Understanding the Risks of a Bond for Title in Alabama

Posted March 29, 2018 by scottelangley
Categories: Uncategorized

Bond For Title

For those who are unable to qualify for a conventional mortgage, a bond for title may seem appealing since it is a way for you to invest in a home through owner financing instead of just paying rent.  A bond for title is an installment sales contract where the owner is financing the sale of property but not transferring title of the property to you until the terms of the contract are complete.   If you are considering entering into a bond for title, it is important for you to understand what risks are associated with such transactions.

Risks of a Bond For Title

1. Seller has mortgage on the property

If a seller still has a mortgage on the property that they are now trying to sell to you, then two major issues arise.

Due on Sale Clause

The first issue is the seller’s mortgage company likely has a due on sale clause written with the mortgage contract with the seller.  A due on sale clause means that the entire mortgage balance becomes due if the seller does anything to jeopardize the mortgage company’s rights to the property.  A bond for title is one of the types of transactions that a due on sale clause is designed to prevent.

Trusting the Seller

 The second issue is trusting the seller to use the money you pay to him to pay off his mortgage.  If you enter into a bond for title, you do not want to pay a large down payment and be paying on the property for a period of time only to discover that the seller was not paying his mortgage payments and the home is going to be foreclosed upon by his mortgage company.

Do your homework

Do not rely on the seller’s word on whether there is a mortgage on the property.  Instead, do your homework by going to your county probate office and researching whether there are any mortgages or liens placed upon the property address.  If there are liens or mortgages then you really need to think twice about entering into a bond for title on that property unless you are willing to take the risk.

Clause May Allow Seller Option To Void Contract And Convert To Lease

 Most bond for title contracts in Alabama have a provision that allows the seller to void the contract and treat it as a month to month lease if you default on your installment payments.  If you never are late on payments then this clause would not be a problem for you.  However, circumstances may change that cause you to default on the payments and if you do and the seller notifies you that he is treating the contract as a month to month lease then you really have no rights to enforce the sale unless you can prove to a court that the seller did not enforce strict compliance of this clause (meaning you have been late before and he has always accepted payments late).  To prove the clause should not be enforced requires a court to become involved and answer the question of fact whether the seller relied on the clause or waived it be accepting payments late in the past.

You Do Not Obtain Title Until All Terms Are Completed

 With a bond for title, the title of the property does not transfer to you until you complete all payments/terms of the contract.  The risk involved here is if the seller dies then you may have multiple heirs to deal with to determine who you pay to complete the terms and who will transfer title to you once you have performed all the terms.

Consider Owner Financing Instead of a Bond for Title

As an alternative to a bond for title, try to have an owner finance the mortgage for you so that the title is transferred into your name at closing and the seller will take a mortgage on the property until the loan is paid in full.  If you were to default on the loan, the seller would have to foreclosure on the property instead of converting the contract to a lease (see risk #2 above).  In order to do owner financing, the seller would have to own the property free and clear to be able to transfer the title to you which would eliminate any risks of the seller having a mortgage on the property you are buying (see risk #1 above).


Right of Redemption in Alabama

Posted March 20, 2018 by scottelangley
Categories: Alabama, Laws, Right of Redemption, Right of Redemption Alabama

Right of Redemption Basics

The right of redemption period is the period in which the former owner of a foreclosed property can buy back the property, regardless of whether the current owner wants to sell. The period begins on the date of the sale of the foreclosed property.

The Time Period

Until January 1, 2016, the right of redemption for residential property was one year. However, a bill passed several years ago changed the right of redemption for certain homesteaded properties. The recent change only changed the right of redemption for a narrow subset of properties – homesteads with a mortgage created on or after January 1, 2016.

  • If the mortgage was created before January 1, 2016, the right of redemption period is one year, for all real property.
  • If the mortgage was created on or after January 1, 2016, the right of redemption period is six months for a homesteaded property.

Notice of Foreclosure and a Recent Change

Alabama law requires the mortgagee, or financial institution, to provide notice to the mortgagor, or homeowner, of the foreclosure sale. If the mortgagee does not provide the notice as required, the right of redemption start date does not begin until the notice requirements are met. However, the law on notice was recently changed to state that, even if the notice is never corrected, the right of redemption period is one year from the foreclosure sale.

