May 31, 2005

Buying some extra piece of mind when you purchase a home

Buying a home can be overwhelming, with all the papers to sign, fine print and little add-ons you might not have been expecting -- such as title insurance.

Rafael Castellanos with Expert Title Insurance in New York explains that it's coverage protecting you in case any questions arise about whether you can actually own the property. For example, someone may have forged a signature on a prior deed, they may have been incompetent to give a deed, or the deed may have been given by an unauthorized corporate officer -- rendering it void.

Title insurance is a one-time cost, typically about one or two-thousand dollars for a 200-thousand dollar home.

Castellanos says if someone makes a claim down the road, title insurance will take care of paying your legal defense, attorney's fees, court costs and any other expenses incurred in defending your title.

Consumer Reports says title insurance probably makes sense for most homeowners, since, for most, a home is usually a very large investment.

October 3, 2005

Escrow’s Takeout Menu Offers Options
Do escrow and title fees elude you? Discover what these closing costs render.

By Allie Bullock-Kagamaster

According to the U.S. Department of Housing and Urban Development, Americans dole out some $55 billion on closing costs they don’t fully understand. As the nation’s housing boom continues to soar, buyers who enter into escrow—the legal go-between where paperwork is handled and funds are held by a neutral third party from the time an offer is accepted for the home until the close of sale—may wonder what exactly they are paying for and what to expect when plunking down their hard earned cash for title insurance and other home purchase fees.

While industry standards are designed to protect the interests of all parties during real estate sale transactions, when it comes to escrow fees and title insurance—the one-time fee to ensure title is clear for both buyer and lender—convention varies from state to state.

In San Diego’s hot market, real estate broker and chief compliance officer at Century 21 Award, Ann Throckmorton, says buyers pay for a service. “For that [escrow] fee, they’re buying the services of someone with a central repository who can handle any law suits or judgments. [Buyers] have the assurance their property has no encumbrances or exceptions such as property taxes due, unknown parties with interest in the property, second trust deeds, easements, any legal situations or judgments.”

Throckmorton, who is a seasoned real estate professional, says in terms of hidden costs to the buyer, title fees, gauged by insurance regulators, are straight forward, fee-based percentages determined by the price of the loan. However, extra fees may include issues of boundary lines, liens or easements, and could run about $350 plus one dollar per thousand dollars of property value.

As a rule, the seller pays for title insurance and the buyer purchases a piggyback policy. “If you have a trust for special review, documents are wired and a menu of services is not included in the base price. Sub-escrow fees include loan tie-ins and special doc fees,” Throckmorton explains.

Just up the coast from San Diego, in Orange County, Jerry Viceroy of United Title Company adds there is pressure on some agents to push certain services, but there are companies like United Title that have simplified the escrow process by offering a flat fee, charging buyers extra fees only for expenses incurred from third party service providers. Third party fees include charges from banks, or wiring and delivery fees. United does not charge buyers for document preparation, loan tie-in, ordering of pay-offs for homeowners association demands, or fees for copying documents.

United Title proudly announces: “We are putting a lid on garbage fees.” They claim sub-escrow fees will not be charged if their company provides the title service. No surprises, no confusion.

Back East, escrow is referred to as “the closing,” and is implemented by attorneys who specialize in regional real estate transactions. Buyers are assured of clear title, and lenders, again, are guaranteed funds on a timeline. According to Rafael Castellanos, Managing Partner of Expert Title Insurance Agency in New York, without title insurance buyers risk total financial ruin.

“Your home is the largest single investment and [buyers] need to know the chain of ownership,” Castellanos says. For example, an old judgment on an old mortgage could render the property foreclosable. “The title company perfects the title or settles the claim. The other nice thing about title insurance is that it’s a one-time premium with a one-time charge but it is good for the life of the loan and thereafter,” Castellanos explains. Title insurance, paid at closing, is a two-fold product designed to protect the lender who partners with the buyer during the life of the loan, and furthermore, to protect the owner and any heirs.

Castellanos says title and escrow fees are based on a sliding scale regulated by the state of New York. The closing is adversarial; each player—buyer, seller, and title company—has its own interest. “The title company is retained to protect the buyer and the mortgage lender,” Castellanos explains. “We’re trying to cover any fraud that might be in the back-chain.”

As far as charges go, Castellanos explains how they are regulated by the state on a sliding scale: “The lower the purchase price, the lower the premium; you can’t vary a dime on it; and audits discourage price hikes,” he says.

Castellanos says sub-escrow fees, called garbage and junk fees in the West, could be tacked on to the buyer’s bill for searches, because back East there are buildings on the market from the 1800s that sometimes necessitate extensive title searches. Other search charges include flood and fire issues, sidewalk repairs, which Castellanos says are costly, and searches involving housing violations.

