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Lessons Learned

April 28, 2008

Can You Time The Market?

BlogclockPhoto by: dictybloke

I won't be surprised if this post gets nipped in the bud.

Whoever said that we can time the market is either a genius or dreaming. 

I am none of the above.   

But I am going to say it anyway:  I don't believe that we cannot time the real estate market.

Human nature rarely changes. History repeats itself.

I may not know when the exact market bottom will be, but history gives us great clues.
We know for example that once the real estate market reaches a bottom, it takes a while before it goes to normal appreciation (6-8%) this happens after a few years of breaking even to 2-5% appreciation. 

This is where I am coming from when I cringe when I hear people say, "Oh, I'll just wait for the market to come back up again before I sell my house" I just hope that they know that it may take a while for market cycles to reverse.

So how do we do it?First, know that the best we can do for now is have an educated guess.  We can never predict the exact time.  But you'll be surprised that that guess does not have to feel like your traversing a dark tunnel.

Take for example this graph of Reno's homes for sale,
How did I  'guess' that this was going to go up come summer months?
As you can see here. Notice that in the first graph that whenever we were in the summer months (the previous two years) inventory shot up.  It's not hard for me to reach the conclusion that the same thing will probably happen this coming summer(and that's whats happening right now).

And the best way to know that the market has bottomed is to wait until it bottoms out.  Make sure that it has, then move forward.  Sure, you didn't hit the exact bottom but by that time people are still unsure of the market that you will still be ahead of 80% of the majority.  Just don't wait too long before you act.

And lastly, I think we can predict the market when we continue to question and learn from the posts in this blog.  I really believe that.  That's my goal.

April 02, 2008

"Customer Service" is it just Lip Service?

Courtesy
Photo by: MBK (old skool)
 

Next time you ask me "how are you?" mean it and actually hear that I said "not too good" so you won't say "well that's great!".

Common Courtesy is Customer Service, I think that sums it all up for me. But is it really easier said than done these days? or am I just too sensitive? Please do tell.

First, I was shocked when I found out that I had to now pay ten cents for my BBQ sauce which I like with my fries from this famous fast food chain. From where I came from I can understand why they would have to charge for that extra sauce, but here?!

It's not that I mind paying an extra ten cents, but I never use to, that's the thing, I began to wonder if they're going to ask me to pay for a refill on my soda just like a small chinese restaurant would, which I understand the chinese restaurant but not this big company.

Second, My wife and I went to have a "Breakfast date" (if you have kids, every time that you are alone without the kids is a date.) and we felt like having a mexican food for the morning. Luckily we know this place close to my office which opens early.

I am guessing we were the first customers because the faces of the people in there seemed like they did not like to be there.  I told myself well maybe it's to early for them. So we chatted and we ate which was maybe about thirty minutes. We left the tip and we were still the only people inside and as we walked towards the door I was expecting a "Thank you very much" or "Come back soon" or something, they said nothing and still looked liked they despised serving us.

Third, Again with my wife but now with my two wonderful kids, my four year old boy and my a one and a half year old girl (so if you have kids of your own you know what I mean with the wonderful given with the ages.).

My boy asked me if we can have sushi for dinner which of course the answer to that is "yes sir".  I live in Sparks and there is that small sushi place not far from my home (instead of doing the drive to Reno we figured to give this one a shot.)

We walked in and there was maybe twelve open chairs by the bar and the waitress asked us if we wanted the bar or the table, we said the bar and as we try to settle in to one of the open chairs she said "no no not there, that's reserved." So we were waiting for her to tell us where we can sit but she said "you have to wait twenty minutes for the bar, but you can be served now if you chose the table." My wife adamantly answered, "we want the bar."
The waitress was true to her word, she made us wait for twenty minutes while the twelve empty chairs that was supposedly reserved was occupied by two people who didn't know that those two chairs were reserved for them.

After twenty minutes and two soy sauce bottles broken (culprit: zozo, I promise to you I did not have anything to do with that, he just has it in him to break things, needed or not.)

The waitress didn't have a choice but to give us four chairs out of the ten that was open (I was just really thankful that she made us sit with our children.). We had our fill and left, I wanted to stick it to them and not tip but my wife was feeling generous so I agreed.

