Category: Real Estate

Five Common Misconceptions about Title Insurance

When it comes to purchasing a new home, you are making a long-term commitment with your money and your time. One oversight when purchasing is the consideration of the history of the home.  I do not mean the structural integrity of the home rather, the history of the legal title to the home. We are talking about the history of ownership of the land and the structure located on it. Title Insurance is a way of giving you peace of mind that you have full ownership of what you have just purchased, and that no monetary claims will arise from an individual or a business entity in the future. If that were to ever be the case, Tallgrass Title would have your back!

When it comes to Title Insurance, there are some pretty common misconceptions that might deter a buyer away from deeming it necessary. We want to help you navigate some of those misconceptions in order to make sure you are aware and get the coverage that you need.

If the Lender orders Title Insurance, the Buyer does not need to.

In most real estate transactions, the Lender involved will require Title Insurance. As discussed, Title Insurance protects from future claims of lack of ownership, liens, undisclosed heirship issues, ordinances, lack of right of access, etc. However, the insurance that the Lender requires only protects the Lender, not you as a Buyer.  Two separate insurance policies exist that Title Companies offer: a Lender’s Policy and an Owner’s Policy. Often, a Lender will require the Buyer to purchase an Owner’s Policy.  Most title companies offer a significant discount the the issue of simultaneous Lender’s and Owner’s Policies.

If I have Homeowner’s Insurance, then I do not need Title Insurance.

As previously mentioned, Homeowner’s Insurance only protects your home from damage caused by hail, fire and wind. Title Insurance protects your ownership and against aforementioned claims.

I have built a brand new home; therefore, I do not have to worry about ownership issues.

Although it is true that you are the very first owner of a home, the land that your home sits on has long been in existence and has had many previous owners. Title Insurance not only protects your house, but it also protects the land that your home is settled on!

Title Insurance is transferable from one owner to another.

While the idea that one owner can transfer Insurance to another does seem plausible, Title Insurance only covers specific owners of the specific property for their specific transaction for the duration of ownership. This coverage will end upon the transfer of the real estate, so each new owner needs to make sure they are protected.

Title Insurance is expensive.

When considering the amount of money being invested in your home, an Owner’s Title Insurance policy has very minimal cost, and unlike a Homeowner’s Insurance policy, Title Insurance is a one-time payment that protects you the entire duration of your ownership. Further, Kansas has some of the lowest title insurance rates in the nation.

Not only does Title Insurance protect you, but your Title Company will also be there to help you navigate through the milieu of Real Estate and give you the assurance you need while owning your home!  We are also here to answer your specific questions regarding what is covered.  This can at times seem daunting, but our trained professionals are here to assist in these regards.  That’s our job!

 

What Day of the Week is the Best Day to Schedule Your Closing?

In today’s market with interest rates so low everyone is looking to buy. Why is it important to pick the right closing day? What are the best and worst days to close? For most clients, the bottom line is “When will my proceeds check be ready?” or “When may I move into my new house?”

Any day is the best day to close!  You are purchasing a home and are anxious to move in or are ready to close on the sale of your home and eager to use the proceeds for another transaction.  However, based upon the hectic housing market and record transactions taking place, certain days may just not be as convenient for all parties as others.

We will start with the best days to sign. From a title and lender standpoint the best days are Tuesday through Thursday with the exception of the 1st, 15th, or last day of the month. No one really wants to leave work early, come in late or take a day off in the middle of the week to go sign a bunch of papers, right? But those are the least busy days for a title office or lender which for the client means more flexibility on scheduling the appointment, more time available to go over specific questions about the transaction, and a more relaxed atmosphere.

So why are certain days less ideal than others? The short answer is that Fridays just seem to be a popular day for closings. We are also seeing an increased volume of closings on Mondays as well as the 1st, 15th, and last day of the month. While closing can still take place those days, scheduling will not be as flexible, and the appointment may be restricted to a certain time frame due to the high volume of other transactions.

Another consideration to make is that picking a Friday to close could actually result in further delaying your transaction if something doesn’t go as planned or a funding number is not received by the close of business. If a Friday closing has to be delayed for whatever reason, the earliest it can occur would be the following Monday or even Tuesday if the issue that caused the delay cannot be corrected in enough time for a Monday closing. If Friday is your only option for closing, consider closing in the morning to ensure funding can take place before the end of the business day.