Bill Colby, branch manager of Bridge Capital in Orange County, California, where some of the country’s most expensive real estate is bought and sold, says the loan origination fee covers the bulk of escrow and title charges. Before the law shifted toward the buyer about four years ago, some fees were hidden for items that must now be disclosed. And before legislation required full disclosure of escrow fees, a percentage of monies from yield spread premiums often went into a direct lender’s pockets.

“These days there’s no such thing as hidden fees if disclosing per the law,” Colby says. “The origination fee is the biggest fee the buyer will pay for, for the broker to shop the loan.”

If buyers want to fully understand escrow charges, one way to decipher their bottom lines is to read the final settlement agreement, usually a one-to-two page legal size document. The secret lies in the longevity of the loan. If hidden costs, disclosed or otherwise, exist, they could be found in back-end fees connected to the origination charge, especially if buyers plan to dig in their heels for five years or longer with no-fee, no-point notes.

So don’t let loan origination charges get the best of you. Colby says, “Home purchasers, whether the point of sale is for investors or owners, can be pennywise but pound foolish when it comes to avoiding the origination fee.”

Allie Bullock-Kagamaster is a freelance writer, research specialist, technical editor of international engineering reports for Italian, Polish and Iraqi projects, and weekend reporter. You can reach her at americaneditor@yahoo.com.

May 6, 2005 12:02 p.m. EDT

As Home Prices Keep Rising,Fence-Sitters Decide To Buy

By DANIELLE REED
May 6, 2005 12:02 p.m.
Of DOW JONES NEWSWIRES

NEW YORK -- This year was supposed to be the year the housing market finally slowed down. But as interest rates remain stubbornly low, the housing market is showing no signs of doing anything of the sort - in March, existing and new home sales actually far exceeded expectations.

The low-rate, high price environment has created an interesting dilemma. It's caused home buyers who might have hoped for a price correction to rule out waiting and buy, rather than watch prices escalate even further. The capitulating buyers, in turn, may be part of what's keeping prices rising to levels that are higher than almost anyone expected.

Everyone from title insurance agents to real estate brokers to buyers and sellers themselves are talking about this phenomenon. "We've been wondering when it's going to stop and it hasn't," said Rafael Castellanos, managing partner of Expert Title Insurance Agency in New York, who noted that the average price for purchases has risen sharply in 2005. Buyers "are saying, `if we don't buy now we're not going to be able to afford this later,"' he added.

The distinct lack of any signs of a slowdown certainly influenced Penelope Ross's decision to purchase a home in East Hampton, Long Island, this year. "We don't know if there will ever be a downturn in the market," said Ms. Ross, a retiree. "To wait for prices to retrench in East Hampton might have been a longer waiting game than I was up for."

Following her agent's advice that homes in the Hamptons - where the 2004 average price was $819,000, up from $657,000 in 2003 - have been routinely selling for full asking price, Ms. Ross bid the full asking price on the home she bought rather than try to negotiate a discount.

"We have a joke around here about people who are looking but waiting for the market to change," said her agent, Diane Saatchi of the Corcoran Group. "We call them tenants."

     Buyer Psychology Similar From Coast To Coast

On the other coast, in the Los Angeles area, the news for buyers isn't much better. "We are not seeing a slowdown," said Cecelia Waeschle, an agent with Sotheby's International Realty in Malibu. In the greater Los Angeles area, where $1 million can be the price for a starter home, a frenzied pace of sales in the $1 million to $3 million range has been "driven by the fact that people were afraid interest rates were going up and afraid they might lose out on the market," she said.

In Florida, another state where double-digit price gains for several years in a row in some markets have led analysts to speculate the gains had to slow this year, agents said they haven't seen much in the way of a slowdown.

In Palm Beach, there were 66 home sales between October 2004 and March 2005, compared with 58 from October 2003 to March 2004, according to research compiled by Brown Harris Stevens. The average number of days homes stayed on the market fell 17% to 219 during the same period. And the average price rose nearly 60% to $4.6 million.

"Things are selling that had been on the market for over two years," said agent Carlie Seymour of Brown Harris Stevens in Palm Beach. "It hasn't sagged at all, it's amazing." Even in West Palm Beach, considered more affordable, prices have soared, she said. Homes in the El Cid area of West Palm Beach now routinely sell for $2 million and $3 million. As recently as seven years ago, the top price was around $400,000, she said.

     Tricks To Buying In A Swiftly Rising Housing Market

Still, while buyers are reluctant to wait around for a price correction that hasn't materialized in most markets, most are cognizant that buying in a fast-appreciating price environment has its risks. "Location counts to make sure you're not overpaying or you're in a better position if the market does start to decline," said Gary Simko, a human resources executive in New York who recently bought a second home in the Hamptons, Long Island.