I couldn't help but wonder...

Don't we act the same way sometimes in the real estate business?

I found out the hard way just like my stories.

Is a call back so hard to do for either a feedback or even more, for our transaction? This goes for businesses or personal calls. The longer I do not hear back from another agent it just tells me how much my call was worth to him or her. The longer a friend of mine does not call me back makes me wonder if I ever did offend him or her the last time we spoke, or maybe we're not friends anymore?

I got an inquiry about my listing and this lady wanted to find out everything about the property but not wanting to give me even her first name. Why is that? Is she scared that I might bug her with my calls or mailers? I would need your address first and then your number.

A referring agent from a different state tells me about all her properties that needs to sell right away, I get on the ball and spent a whole day preparing comps, contracts, and then mailing them overnight so I could meet the right away  but to this day I still don't have one back (this was three weeks ago).

The Banks with Short Sale Transactions! Need I say more?

The Escrow officer who constantly mails you materials  but could not return your call when you really need an answer.

The buyer you took out the day after Christmas to see homes at ten in the morning, could not even call you back to let you know that, "hey we decided not to go with you" or "we liked a different house" something.

I am sure that I have been guilty of the same things in my life and career, but I believe that the only true way to learn to be courteous is when you are in the other side,waiting.

So, Make sure we return those calls, better yet pick it up if you can. But never forget to call them back. Good news or not I want that call back from you, same as you want it from me.

Next time you ask me, "how are you doing?" mean it and actually hear that I said "not too good" so you won't say "well that's great!".

Smile. Aside from it being contagious it speaks volumes.

And if I want my four year old to see how sushi is made by having him sit by the bar, let me have it.

Ralph Waldo Emerson says it best (twice):

"Life is short, but there is always time for courtesy."

"We must be as courteous to a man as we are to a picture, which we are willing to give the advantage of a good light."


March 24, 2008

Chase Agent's Reno & Tahoe Blogs

Screenhunter_2_2
Photo by: six_austins

Dare I confess that in the spirit of sibling rivalry I have left a trail of frigid relationships with my fellow chase bloggers.

"The hardest thing to is to be humble in the presence of a great idea", somebody once said.

Painfully true.

It is hard to be genuinely interested in other people's labor of love (other chase's blogs) when I often spend three hours per business day managing this blog- aiming to catch the next big wave so that everybody in the office can proclaim, " whow look at Joe and Ian Fly!"

"Instead of spending too much time trying to be interesting, invest more time being interested", said John Gardner

I proudly present to the world my sibling's weblogs:

I fancy their 'best buy list'.

'For sale by owners' can advertise their homes for free-valiant idea.

I have been a fan since December 2005.

Take charge. Opinionated. Informed.

February 15, 2008

"We're not getting out by Christmas, Deal with it"

Roots_2 Photo by: le faju

I now understand the reasons behind taking the easy way.  Passions that have been domesticated.  It's easy for me to look at people who 'gave up' on their dreams, feeling bad knowing what they could have been.   This market has awaken me to my over confidence- it humbled.  Indeed,It is not easy taking the road less traveled.

JoAnne Correira, the most refreshing agent in Reno, once told Joe and me: 'this down market will separate the men from the boys'.  I grossly underestimated what it meant. I am growing an inch of mustache every fifteen minutes. 

The author's present ranting is not meant to spread gloom.  We have enough of that.  I am recognizing that there is something deeper at play, a conspiracy to push us to the limit.  But why? why do I feel  that somehow this was meant to be.  And for some bizarre reason, deep at the core, I welcome the challenge: ' do your worst...' The thought of finishing this race stronger as ever gives me the chills.  I can't wait.

I am reminded of Jim Stockdale, an eight year prisoner of war at the 'Hanoi-Hilton' prison camp, (though what we are going through does not even remotely come close to what Mr, Stockdale experienced, his story has encouraged me a great deal) :

“I never lost faith in the end of the story,” he said, when I asked him. “I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining event of my life, which, in retrospect, I would not trade."