Two other points on notice are important to remember: 1) inadequate notice does not invalidate the foreclosure sale, and 2) possession or production of proof of mailing the notice is an affirmative defense if a lawsuit alleging inadequate notice is filed.

Questions to Ask

To determine the right of redemption period, ask yourself the following questions:

  1. Was the mortgage created before or on/after January 1, 2016?
    1. If before, a one-year period applies to all property.
  2. If the mortgage was created on or after January 1, 2016, was a homestead exemption declared on the property for the tax year during which the sale occurred?
    1. If the answer is yes, then the right of redemption period is six months.
    2. If the answer is no, then the right of redemption period is one year.
  3. When was notice given to the mortgagor at the address of the foreclosure property?
    1. If given before the foreclosure sale, then the right of redemption period is six months or one year from the foreclosure sale, depending on the answers to 1 and 2 above.
    2. If after the foreclosure sale or notice was not given, the redemption period begins when notice is given, but remember that the redemption period cannot go beyond one year from the foreclosure sale. For example, if notice of the foreclosure is given nine months after the foreclosure sale, the redemption period is three months – until the one-year date.

Who Can Redeem

Alabama law sets out seven categories of those entitled to redeem real estate after a foreclosure sale. Those are as follows:

  1. Debtors
  2. Mortgagors
  3. Junior mortgagees, or transferees
  4. Judgment creditors, or transferees
  5. Transferees of the interests of the debtor or mortgagor, either before or after the sale
  6. Spouses of debtors, mortgagors or transferees of a debtor or mortgagor, if married on day of foreclosure sale
  7. Children, heirs or devisees of a debtor or mortgagor

A Few Tips

If you have customers who purchase a property out of foreclosure, here are a few practice notes:

  • Redemption rare – After explaining all the details on the right, remember that the right of redemption is rarely exercised.
  • Be prepared – Even if redemption occurs very infrequently, purchasers should be prepared by maintaining records of and receipts to any permanent improvements made on the land since the foreclosure sale.
  • When redemption happens – Purchasers of foreclosed properties are entitled to be paid back certain costs, including the purchase price, insurance premiums and permanent improvements. Once a purchaser receives a letter requesting an itemized statement of debts and charges from a party exercising the right of redemption, the purchaser has 10 days to provide the statement, or risk forfeiting the compensation related to improvements.

Source: Ala. Code §§ 6-5-247 to 6-5-257.

Buying a Home with a Non-Spouse

Posted August 23, 2017 by scottelangley
Categories: Buyer, Buying, Buying A Home, Co Signers, Home Buyers, Home buying, Real Estate

When multiple people participate in a home purchase, they may not be married. They might be in a legal domestic partnership, committed relationship, common law marriage, or even strictly business partners. When it comes to buying a home with someone you’re not married to, there are things to take into consideration before making the very big decision of buying the home. Also, it’s important to check state and local laws as some states and towns have laws that prohibit unmarried couples from buying property together.

Share Financial Information

Sharing financial information is a big must when it comes to buying property with anyone (whether married or not). Financial information includes everything from income/salary, all debt (any current loans, student loan debt, car loans, etc.), credit scores, retirement accounts and any other income that might not be from a regular job. You have to be completely upfront about all finances, especially if you plan on applying for a mortgage loan. When applying for a mortgage loan, married couples have an advantage; they may be able to use the better credit history/credit score to apply for a loan; for couples that are not married, the mortgage lender will treat each person as an individual, meaning the lower of the two scores will take precedence when it comes to the terms of the loan.

Discuss and Plan Who Pays What

Buying a home is a big financial decision, and requires a sound understanding of who will be responsible for what. This includes paying any mortgage payments, household bills, property taxes, etc. If you’re purchasing a property with someone you’re not legally married to, it’s important to spell out and have a firm written ‘contract’ regarding who pays for what or how much. Before you buy, you need to agree on how much each person is going to contribute to the down payment, how much equity percentage each person will have in the property, and what each person will contribute to the mortgage, taxes, utilities, maintenance and anything else that may come up.

Have a Joint Bank Account

While joining bank accounts with the person you buy a home with isn’t a necessity, it is a good idea to have a shared account in which each person deposits their share of the home costs. When it comes to paying a mortgage, there are easier ways to pay beyond writing a check. With the advent of online banking and automatic withdrawal, you can set up the mortgage payment to come out of a joint account on the same day each month, making the mortgage payment easy and stress-free. With a shared account, any money for household bills, property improvements, taxes and anything else that may be considered important can come out of the joint account.