So when will the checks be ready? Most lenders have requirements to be met before authorizing the title company to fund each transaction. This can take anywhere from a few minutes to several hours. Rest assured that as soon as funding is authorized, we will issue checks and notify all parties.

For updates on your transaction, we offer Ready2Close. This portal allows clients to track the progress of their closing with a milestone tracker. Clients can also securely transmit and receive documents, e-sign certain documents, and access contact information for those involved with their transaction.

Happy Closing Day!

Are you Ready2Close?

We are happy to introduce the newest member of the Tallgrass Title closing toolkit: Ready2Close! Ready2Close is a plug-in to our title software that will work alongside PaperlessCloser and allows buyers or sellers to follow along with the progress of their transaction, from start to finish!
We will continue to use PaperlessCloser as the primary platform for realtors, lenders, attorneys, and admins to stay engaged with the transaction while Ready2Close will function as an additional piece that is both mobile and consumer friendly.

What does it do?

At your request, we will invite your buyer or seller to Ready2Close. Once in, they will see a photo from Google Maps of the property associated with the transaction. Users will also find a Milestone tracker showing the progress of their transaction. Just like ordering a pizza! 😉

Once the user clicks View Details, they will be directed to the other components of Ready2Close. Within Ready2Close, they can do the following:

  • Upload documents to be shared with Tallgrass Title, through a secure platform
  • Access details about their transaction including closing location, date, and time and contact information for their realtor, lender, and closing agent
  • Securely locate wiring instructions
  • Review and e-sign documents

Mobile Access

Ready2Close provides your buyer or seller with the ability to view transaction documents, e-sign, and obtain other details necessary for closing from their mobile device. While designed with the consumer in mind, realtors and other agents associated with the transaction can view all of their current files from one log-in and access requested documents in a mobile-friendly environment.

Security

Users must be invited by Tallgrass Title to create a Ready2Close account and to obtain access to a file.  Much like PaperlessCloser, we will identify which parties will be able to access specific information and will continue to protect your client’s non-public personal information. Your personal and your clients’ log-ins for Ready2Close will be protected by two-factor authentication.

What about PaperlessCloser?

Think of Ready2Close as buyer or seller’s PaperlessCloser. PC isn’t going anywhere, and we hope to harness both of these tools in sync to create ease and transparency in your transactions. If you’d like to give Ready2Close a shot on your next transaction, let us know and we’d be happy to invite both you and your client; you may find that you’d prefer to continue using PaperlessCloser exclusively or you might find you enjoy the mobile access and simplicity of Ready2Close. Or any combination of options. 😊

For Sale By Owner

If you’re a seller or buyer representing yourself, Ready2Close is the best way to stay in sync with the title company and up to date on all stages of your transaction. Give us a call and ask to be invited to Ready2Close on your transaction!

The team at Tallgrass Title is looking forward to providing a more transparent closing experience for the customer and we believe that Ready2Close is the next right step for making that happen.  Notifications will be sent whenever there is a status change to the file and clients have the option to opt out at any time.

If electronic document sharing and signing does not appeal to a party involved in your transaction, we are happy to continue to offer our free courier and mobile notary services. We will continue to do whatever we can to cater transactions to the unique needs of all parties involved.

Earnnest: the future of real estate transactions

Last March we introduced our partnership with Earnnest, a tool that allows for the fully digital transfer of funds (much like PayPal or Venmo) but made for real estate transactions! That means it was designed with safety and security in mind.

Earnnest provides a way for the digital transfer of client earnest money into the title company of your choice’s escrow account, verifies “good funds,” and distributes documentation of the payment and deposit to all parties.

How does it work?

The title company or the buyer’s agent can complete a request for earnest funds through the Earnnest app.  We are happy to complete this request on behalf of the realtor – just ask us!  In order to, we will need your buyer’s email, phone number, the property address, and the dollar amount. Your client will then receive a text and an email that “Tallgrass Title” is requesting funds.

     

Utilizing electronic methods of contract signing and delivery along with Earnnest allows your client’s new home to go under contract in minutes with zero travel and zero wire fees. The only cost associated with Earnnest is a $15 processing fee paid by clients when they complete the request.  With wire fees approaching $30 or $40, this saves you time and your client money.

What makes it secure?

