Choice Title Blog

I know we all are frustrated with the media and their continuing practice

of trying to scare us and our clients away from real estate, but there is

rainbow appearing from the storm. In not one, but THREE places; Louisiana

in general, Baton Rouge and New Orleans specifically have been held out as

the best or most improved market available…nation wide!

What a boost for our spirits, let alone our wallets! Let’s look at what is

being said –

Forbes magazine in their article “10 Best Places to Relocate” listed New

Orleans as a great place for young, new, entrepreneurs. That we have been

seeing an influx of people looking to cash in on the rebuilding of the

city, new businesses that are opening and our great real estate prices. Go

figure…

An article earlier this year named the Thibodaux-Houma corridor as the #1

area in the nation for home value appreciation, close to 10% annually. Some

of our best gems are hidden away in our beautiful wetlands!

And Baton Rouge couldn’t have a better image nationally than if they went

out and hired someone (I thought we did!) to write glowing accolades of our

market. Local Market Monitor declared the Capital Region to be stable for

the next 12 months, much credit to our agents and citizenry since we never

did let our home pricing get as insane as some in California, Florida or

Nevada. First American CoreLogic’s Home Price Index showed a 3.1% increase

in home prices in January and Louisiana overall having a statewide increase

of 4.8% (2.5% if you include distressed properties).

With all of this good news, we need to be sharing it with every client we

have in our database. Who knows whose kid just graduated from college and

is looking for some place different to apply that newly earned degree; or

has a friend or relative that’s lost a job in one of those aforementioned

awful markets that needs a new beginning. There are a million opportunities

out there, our job is to let them know that it’s better here. Hope has

indeed found fertile ground.

What is a Bond For Deed? (part 1)

A Bond for Deed is a Louisiana Contract to sell property in installment payments, transferring title after the price is paid in full. Payments must be made through an “escrow” agency, who makes monthly payments to the creditor, and issues IRS 1098 interest reports. The escrow agency is responsible for sending all required notices to buyer and seller.

What the seller needs to know:

• Seller can earn interest on payments made by the Buyer. The sales price is not dependent on the mortgage balance owned to his lender.
• Permission of Seller’s mortgage company is not required unless the mortgage specifically prohibits a Bond for Deed transaction.
• Cancellation of the Contract for non-payment is cheaper and faster than foreclosure.
• If Buyer defaults, all payments made to seller are forfeited, including any down payments made by Buyer.
• Seller is responsible for all payments to Mortgagee, even if Buyer has not timely made the payments.
• Seller must notify Escrow Agent if payments to Mortgagee change due to escrow shortages.

What the Buyer needs to know:

• Buyer can claim homestead exemption while making payments, even though he does not own title, if he lives on the property as his primary residence.
• Buyer can claim IRS interest deductions on tax return.
• Buyer is responsible for repairs, maintenance, termite inspection, insurance etc.
• Insurance coverage must list owner as primary insured and purchaser as “additional insured”.
• Title insurance is available.
• Bond for Deed is a mechanism used temporarily to bridge gaps while waiting for favorable market values and interest rates.
• In the event Seller files bankruptcy, the Buyer is protected by the Bankruptcy code.
• Death of the Seller does not affect the validity of the Contract, as the heirs of seller inherit the benefits of the Contract terms.
• Mortgages to Buyers qualify as refinances, rather than new purchase loans. Payments made under existing Contracts are treated as mortgage payments

Information prepared by Sheila Bonnette, Choice Title Inc.