Credit Surprises

For buyers applying for a mortgage loan, maintaining the same level of credit between being approved and the final closing is extremely important for a successful transaction. A person’s credit can be impacted by anything: changing jobs, getting a new credit card, closing a credit card, falling behind on payments, and even adding additional debt through large purchases. Surprises when it comes to a buyer’s credit can be a deal breaker for the lender; to prevent issues, a buyer can contact the lender ahead of closing to discuss any surprises that may have come up and come to a solution. The best way to prevent credit surprises: avoid making large financial decisions prior to closing.

Decide On the Type of Title

When buying a home with someone you’re not married to, there are three different ways to “take title:”

Sole Ownership – This is where only one person’s name is on the title/deed, which means that one person is the only legal owner. Sometimes this choice is a good idea if one partner has poor credit and doesn’t want to be part of the mortgage decision. Other times, the higher-income partner may want to be able to use the house-related tax deductions on his/her taxes. The good news is that if the other person wants to be added to the title later on, there is a process in which to do it.

Joint Tenants – This option is available for those owners that want to have equal shares of the property. Both a benefit and a risk of this type of title is that one partner cannot sell the house without the other partner’s permission. Should one of the partners die, the “right of survivorship” guarantees the other partner inherits the other half of the property. In most states Joint Tenants comes with the right of survivorship, while in others it will need to be specifically stated on the title.

Tenants in Common – This is an option that allows multiple owners of a home/property, and for the owners to possess unequal shares. With this type of title, it is possible for any one of the owners to sell his/her share of the property at any time. Should one party die, that party’s share is left to whomever the party wished – the share doesn’t automatically go to the other owner(s). If this title is chosen, it’s important to get the percentages in writing, as very often the law will assume an equal split of the property.

Whether in a committed relationship, business partners, or buying property with a sibling/friend, property ownership is definitely a possibility. If you have any questions, your agent is able to provide additional guidance on buying a home with a non-spouse.

Thinking of Investing

Posted July 24, 2017 by scottelangley
Categories: Investments, Real Estate

Real estate is at the core of any business we come across and if you are interested in becoming a real estate investor, then this could be the best decision of your life. A right attitude and mindset will help you succeed along with a few tips that I have collected in my 10 year association with the real estate world. I have had a period of trials and errors but have realized that if you focus on residential properties then you cannot lose.
Tip 1: Begin small: Don’t expect to shoot up the curve on Day 1 as this happens only in miracles. The reason to begin small is that you are still quite new and inexperienced. You need to keep your risk factors low for fear of losing it all. First, you need to learn the basics of real estate investment and spend only the minimum amount of money. If you invest less time and more money, the end result may not be very pleasant. The ABCs have to come first and then the sentences. Attend training sessions, read books, browse online and talk to people in the real estate business to develop yourself.
Tip 2: Speculation does not work: You need to go for value while making your investment. How do you do it? You need to locate properties where cash flow is more along with potential gains. Value investment is the basis for making wealth from real estate. What is the difference between a value investor and a speculator? The difference is simple. A speculator is hopeful that the property price will increase in the future based on grounds which may be quite flimsy. It is like playing casino in Las Vegas. Whereas a value investor looks at the overall value and then invests in any property.
Tip 3: Don’t wander away from home: You are a beginner and need to concentrate on properties closer to home. The reason is you know the area well and it is a safer bet than starting in an unknown city. You know the trend in your city and the areas that are growing or declining along with the properties that are good. Also you know about upcoming properties and when to make a good investment. You need to stay close enough and observe the trends.
Tip 4: Mistakes will happen: Everybody I know has made mistakes as a real estate investor. Don’t treat your mistakes as failures as they are the perfect way for you to gather experience. Failing is a part of the learning curve and will help you to learn fast. Once you stumble and fall, you will rarely make the same mistake again.
Tip 5: Keep your aim realistic: All of us want to get rich quickly but making blunders will actually do the reverse. You need to be sure about the cost to you for the cash flow you desire. Calculate in terms of ROI. If you want an ROI of 20%, then what should it cost you and so on. You also need to keep in mind the losses you may make if the deal goes wrong and whether you can afford it. You need to think in terms of Is no rent for sometime if the tenant moves out affordable?’ or affordability of maintenance of the property and things to that effect. If real estate investment adds to your financial burden, then it is a sad situation.
Tip 6: The uglier the better: This is better done when you are not a green hand. The idea is to look for properties with problems and by fixing the problem, increase its value instantly. Suppose the property has a damp problem or has termites because of which you get it at a cheaper than market rate. Turn it around by taking care of the problems and sell it at a premium or increase the rentals.
Tip 7: Calculate beforehand: Just buying a property because you can afford it is not enough. If you are thinking in terms of investment, you need to do a few basic calculations. The main things would be – the price you need to pay for the property, monthly installments as well as down payment, loan you need, interest to the bank, rental income, cost of maintenance and other factors. When you add them up you should be making money and not being drained out of existing resources.
Investing in real estate is a safe bet provided you know the basics. Study the market and plunge in to make the best of your investment. Remember, nothing works like real estate business.

