Types of Real Estate Deeds

A deed is a legal document that is used to transfer ownership of real property from an owner (grantor) to a buyer (grantee). Most real estate transactions use one of four types of deeds to convey title. There are distinct differences between them, and each type serves its own purpose. Each type of deed includes certain promises, or warrants, that a grantor makes to the Grantee to defend against claims by third parties. If you are involved in a real estate transaction and have questions about a deed or title, an experienced Pennsylvania real estate lawyer can help you understand which type of deed applies in your case and ensure your interests are protected.

General Warranty Deed

This type of deed provides a high degree of protection for the grantor because it contains the broadest range of warrants on behalf of the grantor. A general warranty deed promises that the Grantor owns and/or has a legal right to sell the property, and that it is free and clear of any debts, liens, or encumbrances. In a general warranty deed, the grantor promises to defend against claims against the property “generally.” This means that the seller will defend against a claim of superior rights from anyone and everyone, even if the person or entity claims that their rights supersede the grantor’s.

Special Warranty Deed

This type of deed does not offer as much protection for the buyer. There are only two promises in a special warranty deed – that the seller holds title to the property, and that the property was not encumbered during the seller’s period of ownership. However, a special warranty deed does not guarantee that the property was unencumbered before the seller took ownership. Special warranty deeds are common in cases involving the transfer of property by a trust of estate and in commercial real estate transactions. All real estate deeds must be in writing and are usually prepared by the seller’s real estate attorneys.

Bargain and Sale Deed

With a bargain and sale deed, a buyer gets no protection from encumbrances. It simply states that the owner holds title to the property. If title issues arise at a later date, the buyer would have no legal recourse because a bargain and sale deed does not guarantee good title general warranty and special warranty deeds do. This type of deed is often used in foreclosure actions or tax sales when the history of a property is unknown. Because the grantor is typically a lender or taxing authority in these types of situations, they may not know whether the property ever had encumbrances, liens, or debts against it.

Quitclaim Deed

The uses of a quitclaim deed are very limited, as it does not provide any protection to the grantee or guarantee that the grantor has any interest to convey. It simply transfers ownership from the buyer to the seller. Quitclaim deeds are often used when property is transferred from one spouse to another in a divorce. Presumably, a married couple would acquire the property by general warranty deed so they would already know everything that has happened with it since then. If you are facing a battle over property, your divorce lawyer can advise you on whether a quitclaim deed would be applicable in your case.

Do you need assistance with a property deed or title? Our West Chester real estate attorneys can ensure your rights are protected and all your legal bases are covered.

This blog was originally posted at https://carosella.com/types-of-real-estate-deeds/

Is Buying An Investment Property Worth It?

Investing in real estate is often a winning proposition that can bring in extra income and help you build wealth. However, before you start buying property, it is important to make sure that you are financially ready and willing to put in the work that is often involved in being a landlord. If you are considering purchasing an investment property, it is a good idea to seek the counsel of a real estate transaction lawyer who can help you vet the property and assess whether it is a viable option for supplemental income.

How to Make Investing in Real Estate Worth Your While

Purchase with Cash if You Can

Ideally, if you have cash on hand, using it to buy an investment property makes more sense than financing it. If you decide to take out a commercial loan or mortgage, you must make sure you will be able to afford the payments, even with no rental income. Although rent is a great source of income, it is not always steady. There can be high turnover with renters and unexpected events can lead to having no renters at all.

Take All Expenses Into Account

The cost of owning a home or investment property involves a lot more than a mortgage payment. When looking at a rental property, it is critical to consider the cost of repairs, maintenance, taxes, liability insurance, and utilities. If you are buying a property out of state or are considering using a property management company, add the cost of that in, too. Remember that unexpected expenses can arise at any time, so it is important to sock some money away for emergencies. After you look at the total cost of your expenses, it will be easier to determine how much rent you will need to charge to ensure that you are fully covered each month.

Do Your Research

Whether you are purchasing residential property, a commercial space, or land, it is essential to research the deed and title thoroughly.

A West Chester real estate attorney can do a title search and find out if there are any existing liens or other problems with the property. Another thing you will want to review are comparables in the neighborhood and how much the average cost of rent is in the area. It is also a good idea to look at crime statistics and find out if it may be an up-and-coming community, which can help to maximize your investment if you find a property at a low price. There are other external factors that can affect property values, but it is important to keep in mind that most investments involve a degree of risk.

Start Small

If you want to invest in property but do not have a lot of cash, a good way to start is to purchase a duplex or mixed-use building with a unit you can live in while you rent out the other spaces. That way you are only paying one mortgage, which can allow you to live comfortably and avoid spreading yourself too thin financially. If you decide to purchase a property with renters, a contract lawyer can help you draft leases that ensure your interests are protected and that the rules you put in place are compliant with local and state law.

Are you ready to get started with investing in real estate? Our Pennsylvania real estate lawyers can help.

This blog was originally posted at https://carosella.com/is-buying-an-investment-property-worth-it/

Asset Protection Planning: What is it and why do you need it?

From shielding your property from lawsuits to using trusts as an estate planning tool, there are many different aspects to asset protection planning. Unexpected events can happen to anyone, so being proactive about protecting what you have worked hard for is vital. An experienced business liability lawyer or estate planning attorney can evaluate your specific situation and provide valuable advice on how to best protect your assets.

Why Asset Protection Planning is Important

There are various financial and legal arrangements that can keep your assets safe from creditors, lawsuits, divorce, and in other circumstances. It is important to have an asset protection plan in place before something like a lawsuit happens. If someone has already started an action or there is a judgment against you, moving assets around to avoid paying it may be considered fraudulent.  The same goes for long-term care planning, which is a type of asset protection planning in which you put certain property and assets in trust to keep them from being taken to pay for nursing home care should you need it. Having an asset protection plan in place well before these types of events happen can safeguard your property and financial interests.

Common Types of Asset Protection Planning

Trusts – Placing assets in a trust legally separates you as the owner of the assets, even if you maintain an ownership interest in them. Trusts are often used in estate planning to shield assets from certain types of taxes, to avoid creditors, and when doing Medicaid planning for nursing home care. There are many different types of trusts that serve different purposes. A skilled wills and trusts attorney can determine which will best meet your needs.

Business entities – The legal formation of a business entity can protect some of your assets as well. For example, setting up a Limited Liability Corporation (LLC) can protect your personal assets in most cases.

Tenancy by entirety – If you are married and own property, placing property in a tenancy by entirety means that only one spouse fully owns the property. If there is a judgment against you, the property cannot be touched if it is in tenancy by entirety of the other spouse. It is important to note that this can complicate things in the event of a divorce.

Insurance – Sometimes, asset protection can be as simple as buying the right type and amount of insurance. However, insurance does not completely shield you from liability. For example, a physician may have malpractice insurance and operate their business as an LLC, which provides extra protection for personal assets.

There are other financial and legal tools that can be used for asset protection planning as well. Asset protection planning is not one-size-fits-all – each person’s situation is different, and there is no one course of action that can be applied to all circumstances.

At Carosella & Associates, our experienced legal team works collaboratively to help you develop an asset protection plan that is tailored to meet your individual needs.

This blog was originally posted at https://carosella.com/asset-protection-planning-what-is-it-and-why-do-you-need-it/