I didn’t say anything for many minutes (Jim Collins speaking), and we continued the slow walk toward the faculty club, Stockdale limping and arc-swinging his stiff leg that had never fully recovered from repeated torture. Finally, after about a hundred meters of silence, I asked, “Who didn’t make it out?”

“Oh, that’s easy,” he said. “The optimists.”

“The optimists? I don’t understand,” I said, now completely confused, given what he’d said a hundred meters earlier.

“The optimists. Oh, they were the ones who said, ‘We’re going to be out by Christmas.’ And Christmas would come, and Christmas would go. Then they’d say,‘We’re going to be out by Easter.’ And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. And they died of a broken heart.”

Another long pause, and more walking. Then he turned to me and said, “This is a very important lesson. You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be.”

To this day, I carry a mental image of Stockdale admonishing the optimists: “We’re not getting out by Christmas; deal with it!”

 

February 08, 2008

Introducing: A Simple Guide to Short Sale and Foreclosure- PART 3

Read part 1

Read part 2

House4Photo courtesy of mari paintbox 


NRS -    DEFAULT AND SALE

  • NRS 107.080  Trustee's power of sale: Power conferred; required notices; effect of sale; effect of failing to substantially comply with requirements of section.
  • NRS 107.081  Time and place of sale; agent holding sale not to be purchaser.
  • NRS 107.082  Oral postponement of sale.
  • NRS 107.083  Proceedings after purchaser refuses to pay amount bid.
  • NRS 107.084  Liability for removing or defacing notice of sale.
  • NRS 107.085  Restrictions on trustee's power of sale concerning certain trust agreements:  Applicability; service of notice upon grantor; scheduling of date of sale; form of notice; judicial foreclosure not prohibited; "unfair lending practices" defined.
  • NRS 107.090  Request for notice of default and sale: Recording and contents; mailing of notice; effect of request.
  • NRS 107.095  Notice of default: Mailing to guarantor or surety of debt; effect of failure to give.
  • NRS 107.100  Receiver: Appointment after filing notice of breach and election to sell.

Short Sale Flow Chart

Listing Taken / Real Estate Authorizations Obtained            

Short Sale Package Requested from Lender 

Initial Requirements to Lender

Offer Accepted

Final Requirements Sent to Seller's Lender with HUD 

Seller's Lender Approval - Settlement Amount Obtained
Short Sale or Release of Lien Disclosed by Lender

Docs Signed by all parties, Money Deposited 

Escrow Closed with First Centennial Title


Example:

Purchase price:  $450,000
(three years ago)

80% Neg Am loan:  $360,000
Loan payoff amount at 110%:  $396,000
(maybe a prepayment penalty of $6,500.00)

Contracted Sale amount:  $380,000.00
(February1,2008)

Expenses:

  • Owner's Title Policy:  $1,374.00
  • ½   Escrow Fee:  $408.00
  • Recording Fee:  $20.00
  • Reconveyance Fee:  $90.00
  • ½ Transfer Fee:  $871.25
  • County Taxes:  $700.00
  • Additional Costs:  $150.00
  • 6% Commission:  $22,800.00

___________________________________
Total Expenses:              $26,413.25

Proceeds before Payoff:  $353,586.75

Lender is owed $396,000.00  We are asking them to short sale the
difference= $42,413.25

Short Sale they would release in total and accept $353,586.75 send title company a paid in full letter and reconveyance.

Release of lien would accept the $353,586.75 and have the Seller sign a note for $$$$$$(an unknown amount) could be as high as the actual shortage of $42,413.25

* Information provided by First Centennial Company of Nevada

February 07, 2008

Introducing: A Simple Guide to Short Sale and Foreclosure- PART 2

Read part 1

House_5_4Photo courtesy of Björgvin Sigurðar. 
 

Who does a Short Sale Apply to?

  • Seller that has missed payments
  • Seller that is in foreclosure
  • Seller that is upside down in a property and must sell
  • Jump in payment or balloon payment coming due
  • Loss of employment / divorce / illness / family death

Note:  Seller requests short sale to avoid foreclosure

                                              


Discounts

To What Extent Do Creditors Discount?