By Jonas Swain

The Right of Redemption by State

Posted July 24, 2017 by scottelangley
Categories: Real Estate, Right of Redemption

The right of redemption is the right of a homeowner in foreclosure to “redeem” the mortgage and keep the house by paying a certain sum of money within a certain period of time. Depending on the laws of their state, homeowners in foreclosure may have two separate rights of redemption: a pre-foreclosure equitable right of redemption and a post-foreclosure statutory right of redemption.

The Equitable Right of Redemption

All homeowners, no matter what state they reside in, have the right to redeem their mortgages and save their homes from foreclosure by paying off the entire mortgage balance, plus fees and costs, prior to the foreclosure sale. Although most homeowners in foreclosure will find it difficult to come up with all the cash required to redeem in a lump sum, mortgages may also be redeemed by refinancing the mortgage debt or selling the home to a purchaser.

The Statutory Right of Redemption

About half of all states have laws that give homeowners the right to redeem their mortgages for a period of time after the foreclosure sale, typically by paying the foreclosure sale price, plus interest and other allowable fees, to the foreclosure sale purchaser. If a home sells at a foreclosure auction for a price far below its fair market value, the homeowner may be able to recoup the equity by redeeming the property for the foreclosure sale price, selling the home to a buyer for the fair market value, and keeping the difference.

State Laws Regarding the Right of Redemption

Each state has its own law governing a homeowner’s right of redemption. Find your state in the list below to find out whether you have the right to redeem your mortgage after the foreclosure sale and what restrictions may apply.