Other things to think about to guard against overpaying should the market reverse are buying a property that can be used for different purposes - possibly commercial as well as residential - or one that can be expanded or subdivided, he said.

The best bet is "a property that could be something besides its current state," to improve chances of a quick, profitable sale should the market turn around, Simko said. After all, prices may continue to rise, but "there is no guarantee," he said.

-By Danielle Reed, Dow Jones Newswires; 201-938-2039; danielle.reed@dowjones.com

September 19, 2005
 

Medic shares lifelong love of city's great, green expanse
 

By PATRICE O'SHAUGHNESSY
DAILY NEWS STAFF WRITER
 

Hero of the Month spotlights those men and women, civil servants and civilians, who go beyond the call of duty to make New York a better place.

Rafael Castellanos' connection to Central Park is deeply rooted.

As a child in East Harlem, it was his playground and hangout. As a teenager, his affection for the park led him to join a bike patrol there, and he later spent a summer as a park ranger, falling in love with another ranger who became his wife.

He volunteered as an emergency medical technician when the Central Park Medical Unit was in its infancy, and for more than a decade he has been president of the ambulance corps that quickly responds to injured or stricken parkgoers and provides free medical service.

He's seen the park in its scary days, as a national symbol as a dark, dangerous place to get mugged, and has happily watched the renaissance of the green space that draws 25 million visitors and users a year.

And he has watched his medical unit grow to assist New Yorkers outside the park, such as during the blackout in 2003 and after the World Trade Center attack.

"There's no better feeling than to save somebody's life," said Castellanos, 45. "I love being in the park, and to make a difference in someone's life is a great feeling."

For donating countless hours of his own time to help make the park safer, Castellanos is the Daily News Hero of the Month.

"Rafael gets the macro vision of what's going on in the park, and he's always willing to step up to the plate," said Adam Kaufman, director of operations for the Central Park Conservancy.

"He set up our supervisors to get CPR training, because there are times when we're first on the scene. The medical unit is a fabulous organization, and it starts from the top down. I can't count how many times he's come before or after work to help us on big events, everything from the marathon to the Dave Matthews concert.

"Rafael is a real New Yorker."

Castellanos, a silver-haired, soft-spoken man, spends most of his weekends on park duties, but his Monday-to-Friday job is as a lawyer who owns a title company. His midtown office walls are lined with plaques and citations, starting with one he was awarded by the Police Department as a 16-year-old in recognition of his dedication to the park, specifically for trying to save a heart-attack victim.

"I lived at the northern end and I grew up in the park ... it was totally different then," he said. "When I was a kid, I'd sit on my stoop and watch my super's sons chase muggers away, and they'd run into the park.

"There was violence, drug abuse and the park got a bad reputation. People would get hurt. I felt bad, and I wanted to do more."

He joined the bike patrol in 1975. It was made up mostly of kids with two-way radios linked to the Central Park Precinct.

In the 1980s, he joined the Central Park Medical Unit, and as the years passed and the park became safer, most of the calls he went to were for sports injuries. "The big craze was bicycles, then joggers, then roller-skating and now rollerblading," he said. "People are always getting hurt. Some still don't wear helmets."

He said the medical unit was started by people who had a real love of the park. Twenty people patrolled on bikes, and one volunteer used his car. Thirty years later, the unit has three ambulances to patrol the 840 acres of the park.

There are 150 volunteers now, all certified EMTs. They work weekends and at special events, such as the Gates display, when as many as 300,000 people were in the park each day, and the unit handled dozens of people who tripped on the stands of the exhibit, or suffered exhaustion or cardiac-related incidents.

Each year, the medical unit transports between 1,000 and 1,200 people to hospitals, and administers treatment to about 2,000 in the park.

They respond, on average, is less than three minutes, because they know every inch of the park.

Castellanos goes out on an ambulance about once a month now; he mostly handles the business side of the unit, such as equipment purchases, fund-raising, dealing with state and federal health guidelines, and insurance.

"It's so much fun, such a great feeling to help, and once you save a life you never want to stop," he said.

"As long as I can do it physically, I'll do it," he said. "I love going out on the ambulance."

He also loves to take his family to a special spot in the park. "The lake [the Harlem Meer at 110th St. and Fifth Ave.] has always been my favorite."

A CLOSER LOOK

RAFAEL CASTELLANOS

Background: Lifelong Manhattan resident, attended Loyola High School, Fordham University, Benjamin Cardozo Law School.

Family: Married to Andria, they have two sons, Rafael, 14, and David, 9.

Pride Of The Park