  • Creditors discount debt secured by real property based on their convenience and risk.
  • If they will surely get paid they will not discount at all.
  • If they will most likely get paid most of what they are are owed they may discount somewhat.
  • If they will definitely lose an account but still get something at the auction, they will discount very much.
  • If the creditor will most likely get nothing at the foreclosure sale, they will be inclined to discount heavily in order to get a recovery.

Why Do Creditors Discount?

  • Creditors discount only when they will lose even more at the foreclosure or will end up with the property in poor condition.
  • The higher the chance they will get paid at the foreclosure sale, the lesser the chance they will discount.
  • The lower the chance they will get paid at foreclosure sale, the higher the chance and amount of creditors will discount.

  Who Makes Initial Contact?
  Emotions Drive Decisions

  • There are very few things in this world that stir emotions as hard as real estate.  Real estate is the reason for most wars.
  • When it comes to a person's home, things get very personal.
  • Sellers want burden removed from them.

   

Realtor Disclosures

  • Listing must show sale needs third party approval.
  • Possibility of foreclosure
  • Hold harmless- because the Lender may not approve.
  • Possible tax implications- 1099C - Cancellation of Debt filed with IRS
  • Possible credit consequences
  • Seller may still owe to creditors
  • Sellers nets no money from the sale
  • See Broker for requirements- code of Ethics
  • Legal vs. non-legal
  • Disclose to Buyer on offer
  • Disclosure about re-sale

    

Basic Requirements of the Lender

  • Hardship letter
  • Purchase Agreement / Listing Agreement / Buyer Brokerage Agreement
  • Estimated settlement statement (HUD1) with commission
  • Market Analysis / Appraisal
  • Pay stubs, Bank Statements, W-2's, tax returns and financial statements

                                                      

Time Frame

  • Approximately 30-90 days with no guarantees.
  • May need to extend or postpone foreclosure
  • Must comply with all time frames

Get everything in writing!

Read part three

February 06, 2008

Introducing: A Simple Guide to Short Sale and Foreclosure

Foreclosure

Homeowners Predicament:

  • Ruined Credit
  • May end up owing after the foreclosure
  • Collectors chasing: Judgements & garnishments
  • Shame

Solution

Short Sale

  • Avoids some of the problems listed previously
  • Creditors get more of their principal sooner
  • Short Sale has the same time frames as an ordinary sale- easier exit.

What is a short sale?

  • A short sale is the sale of a property, for less than what is owed, by obtaining permission from all the secured creditors to do so.

Who takes short sales?

  • Any creditor, secured by collateralized real estate,whose equity position in the property is compromised.

Parties involved in a Short Sale

  1.   Homeowners- provide copies of notes, prepayments & loan balances.
  2.   Listing Agent- letter of authorization signed.
  3.   Loss Mitigation Officer
  4.   Trustee
  5.   Additional Lien Holders
  6.   Title Company
  7.   Appraiser or BPO from Realtor

       

                                Difference Between Short Sale vs. Release of Lien

  • In a short sale the creditor settles in full the amount owed by the debtor for a value that is less than what the creditor is owed.  The remaining balance is forgiven.  The homeowner no longer owes anything to the creditor.
  • In a release of lien, the creditor removes its security interest in the property but the amount owed is not forgiven.  The homeowner still owes a balance to the creditor.

Short Sale vs. Release of Lien

  • A creditor that authorizes a short sale will issue a settlement letter stating that the debt is settled in full for a specified amount.
  • A creditor that releases a lien will, prior to releasing the lien, make the homeowner sign a new promissory note, not secured by a trust deed on the property, stating the value of the debt and the terms of payment/
  • Listing agent keeps Seller informed w/ documentation as to what could happen, including foreclosure.

                                  Who does a Short Sale Apply to?

  • Seller that has missed payments
  • Seller that is in foreclosure
  • Seller that is upside down in a property and must sell
  • Jump in payment or balloon payment coming due
  • Loss of employment/divorce/illness/family death

Note:  Seller requests short sale to avoid foreclosure

                                              

Discounts

To What Extent Do Creditors Discount?