Earnnest is partnered with the payment processor Dwolla, which sets up a secure connection between all parties with multiple levels of encryption. Earnnest uses Plaid to connect the buyer to their bank to complete the earnest money request and neither party obtains or stores your client’s bank account credentials or financial information.

It’s quick!

Once the buyer completes the request for earnest funds, all parties – the escrow company, the realtors involved, and the buyers – receive an email receipt verifying “Proof of Payment.” This tells us that the earnest money has been withdrawn from the buyers account, is verified as good funds, and is on its way!  Within 3 days, all parties will receive another receipt called “Proof of Deposit” – this tells us that the funds are officially in the hands of Tallgrass Title.  Contrary to how quick handing over a check seems, it isn’t always so fast.  Personal checks can take up to 10 days to clear the bank. Earnnest is the cleanest and quickest way to ensure the secure delivery of earnest money.

While entirely coincidental, adding Earnnest to our toolkit when we did was a gamechanger! Many of our everyday business practices have changed and we will continue to adapt as we move out of the Covid-era.  Adopting cutting edge tools for secure and paperless transactions will continue to be our standard.  We’re happy to utilize PaperlessCloser, CertifID, Dotloop, HelloSign, Earnnest, and another nifty product we’ll share with you in a couple of weeks that is going to make mobile transaction information and document access a reality.

Earnnest has even more to offer than we can cover here, if your curiosity is brimming, give us a call! Or you can check out Earnnest here! And if your client wants to complete their earnest deposit through Earnnest, we’d be happy to place the request for you or show you how!

 

Legals with Lippman – Part 2

Today we’re continuing our series Legals with Lippman!  In this series, our Production Manager, Sydney, focuses on topics related to real estate legal descriptions.  Sydney helps to make sense of plats (and replats), original townsites, water rights, condemnations, and how all of this affects you and your clients’ transactions.

Plats, Subdivisions, and Original Townsites, Oh my!

Of the three main survey systems, the Lot and Block System is one of the simplest. This system is often referred to as a plat and can further be referred to as a subdivision or original townsite. A Plat (also known as a plat map) is a record of a tract that takes a “metes and bounds” legal description and makes it into a simpler legal description, tied to a subdivision or original townsite. The Lot and Block system is often be used to identify individual lots, the block in which the lot is located, a reference to the platted land or subdivision name, and a description of the map’s recording information.

Many original townsites (like that of Manhattan as we see below) were created at the start of settlements when towns began to be formed. They are a simpler version of the subdivision plats seen today. They often give rough measurements of lots and blocks as well as setting out city roads and parks.

The Lot and Block system is one of the most recent used in the United States and became popular in the 19th century as cities expanded into surrounding farmland. Farmers and other owners of larger tracts of land would subdivide the property into a set of smaller lots to be sold individually. These subdivisions would then be filed with the county as a plat and often become known as subdivisions or neighborhoods.

Modern subdivisions have evolved quite a bit from the plat maps we see for original townsites. In addition to showing the individual lots, plats now include setback lines, easements, zoning, and other designations. This ensures that each lot has access to a public right of way as well as things like public utilities. An example of this can be seen in this recent plat of Rockenham Woods:

As you can see, the plat system has developed over time just like our towns and cities.  This continues to be for the purpose of keeping track identification simple. Stay tuned for the next Legals with Lippman to learn about replats and what that means for your land.  As always, if you’re brimming with curiosity about this topic or have a concern about a current transaction, give us a call!

Defining Deed Packets

Getting Deed Packets signed early is an essential part of the closing process. It helps your Closer calculate certain fees, pull payoffs if there are any, and makes it possible to verify information for post-closing tasks well in advance

There are quite a few documents in every deed packet and it might be difficult to remember what they all mean if your client asks, so today I will walk through our Deed Packets and what each document is used for.  As always, our team remains available to answer questions that you or your client might have about completing these documents. So don’t hesitate to give us a call!

Fraud Warning Fact Sheet

We use this form to make our clients aware of wire fraud and our partnership with CertifID to ensure that all wire instructions are verified and insured when the funds leave our office via wire transfer. Each statement will need to be read and initialed and then signed at the bottom.

Authorization for Release of Information (Payoff Requests)

This form allows us to request payoffs for existing mortgages in order to clear them at closing. The more information provided, the easier it is for the closing agent to obtain the payoff. Along with the signature line is a place to include the Sellers SSN and the date they signed the release.