Alabama Nonjudicial Yes, within one year after foreclosure sale. Right of redemption extinguished if borrower fails to turn over possession within ten days of buyer’s written demand for possession.
Alaska Nonjudicial Not after nonjudicial foreclosure unless the deed of trust specifically provides a right of redemption. If the lender pursues a judicial foreclosure, there is a 12-month redemption period after the sale is confirmed
Arizona Nonjudicial Not after nonjudicial foreclosure. Yes, within six months after a judicial foreclosure sale; if the property was abandoned, redemption period is 30 days.
Arkansas Nonjudicial Not after nonjudicial foreclosure. Yes, within one year after a judicial foreclosure sale, but not if the mortgage or deed of trust waives the right to redeem.
California Nonjudicial Not after nonjudicial foreclosure. Yes, after judicial foreclosure, but not if a deficiency judgment is waived or prohibited. Redemption period is three months after foreclosure sale if foreclosure sale price is equal to or greater than outstanding mortgage debt plus interest and costs; otherwise, redemption period is one year after foreclosure sale.
Colorado Nonjudicial No.
Connecticut Judicial Not after strict foreclosure, where the court transfers ownership of the foreclosed home directly to the foreclosing lender. (Law Day is the last date to redeem. Strict foreclosure is most commonly used in Connecticut). After a foreclosure by sale, the homeowner can redeem up until the court confirms the sale.
Delaware Judicial No. (Only up until the court confirms the sale.)
District of Columbia Nonjudicial No.
Florida Judicial Yes, until the court clerk files the certificate of foreclosure sale or the date specified in the foreclosure judgment, whichever date is later.
Georgia Nonjudicial No.
Hawaii Judicial No.
Idaho Nonjudicial No, not after a nonjudicial foreclosure. If the foreclosure is judicial, you can redeem within six months after the sale, if the property is 20 acres or less, or within one year after the sale, if the property has more than 20 acres.
Illinois Judicial Yes, within seven months after the foreclosure complaint or three months after final foreclosure judgment, whichever date is later, by paying amount of outstanding mortgage debt plus interest and costs (“Redemption Price”). If fair market value of property at time of foreclosure judgment is less than 90% of Redemption Price and lender waives right to deficiency judgment, borrower may redeem within 60 days after the foreclosure judgment date, or the expiration of any reinstatement period, whichever is later. If foreclosure sale purchaser was foreclosing lender and foreclosure sale price is less than Redemption Price, borrower may redeem within 30 days after confirmation of foreclosure sale by paying foreclosure sale price plus interest and costs.
Indiana Judicial Yes, after foreclosure judgment but before foreclosure sale by paying amount of judgment plus costs and interest. Not after foreclosure sale.
Iowa Judicial Yes, within one year after judicial foreclosure sale or six months after the sale, if agreed upon in the mortgage documents and the lender waives a deficiency. Not after alternative nonjudicial foreclosure.
Kansas Judicial Yes, within 12 months after foreclosure sale; court may shorten redemption period if property is abandoned. If less than one-third of mortgage was repaid, redemption period is three months; redemption period may be extended if borrower loses primary source of income after foreclosure sale. If outstanding mortgage debt is less than one-third of property’s fair market value, redemption period is twelve months.
Kentucky Judicial Yes, within one year after foreclosure sale only if the foreclosure sale price is less than two-thirds of the property’s fair market value.
Louisiana Judicial No.
Maine Judicial Yes, within 90 days after foreclosure judgment if mortgage was executed on or after October 1, 1975 and within a year if mortgage was executed before October 1, 1975. To redeem, borrower must pay amount of foreclosure judgment plus interest, fees, and costs.
Maryland Nonjudicial No. Not after the foreclosure sale is ratified by the court.
Massachusetts Nonjudicial Not after nonjudicial foreclosure. Yes, within three years after judicial foreclosure sale. If foreclosing lender gets deficiency judgment, borrower may bring suit for redemption within one year of deficiency judgment.
Michigan Nonjudicial Yes. For residential properties of four units or less, redemption period varies as follows: six months if mortgage executed on or after January 1, 1965 and outstanding mortgage debt is more than two-thirds of original mortgage debt; three months if property is abandoned and outstanding mortgage debt is less than or equal to two-thirds of original mortgage debt; one month if property is abandoned and outstanding mortgage debt is more than two-thirds of original mortgage debt; one year for all other residential properties of four units or less.
Minnesota Nonjudicial Yes, within six months or one year after foreclosure sale, depending on the circumstances. One month redemption period for abandoned properties.
Mississippi Nonjudicial No.
Missouri Nonjudicial Yes, within one year after foreclosure sale only if foreclosing lender is purchaser at such sale. Borrower must give written notice of intent to redeem at the sale or within ten days before the sale. Borrower must post a redemption bond within 20 days of the sale.
Montana Nonjudicial Not after nonjudicial foreclosure under the Small Tract Financing Act. Yes, within one year after judicial foreclosure sale.
Nebraska Nonjudicial No redemption period after nonjudicial foreclosures. Up until court confirms the sale, if foreclosure is judicial.
Nevada Nonjudicial No for nonjudicial foreclosures. One year if the foreclosure is judicial.
New Hampshire Nonjudicial No.
New Jersey Judicial Yes, during 10-day objection period after the sale and up until the court issues an order confirming the sale if objections are filed. Also if foreclosing lender gets deficiency judgment; redemption period is six months after deficiency judgment. To redeem, borrower must pay amount of foreclosure judgment plus interest, costs, and certain expenses.
New Mexico Judicial Yes. Borrower may redeem within 9 months, however this period may be reduced by the mortgage or deed of trust to no less than one month.
New York Judicial No.
North Carolina Nonjudicial Yes, within the ten-day “upset bid” period after foreclosure sale by paying outstanding mortgage debt plus costs.
North Dakota Judicial Yes, within 60 days after foreclosure sale. (If the property is agricultural, within one year after the foreclosing lender files the complaint and summons with the court, or 60 days after the sale, whichever is later.)
Ohio Judicial Until court confirmation of foreclosure sale by paying amount of foreclosure judgment plus costs and interest.
Oklahoma Nonjudicial Until completion of the sale. (In a judicial foreclosure, until court confirmation of foreclosure sale.)
Oregon Nonjudicial No, if the foreclosure was nonjudicial. If the foreclosure was judicial, you can redeem your home within 180 days after the foreclosure sale.
Pennsylvania Judicial No.
Rhode Island Nonjudicial If the foreclosure was nonjudicial, you don’t have the right to redeem your home after the foreclosure. If the foreclosure was judicial, you get three years to redeem after foreclosure sale by paying outstanding mortgage debt plus costs and interest.
South Carolina Judicial No. (While there is no post-sale right of redemption in South Carolina, under certain circumstances the homeowner could get the house back by making an “upset bid” after the foreclosure sale.)
South Dakota Judicial (homeowner can request it) Yes, generally one year or 180 days, if mortgage contains language that the 180-Day Redemption Mortgage Act governs. If property is abandoned, redemption period is 60 days.
Tennessee Nonjudicial Yes, within two years after foreclosure. Right of redemption may be waived in mortgage or deed of trust.
Texas Nonjudicial No.
Utah Nonjudicial Not after nonjudicial foreclosure. Yes, after judicial foreclosure (within 180 days after the sale).
Vermont Judicial Yes, within six months after court’s decree of strict foreclosure, where the court transfers ownership of the foreclosed home directly to the foreclosing lender, unless the court orders a shorter redemption period or you and the foreclosing lender mutually agree to a shorter period. In a foreclosure by judicial sale, the redemption period is six months from the date of the foreclosure decree, unless the court orders a shorter time.
Virginia Nonjudicial No.
Washington Nonjudicial Not after nonjudicial foreclosure or if the court determines that the homeowner has abandoned the home for six months or more. Yes, within eight months after judicial foreclosure sale if foreclosing lender waives right to deficiency judgment; if foreclosing lender fails to waive right to deficiency judgment, redemption period is one year.
West Virginia Nonjudicial No.
Wisconsin Judicial Yes, after foreclosure judgment but before foreclosure sale by paying amount of foreclosure judgment plus interest, taxes, and costs. (There is no post-sale right of redemption.)
Wyoming Nonjudicial Yes, within three months (or 12 months, if the property is agricultural) after foreclosure sale.