  • Creditors discount debt secured by real property based on their convenience and risk.
  • If they will surely get paid they will not discount at all.
  • If they will most likely get paid most of what they are are owed they may discount somewhat.
  • If they will definitely lose an account but still get something at the auction, they will discount very much.
  • If the creditor will most likely get nothing at the foreclosure sale, they will be inclined to discount heavily in order to get a recovery.

Why Do Creditors Discount?

  • Creditors discount only when they will lose even more at the foreclosure or will end up with the property in poor condition.
  • The higher the chance they will get paid at the foreclosure sale, the lesser the chance they will discount.
  • The lower the chance they will get paid at foreclosure sale, the higher the chance and amount of creditors will discount.

                                           Who makes Initial Contact?
                                            Emotions Drive Decisions

  • There are very few things in this world that stir emotions as hard as real estate.  Real estate is the reason for most wars.
  • When it comes to a person's home, things get very personal.
  • Sellers want burden removed from them.

   

                                           Realtor Disclosures

  • Listing must show sale needs third party approval.
  • Possibility of foreclosure
  • Hold harmless- because the Lender may not approve.
  • Possible tax implications- 1099C - Cancellation of Debt filed with IRS
  • Possible credit consequences
  • Seller may still owe to creditors
  • Sellers nets no money from the sale
  • See Broker for requirements- code of Ethics
  • Legal vs. non-legal
  • Disclose to Buyer on offer
  • Disclosure about re-sale

    

                                          Basic Requirements of the Lender

  • Hardship letter
  • Purchase Agreement / Listing Agreement / Buyer Brokerage Agreement
  • Estimated settlement statement (HUD1) with commission
  • Market Analysis / Appraisal
  • Pay stubs, Bank Statements, W-2's, tax returns and financial statements

                                                      Time Frame

  • Approximately 30-90 days with no guarantees.
  • May need to extend or postpone foreclosure
  • Must comply with all time frames

Get everything in writing!

                                           
NRS -    DEFAULT AND SALE

  • NRS 107.080  Trustee's power of sale: Power conferred; required notices; effect of sale; effect of failing to substantially comply with requirements of section.
  • NRS 107.081  Time and place of sale; agent holding sale not to be purchaser.
  • NRS 107.082  Oral postponement of sale.
  • NRS 107.083  Proceedings after purchaser refuses to pay amount bid.
  • NRS 107.084  Liability for removing or defacing notice of sale.
  • NRS 107.085  Restrictions on trustee's power of sale concerning certain trust agreements:  Applicability; service of notice upon grantor; scheduling of date of sale; form of notice; judicial foreclosure not prohibited; "unfair lending practices" defined.
  • NRS 107.090  Request for notice of default and sale: Recording and contents; mailing of notice; effect of request.
  • NRS 107.095  Notice of default: Mailing to guarantor or surety of debt; effect of failure to give.
  • NRS 107.100  Receiver: Appointment after filing notice of breach and election to sell.

                                              Short Sale Flow Chart

                          Listing Taken / Real Estate Authorizations Obtained            

                                                                                                             

 

 Short Sale Package Requested from Lender 

                                         ↓

 Initial Requirements to Lender

                                         ↓

      Offer Accepted

 

 Final Requirements Sent to Seller's Lender with HUD 

 

                              Seller's Lender Approval - Settlement Amount Obtained
                              Short Sale or Release of Lien Disclosed by Lender

                                         ↓

                                       Docs Signed by all parties, Money Deposited 

 

 Escrow Closed with First Centennial Title

Example:

Purchase price:  $450,000
(three years ago)

80% Neg Am loan:  $360,000
Loan payoff amount at 110%:  $396,000
(maybe a prepayment penalty of $6,500.00)

Contracted Sale amount:  $380,000.00
(February1,2008)

Expenses:

  • Owner's Title Policy:  $1,374.00
  • ½   Escrow Fee:  $408.00

  • Recording Fee:  $20.00
  • Reconveyance Fee:  $90.00
  • ½ Transfer Fee:  $871.25
  • County Taxes:  $700.00
  • Additional Costs:  $150.00
  • 6% Commission:  $22,800.00

___________________________________
Total Expenses:              $26,413.25

Proceeds before Payoff:  $353,586.75

Lender is owed $396,000.00  We are asking them to short sale the
difference= $42,413.25

Short Sale they would release in total and accept $353,586.75 send title company a paid in full letter and reconveyance.

