THE OWNER BUILT HOME & HOMESTEAD
(Page 5 of 15)
January/February 1971
By Ken Kern
After the homestead site is located, start the land transfer proceedings by first making an appraisal map. This map is drawn mostly from on-the-ground site inspection. It should show an outline of the property according to the complete legal description. Important topographic and natural physical features should be shown (such as streams, fields, wood lot, etc.) Any improvements such as buildings, fences or roads should also be indicated. A tentative homestead layout and land-use sketch can also be suggested on this map.
RELATED CONTENT
At this point it would be prudent to confer with any county officials who may be involved in passing approval on the land transfer transaction. First check with the Planning Office for possible zoning restrictions. Find out too about building restrictions. The County Health Department may have something to say about sanitation requirements. At the County Recorders office you can determine if the property can be legally transferred. Most states have land-division regulations and many counties require a legal land survey before property can be sold.
At this stage in the land transfer transaction you probably know your way around the county offices: County clerks likely know you by your first name. You, therefore, may as well do the title search on your prospective land. Title insurance companies customarily perform this service—for a generous fee. They issue a mortgage policy that protects only the value of the land. If you build a $20,000 homestead on an insured $1000 site, and a missing heir later arrives to claim the property and cloud the title, you recover only the $1000 from the title insurance.
The whole operation is costly and ridiculous because with very little effort you can determine yourself the legitimacy of your land title. Merely check the Tract Index in the Recorder's office. Some counties keep an Abstract of Title on record. This is a condensed history of all recorded transactions for the parcel of land that you are buying. By examining the abstract, drawing up a simple deed, and preparing a closing (payment) statement, you keep several hundred dollars from reaching the sweaty palms of Title Officer, Escrow Agent and Real Estate Lawyer.
The simplest method of land transfer is to have the seller supply credit to the buyer (if the transaction is not a clean, cash deal). Either a deed is given to the buyer with the seller taking back a mortgage, or the sale is made under an installment purchase contract. In this latter case the legal title remains with the seller until all or a specified portion of the purchase price has been paid. The Contract of Sale is preferred over the mortgage contract. In cases of default, the mortgage contract requires an expensive foreclosure sale; a contract of sale is merely terminated.
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