Negotiations and Real Estate

Posted July 24, 2017 by scottelangley
Categories: Buyer, Buying, Buying A Home, Choosing a Realtor, Home Buyers, Home buying, Home Sellers, House Prices, Negotiation, Real Estate, Realtors, REMAX, Selling, Selling a Home

When it comes to a real estate transaction, whether you’re a buyer or a seller, everything is negotiable. For many couples and individuals, a house or property will likely be the largest asset they ever own, which is why when it comes to the actual transaction, negotiating is incredibly important. Negotiating in real estate is more than just deciding on the sale price of a property or who will cover closing costs, and some negotiations will probably happen after the sale agreement is signed. Every aspect of a property can be negotiated, and it will be important to come to the negotiation table ready for anything.

Primary Items for Negotiation


The seller will want the highest selling price; the buyer will want the lowest amount. Unless you’re in a bidding war with multiple offers, there will be room for negotiation when it comes to the actual sale price of the property. As a buyer, you don’t want to feel like you’re getting taken advantage of, and as a seller you don’t want to feel like you’re getting low-balled. Area comps and other pieces of information about the property will help both parties negotiate a fair price. Also, if a home is need of modern updates, or is just rundown in general, a buyer can use that to their advantage when it comes to negotiating the sale price.

Closing Date

A motivated seller will likely want a quick closing, but if a buyer has to wait for financing, or they have a contingency (like their current home has to sell), negotiating a closing date can either be very quick or complicated. Another item that can be negotiated: when the seller vacates the property. For some sellers, they may need additional time for moving their items, etc. Both parties have the option of negotiating a possession date or even a rent-back agreement, allowing the seller to remain in the property for a specified amount of time after closing.

Closing Costs

Who normally pays which closing costs vary state by state, but as it’s said, everything is negotiable. A buyer may be able to negotiate with the seller to see if the seller can will cover some of the buyer closing costs.