Release of lien would accept the $353,586.75 and have the Seller sign a note for $$$$$$(an unknown amount) could be as high as the actual shortage of $42,413.25


  

 


 


 












                                  

Introducing: A Simple Guide to Short Sale and Foreclosure- PART 1

House2 Photo courtesy of Farl
                                                         

Foreclosure

Homeowners Predicament:

  • Ruined Credit
  • May end up owing after the foreclosure
  • Collectors chasing: Judgements & garnishments
  • Shame


Solution

Short Sale

  • Avoids some of the problems listed previously
  • Creditors get more of their principal sooner
  • Short Sale has the same time frames as an ordinary sale- easier exit.

Short Sales

What is a short sale?

  • A short sale is the sale of a property, for less than what is owed, by obtaining permission from all the secured creditors to do so.

Who takes short sales?

  • Any creditor, secured by collateralized real estate,whose equity position in the property is compromised.

Parties involved in a Short Sale

  1.   Homeowners- provide copies of notes, prepayments & loan balances.
  2.   Listing Agent- letter of authorization signed.
  3.   Loss Mitigation Officer
  4.   Trustee
  5.   Additional Lien Holders
  6.   Title Company
  7.   Appraiser or BPO from Realtor

       

         
Difference Between Short Sale vs. Release of Lien

  • In a short sale the creditor settles in full the amount owed by the debtor for a value that is less than what the creditor is owed. The remaining balance is forgiven.  The homeowner no longer owes anything to the creditor.
  • In a release of lien, the creditor removes its security interest in the property but the amount owed is not forgiven.  The homeowner still owes a balance to the creditor.

Short Sale vs. Release of Lien

  • A creditor that authorizes a short sale will issue a settlement letter stating that the debt is settled in full for a specified amount.
  • A creditor that releases a lien will, prior to releasing the lien, make the homeowner sign a new promissory note, not secured by a trust deed on the property, stating the value of the debt and the terms of payment/
  • Listing agent keeps Seller informed w/ documentation as to what could happen, including foreclosure.

Read part two

February 01, 2008

Common Ways To Hold Title In Nevada

Screenhunter_01_feb_01_1205_2

Note: It will be less of a burden for some (like me) in understanding the article below if we start with this one:  How You Take Title.


 


Tenancy In    Common 

Joint Tenancy with Right of Survivorship

Community Property



Community Property with Right of
Survivorship

Parties           

Any Number of persons. Can be     Husband & Wife   

Any number of persons. Can be Husband & Wife

Husband & Wife,Only.

Husband & Wife,only. Two persons per marital community

Division

Ownership can be divided into any number of interests. Does not have to be equal.

Ownership interests must be equal.

Ownership interests must be equal.

Ownership interests must be equal.

Title

Each owner has a separate legal title to his undivided interest.   

There is only one title to the whole property.

Title is in the "community." Each interest in separate but manages unified.

Title is in the "community." Each interest in separate but manages unified.

Possession

Equal rights of possession.   

Equal rights of possession.   

Equal rights of possession.   

Equal rights of possession.   

Conveyance

Each co-owner's interest may be conveyed separately by its owner.

Conveyance by one co-owner without the other breaks the joint tenancy. Must be recorded before death of any tenant.

Both co-owners must join on the conveyance of the real property. Separate interests cannot be conveyed.

Both co-owners must join on the conveyance of the real property. Separate interests cannot be conveyed.

Purchaser's
Status

Purchaser will become a tenant in common with the other co-owners of the property.

Purchaser will become a tenant in common with the other co-owners of the property.

Purchaser can only acquire whole title of community. Cannot acquire a part of it.

Purchaser can only acquire whole title of community. Cannot acquire a part of it.

Death

On co-owner's death, the deceased's interest passes by will to the devisees of heir. No right of survivorship. Subject to court approval.

On co-owner's death, the deceased's interest ends and cannot be disposed of by will. Survivor owns the property by right of survivorship.


