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Real Estate Q&A

Disclaimer: The following information is provided for general educational purposes only.  This does not constitute specific legal advice and each family and client's situation is unique.  In reviewing this information, no attorney-client relationship exists between the Law Offices of Scott G. Hoh and the reader.  Our firm only officially represents clients when a signed client engagement letter is in place.  No one else may rely on this information or claim that in reviewing this general information, an attorney-client relationship exists between the reader and our law firm.  Obviously, the internet, websites, blogs, robots, and internet legal companies are not a substitute for a properly licensed attorney.  Accordingly, this information is for general informational purposes only.

I WOULD LIKE TO SELL MY HOUSE, CAN THE LAW OFFICES OF SCOTT G. HOH HELP ME?

The Law Offices of Scott G. Hoh specializes in all things real estate. Our office can handle all facets of a real estate closing. As discussed below, sometimes it makes sense to work with a qualified realtor to sell a home, and we enjoy working with realtors to help resolve problems so that a closing can occur. In other instances, our office can handle the entire sale without paying a real estate broker commission. We typically charge a 1% fee for real estate closings.

DO I NEED A REALTOR OR BROKER IN ORDER TO SELL MY PROPERTY?

The answer is sometimes yes, sometimes no – it depends on the circumstances. As described above, the Law Offices of Scott G. Hoh can handle all aspects of a real estate transaction and can conduct the closing in the event no title insurance company is holding the closing. However, we also love working with great Realtors who work very hard at what they do. Brokers have the ability to market a property to a wider audience and list a property on the Multiple Listing Service (MLS). The MLS platform is the best way to get a property in front of the most serious and qualified buyers. As a law firm, we do not market properties and we are not a real estate brokerage with access to the MLS. If a buyer is identified or if a Seller wants to try to market a property on their own for a few months, we can handle all other aspects of the sale. If the goal is to market a property to the widest audience possible, paying the 6% commission (3% to the Seller's Agent & 3% to the Buyer's Agent), is usually money well spent.

IS IT A GOOD IDEA TO PUT MY HOME IN THE NAMES OF MY CHILDREN?

Again, the answer is, sometimes yes, sometimes no. When we meet with older clients, our job is to evaluate a family's financial circumstances and to make sure there are sufficient assets to fund a retirement plan. In the event a family member will move to an assisted living facility, the sale of the primary residence is often applied to the entrance fee. On the other hand, sometimes it makes sense to add children to a deed. We recommend a deed structured as Joint Tenants with the Right of Survivorship (JTWRS). The house is transferred during the lifetime, so the children are already owners of the home, which will negate some, but not all, inheritance and real estate transfer tax considerations. Each family circumstance is unique, and a one-size-fits-all approach does not work well for real estate transfers.

IS A REVERSE MORTGAGE A GOOD IDEA?

Again, the answer is, sometimes yes, sometimes no. Reverse mortgages have gotten a bad reputation and have detractors, but in some instances, these can work well. This is a loan program approved under federal law, a person can receive the funds for their home. Unlike other home equity or mortgage loans, the party does not have to make a monthly loan payment. If someone has a valuable home that is paid off or has significant equity, the reverse mortgage can provide a new source of retirement funds. The downside of a reverse mortgage is a bank cannot lend 100% of the value of the equity, the bank will typically only lend 70% of the equity, which ties up funds in the unused equity in the house. The borrower remains as the property owner and still must pay utility, maintenance, and tax costs. At the time the homeowner exits the property (either through death or moving elsewhere), the reverse mortgage amount must either be repaid, or the Bank will then sell the property to recoup the loan. The home can be passed on and inherited, but the reverse mortgage loan must be repaid. If the goal is to have increased funds for retirement planning, a reverse mortgage can make sense. If the goal is to pass a property on as an inherited asset or to have the flexibility of using a home as an asset when entering a nursing home, then a reverse mortgage is not the right tool.

IS AN INSTALLMENT PURCHASE AGREEMENT OR LEASE-PURCHASE AGREEMENT A SMART WAY TO SELL MY PROPERTY?

Too often, the answer to this question is no. If a buyer cannot qualify for bank financing or assemble funds for the purchase, they can ask the seller to play the role of the bank and fund the deal through a long-term purchase contract. These are often riddled with problems. It is a warning sign, if someone has credit problems and cannot qualify for a loan, it is not a strong indicator that the loan will be repaid on time. The Law Offices of Scott G. Hoh does prepare Installment Purchase Agreements, typically for commercial properties and for Landlords that want to sell properties and get out of the rental business. If that is the case, it is critically important to have an experienced law firm. The loan agreement must clarify which party is responsible for paying insurance, taxes, and utilities.  There also must be a clear accounting system to keep track of the loan balance. Poorly written agreements frequently result in default and litigation. In sum, Installment Purchase Agreements have significant risks and are not recommended, but in other instances, this may be the only way to sell a property. If that is the case, an iron-clad agreement from an experienced law firm is crucial.

I HAVE A BOUNDARY DISPUTE WITH MY NEIGHBOR, HOW DO I RESOLVE IT?

As poet Robert Frost wrote, “Good fences make good neighbors.” The exact boundary line between properties can cause problems, particularly if the survey or legal description is unclear or contains errors. As part of our toolbox of real estate services, a qualified real estate attorney can help resolve disputes and problems associated with disputed boundaries.

AS A LANDLORD, WHAT ARE THE STEPS TO LEGALLY EVICT SOMEONE FROM MY RENTAL PROPERTY?

The Law Offices of Scott G. Hoh represent many landlord and property, investment clients. Scott Hoh and his wife own and operate their own rental properties, and know the difficulties of being a landlord. The Pennsylvania Landlord-Tenant Act as well as other civil procedure rules have very specific requirements for the legal eviction of a Tenant. The law attempts to balance rights between Landlords and Tenants. Also, other federal and state fair housing laws and related statutes apply to Landlord-Tenant matters. We can help expedite the eviction process. It is illegal for a Landlord to take matters into their own hands and force the removal of a nonpaying Tenant.

I OWN SEVERAL RENTAL INVESTMENTS, WHAT IS THE BEST WAY TO PROTECT MY PROPERTIES?

The Law Offices of Scott G. Hoh works with real estate investors and Landlords, with the goal of keeping Landlords out of trouble and helping to improve the return on investment in managing rental properties. It is easy to set up an LLC or other corporate entity and it is important that the new LLC is set up prior to purchasing. In general, it is OK to have several properties under a single LLC, but when the number of properties exceeds 7 or 8, it makes sense to form a different LLC. Insurance is a great hedge against liability. Regardless of the form of ownership, work with an experienced real estate investor's insurance brokerage to make sure an umbrella insurance policy is in place to have ample coverage for all rentals.

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Thank you for your interest. We look forward to hearing from you soon.

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