Inspection and Repairs

Home inspections can pinpoint items that should be updated or fixed. It’s up to the buyer and seller to negotiate on the items that will be fixed based on any inspections and appraisals that take place. If the seller doesn’t have the funds to fix things that come up in an inspection, the buyer may be able to use it to his/her advantage when it comes to negotiating other items like the final sale price or who will cover the closing costs. While the seller normally specifies that the house comes ‘as is,’ there is usually opportunity for negotiation.


Unless it’s clearly stated that certain fixtures or appliances will go with the seller, a buyer can negotiate to keep fixtures and other items upon the sale of the property or require they be removed. Fixtures can include appliances, blinds and window panels, outdoor equipment, a hot tub and anything else. If a buyer sees something they’d like, there’s no harm in negotiating that the items stay with the new owner.

Home Warranty

Home warranties have become extremely popular in the U.S., especially for those buying homes that are not new construction. These plans typically cover a home’s systems (central air, central heating, etc.) and major appliances, with some plans even covering more items. Buyers have seen an increase in home warranty negotiations as they’re a great asset to a new homeowner.


When buying a property, the buyer will either be able to pay in cash, require a mortgage loan to cover the cost or have the seller carry the contract. Buyers who will need a mortgage may have to wait to be approved, whereas buyers with cash will likely be able to close sooner. A way to avoid financing negotiations is to, if applying for a mortgage, be fully pre-approved prior to making an offer.

Title expert provides commentary on Alabama’s “Right of Redemption”

Posted July 24, 2017 by scottelangley
Categories: Forclosures, Right of Redemption Alabama

Often I am asked about the right of redemption that arises with a foreclosure and our ability as a title company to insure over that right. While this right is something that should be addressed, it should not create an insurmountable barrier to sales or lending on the property. Your title company should, in most cases, be able to provide the coverage that the lender will need in order to finance the sale.

In Alabama, a lender is not required to file a judicial foreclosure or a court ordered foreclosure. A judicial foreclosure is more expensive and time consuming. This is one of the reasons that our state will recover more quickly from the recent downturn than some of our neighboring states that require the court to be involved. This efficiency has allowed Alabama to process and address the problems more rapidly. However, the check and balance to the speed and ease available in non-judicial foreclosures is the statutorily created right of redemption that arises. This right allows those that hold the right to redeem the property from the lender or any subsequent buyer for the redemption amount within a year of the foreclosure. After the year has passed, the right is extinguished forever.

The right to redeem extends to three levels. The first and primary level is the borrower or the guarantors to the note. The second position is held by any junior lenders who also have a secured interest in the property. Finally, any judgment creditor would also have a right to redeem. This would include anyone who has filed suit and holds a judgment under the suit. This suit may have nothing to do with the property. However, the judgment would attach to the property.

We are often asked to remove or insure over the right of redemption. The reality is that we can never simply remove the exception. Even if the borrower has assigned the right to redeem back to the lender or to the new purchaser, the right has not been eliminated. It does, however, mitigate the risk. An assignment of the right does not cover all of the holders of the right and we may not even be able to identify who holds the right. For example, if the borrower dies then his heirs would then hold the right. Additionally, if the borrower were to file for bankruptcy, the trustee may be able to exercise the right to redeem.

While we can never delete the exception for the right of redemption, we can often insure over the exception. This means that the insured would be covered if the property was redeemed. Unfortunately, we cannot insure over the right for the buyer. Although there are ways to mitigate that risk the buyer will be assuming some risk when purchasing the previously foreclosed property. We can, however, insure over the redemption right for the lender in two instances. The first is if the new loan is less than or equal to the redemption price. The redemption price is based on the amount paid at the foreclosure sale plus foreclosure expenses and interest and necessary repairs. (The subject of what constitutes a necessary improvement is the subject for another day.) If the new loan is less than the redemption price, we can give affirmative coverage to the lender which will allow for the financing and the purchase. The second scenario occurs when the redemption amount is less than the new mortgage amount. In that case, we typically would require a bond in order to give the affirmative coverage over the right of redemption to the lender.

The reality is that foreclosed properties are a significant segment of the market and will probably continue to be so for some time. While they do create special risks and problems, they also create opportunities for buyers. The right of redemption is a reality that travels with the properties at least on a temporary basis. However, the title company can give the lender comfort though affirmative coverage over the right that will allow the purchaser to finance and close the transaction. Your title company should be your partner in any transaction. Use your title company to help your deals flow more smoothly and efficiently.