On co-owner's death, one half belongs to survivor in severalty. One half goes by will to descendant's devisees or by succession to survivor.

On co-owner's death, the deceased's interest ends and cannot be disposed of by will. Estate passes to survivor outside of probate.

Creditor's Rights

Co-owner's interest may be sold at execution sale to satisfy creditor. Creditor becomes tenant in common.

Co-owner's interest may be sold at execution sale to satisfy creditor. Joint tenancy is broken; creditor is then tenant in common.

Co-owner's interest cannot be seized and sold separately. The entire property may be sold at execution sale to satisfy creditors.

Co-owner's interest cannot be seized and sold separately. The entire property may be sold at execution sale to satisfy creditors.

Additional Links:

* Information provided by First Centennial Title Co. of Nevada.

January 30, 2008

How You Take Title

Ians_pics_067 Our Somerset Listing

                  
                               
Advantages and Limitations

Title to real property in Nevada may be held by individuals, either in Sole Ownership or in Co-Ownership.  Co-Ownership of real property occurs when title is held by two or more persons.  There are several variations as to how title may be held in each type of ownership.  The following brief summaries reference eight of the more common examples of Sole Ownership and Co-Ownership.

                                                  SOLE OWNERSHIP
A Single Man/Woman

1. A man or woman who is not legally married.  Example: John Doe, a single man.

An Unmarried Man/Woman

2.   A man or woman, who having been married is legally divorced.  Example: Joe Doe, an unmarried man.

A Married Man/Woman, As His/Her Sold And Separate Property

3.
When a married man or woman wishes to acquire title in his or her name alone, the spouse must consent, by quitclaim deed or otherwise, to transfer thereby relinquishing all right, title and interest in the property.  Example: John Doe, a married man, as his sole and separate property.

                                                   

CO-OWNERSHIP

Community Property

4. Nevada defines community property acquired by husband and wife, or by either.  Real property conveyed to a married man or woman is presumed to be community property, unless otherwise stated.  Under community property, both spouses have the right to dispose of one half of the community property.  If a spouse does not exercise his/her right to dispose of one-half to someone other than his/her spouse, then the one-half will go to the surviving spouse without administration.  If a spouse exercises his/her right to dispose of one-half, that half is subject to administration in the estate. Example: John Doe & Mary Doe, husband and wife.  Example: John Doe, a married man.

Joint Tenancy

5.
A joint tenancy estate is defined as follows: " A joint interest is one owned by two or more persons in equal shares, by a title created by a single will or transfer, when expressly declared in the will or transfer to be a joint tenancy." A chief characteristic of joint tenancy property is the right of survivorship.  When a joint tenant dies, title to the property immediately vests in the surviving joint tenants (s).  As a consequence, joint tenancy property is not subject to disposition by will.  Example: John Dow and Mary Dow, husband and wife,as joint tenants.

Tenancy In Common

6.
Under tenancy in common, the co-owners own undivided interests; but unlike joint tenancy, these interests need not be equal in quantity or duration, and may arise at different times.  There is no right or survivorship; each tenant owns an interest which, on his or her death, vests in his or her heirs or devisees.  Example: John Doe, a single man, as to an undivided 3/4ths interest, and George Smith, a single man, as to an undivided 1/4th interest, as tenants in common.

Trust

7. 
Title to real property may be held in a title holding trust.  The trust holds legal and equitable title to the real estate.  The trustee holds title for the trust/beneficiary who retains all of the management rights and responsibilities,

Community Property With Right of Survivorship

Community Property of a husband and wife, when expressly declared in the transfer document to be community property with the right of survivorship, and which may be accepted in writing on the face of the document by a statement signed or initialed by the grantees, shall, upon the death of one of the spouses, pass to the survivor, without administration, subject to the same procedures as property held in joint tenancy.

The preceding summaries are a few of the common ways to take title to real property in Nevada and are provided for informational purposes only.  For a more comprehensive understanding of the legal and tax consequences, appropriate consultation is recommended.  There are significant tax and legal consequences on how you hold title.  We strongly suggest contacting an attorney and/or CPA for specific advise on how you should actually vest your title.