steve, I'm a Realtor. What is the best way for an individual wanting to sell
their home to pick a good Realtor?
SFuller672: Referral from someone you know that used them. That is the case
with hiring any professional, as in lawyers. Realtors are professionals in
their trade.
Question: What are your opinions on how much money to borrow for a house. I
have been told that in the past, one should borrow as much as possible
when the interest rates are relatively low. Do you agree with that
statement?
SFuller672: I am not in finance. I went to law school because I couldn't do
math. Personally, I would keep my loan and pay it off ASAP.
Question: My Dad wants to prepare a quit claim deed for his home in Florida
so that if anything happens to him we can quit claim it to our names right
away. Is this OK to do?
SFuller672: It all depends on the reason of what happens. If it is to avoid
creditors there are many situations where such transfers can be set aside.
Always gift property when times are good.
Question: What do you see are the biggest problems when someone decides to
buy a house?
SFuller672: The structure and the title. Both can be handled by having a
good inspector and buying title insurance.
Question: I am a first time home buyer and would appreciate your advice on
whether I should pay anything at all to a realtor(s) who help me find a
house ?
SFuller672: Generally the realtor will split the commission. Who pays the
commission is determined the contract. EVERYTHING is negotiable.
Question: My boyfriend and I are engaged. We want to purchase a house before
we get married. One of us has a credit problem. Can the one without
the credit problem purchase the house in name?
SFuller672: If you qualify with your income. But be careful if you are not
married and are both contributing. It is best to have something in writing
in case (God forbid) the marriage does not occur.
Question: What do you think about the practice of Transaction Broker?
SFuller672: I don't generally concern myself with why or who except for my
client's end.
Question: If I choose to exercise my right of rescission, do I get back the
loan application fee, and am I responsible for any other charges, i e.,
survey, appraisal, etc.? Thank you
SFuller672: That depends on the state, the contract or if you are relying on
Federal T&L laws. It will be spelled out in your loan application though.
Question: Isn't it true that in many states you don't need a lawyer to help
you buy a house? I used to live in California and I believe real estate
agents there do everything. What does a lawyer do that a real estate
agent can't?
SFuller672 Some areas use escrow agents and the lawyer does not do the
closing. Even where there is a lawyer, he or she is generally presenting
the Bank. I recommend that all parties hire a lawyer to look at their
side. You can hire your own attorney just to look at the documents
without much expense. We do it for our clients for a nominal charge.
Question: I bought a house bathed in lead paint, and I didn't know about it.
What are my responsibilities as a seller to notify prospective buyers?
When should I bring up the topic? Not to mention the lead pipes....
SFuller672: Depending on the state, it could well be a latent defect requiring disclosure
on your part. You really should hire an attorney in your area on that
matter.
Question: I would like info on a tax break for selling . If one spouse is 50
and the other is 45, can we escape the capitol gains tax? Any other helpful
tax breaks?
SFuller672: Honestly there are many ways to escape the tax. It depends on
your actual situation and most accountants can easily crunch the
numbers to get you there.
Question: I am purchasing a new house. What will the appraisal mean. If I
purchase below the appraisal, is that like instant equity?
SFuller672: Unfortunately not really. The market determines the value. The
appraisal is used by the lender to determine their actual risk and that is
really all it means.
Question: Why do banks charge a higher interest rate on a FHA loan?
SFuller672: It is the rate that the FHA is setting that determines. The FHA
guarantees the loan. There are a number of different deals on loans.
Shop like you would for a car.
Question: I am in the process of getting a divorce ... and found a house. The bank
approved the loan on contingency as to when I get the money. What
could I do if the money isn't here when closing comes?
SFuller672: You can extend but all parties need to agree. For the bank it
usually means a new commitment.
Question: Is the VA appraisal fee as well as the application fee considered
part of the closing cost if it is not specifically excluded in the contract?
SFuller672: It depends on the state, but generally those costs are the costs
of the loan that you are obtaining to buy the home and are not necessary
to close. It needs to be specific.
Question: I found a house in October/Dec, put a binder on it. The binder
expired because our buyer failed to get a commitment letter. NOW,
they have the commitment. When we called the realty co. they
said that the house had a first binder on it....did we loose?
SFuller672: Afraid so.
Comment: I'm sorry, I don't understand what you mean by a non-qualifying
assumption. Can you explain further?
SFuller672: No credit or income check. A fee is paid to the lender to
transfer the name. Those kind of loans are rare now.
Comment: What is the purpose of title insurance and must I have it when
buying a pre-existing home?
SFuller672: It protects you if anything is wrong in the chain of title. For
ex. easements not known about. Fraud on behalf on someone down the
chain of title. Even mechanic's liens if you get gap coverage. It is not
necessary, but recommended.
Question: The couple that is selling their house to us now tells us that
their new house will not be ready by settlement, and they want to rent
the house from us for a month or two after settlement. Is this common;
what are my options?
SFuller672: It is not common, but not unusual. Talk to an attorney in your
area, because renters have lots of rights.
Question: If a house does not settle by an agreed date can the seller charge
interest to the buyer ?
SFuller672: Generally the closing date sets a target. But what happens if it
does not occur, should be agreed on in advance in the contract or with a
written extension. Asking for your cost is not wrong.
Comment: Do you recommend always having a lawyer at closing or to look over
the paperwork prior to?
SFuller672: At least prior to. Usually your attorney can call ahead and get
the papers. It is much cheaper for the attorney to look at the papers in
their office instead of attending except for bigger deals.
Question: What variables should we consider when paying additional principal
versus points?
SFuller672: That is financial. First run the numbers and see which is cheaper. Also
see if you can deduct the upfront cost in your tax situation.
Question: Would you consider a lease option to be a safe route to take as far
as legal traps are concerned?
SFuller672: As long as you know what is in the contract and what is expected,
then the legal traps are safe.
Question: How difficult is it to buy a foreclosed property?
SFuller672: Not very. Here in Georgia show up on the first Tuesday with
money in hand and it is yours
Question: How do rent-with-option-to-buy deals usually work and are they a
good idea or not? Thanks.
SFuller672: That is a lease option. They work by paying so much money up
front (or little) that is to be applied to the purchase and with an allowance
of the monthly rental to be applied to the purchase. They are only good if
you know you can do the purchase on the date called for.
Question: Do we need to consult with an attorney if we are purchasing a
"to-be-built" home in a subdivision, where the property is owned by the
builder?
SFuller672: Find someone that can look over the initial contract for you and
to look over the closing papers prior to closing. Most buyers do not do
this and many problems could be avoided if they die. I mean did-sorry.
Question: With escrow money in dispute, what is the best way for a person to
get it back from the Question: realty agent. Presently, the builder in
Georgia wants half of it?
SFuller672: Follow the terms of the contract to the tee as to sending written
notice etc. It should be small enough to sue in Magistrate's court.
Question: What is the best way to get in on a good foreclosure deal in my area?
SFuller672: Find out where the published advertisements are and go look at
the property.
CourtTV9: We've only got a few more minutes. Thanks Mr. Fuller. Any closing
remarks?
SFuller672: Yes Thank you. A home is your biggest purchase. Don't be cheap.
Hire professionals to help you out from referrals. Use people you know.
Get it inspected, by a warranty and buy title insurance. Moving is enough
to worry about without unnecessary problems.
CourtTV9: If you have other comments you'd like to make. Feel free to post them on