1099 Tax Information Sheet

The top portion of this form will need to be filled out completely with the Seller’s Address, Phone number, and SSN or EIN. This will help us send out accurate 1099s the following January.

Proceeds Instruction Sheet

These are instructions for us to disburse the proceeds and how to get them to the Seller in the transaction. Once a selection has been made from the list we will need the form signed and returned with the rest of the packet. These instructions can always be changed by signing a new form with new instructions.

Authorization to Pay Commission

If there is a realtor, this one allows us to get the realtor paid at closing in the accurate commission amount as designated by the Agreement. It will need to be filled out whether there is a commission percentage or flat fee. If there is a Seller Realtor Admin fee, there is a place to include that as well and then it will be signed by both Seller and Listing Agent.

Homeowners Information Sheet

Not all packets will include this form. If the real estate is not located in a subdivision or we know that there are no HOAs in a certain subdivision, we will not include this. If it is in the packet, we will need to know if there are HOAs. If there are not, the “No” box will be checked and you can move to the next form. If there are HOAs then the “Yes” box will be checked; please complete as much of the HOA contact information as possible.

Authorization for Release of Information to Designated Realtor

This form will not change how we treat the transaction. Sellers have the option to direct us not to share their private information with the Buyers Realtor. If the top box is checked, directing us not to share information with anyone other than their realtor or lender, then we cannot and will not share a settlement statement with anyone, even those involved in the transaction, other than their realtor and lender.

NOTE: To prove commissions have been applied appropriately we can send a heavily redacted version of the ALTA settlement statement that only shows commission amounts and the Sellers signatures.

Covid-19 Notice of Possible Delays

This one is a notice that lets everyone know that there could be delays related to Covid-19 with getting documents recorded, back from recording and getting final policies issued.

Notary Instruction, Identification Verification and Notary Information and Certification

When documents are notarized, our office needs proof that the notary checked the identification of the signor and that the notary is in good standing with the state in which they are bonded in. It will also help in the event that we need to contact the notary if we have any questions regarding the notary’s information.

Affidavit as to Debts, Liens and Indemnity

This affidavit is a statement made by the seller that there are no liens or potential liens, or that no one holds an interest in the real estate that we would need to clear up prior to closing. This will need to be signed in front of a notary.

Limited Power of Attorney

We include a Limited Power of Attorney in all of our packets for Sellers to utilize. If signed it allows the realtor to sign settlement statements and any Buyer loan docs on behalf of the Seller. It is not required and is solely at the option of the Seller to sign.

Deed

The Deed varies as much as the transaction itself as to what kind of Deed is used to transfer the real estate. This will need to be signed by everyone who holds an interest in the real estate to complete a free and clear transfer. We hold the deed in our office until the transaction is closed and funds have been disbursed. At that time we record the deed with the county register of deeds to complete the transfer. The original will be sent to the buyer with the final loan policy.

In addition to the above, other documents may appear in a deed packet on a case by case basis.

Affidavit of Non-Production – Used to clear existing expired oil and gas liens.

Affidavit of Child Support or Spousal Maintenance – Used to clear divorce/child support cases.

Certificate of Trust – Used to prove the trustee signing has authority to sign.

Corporate Resolution – Used to prove the signor of a company has authority to sign on behalf of the company.

Affidavit of Death – Takes the place of a death certificate to clear title.

The earlier in the process we can get these documents signed and back to our office, the smoother we can make the whole closing process. Everyone in our office is a notary and we are more than happy to meet with clients to get Deed Packets signed.

We do offer a free courier service and can send someone to you to get everything signed if you just can’t get away. Just call our office and set an appointment for a time that works best for you.

Real Estate Property Taxes are Due Soon – Don’t Forget!

It’s property tax season! In Kansas, property taxes are due in arrears and paid twice a year. Taxes for the first half of the year are due December 20th of the current year; the second half of the year is due on May 10th of the following year. This means that unpaid taxes for the current year are considered delinquent as early as December 21st.

In order to avoid delinquency, we recommend paying before December 20th, otherwise you could encounter long lines or delays in processing your payment.  With varying restrictions due to Covid-19, be sure to contact your county treasurer in advance to see if an appointment is required to pay your bill or be sure to mail in your payment early enough to ensure it is postmarked prior to the due date.

Selling your real estate?

If your real estate is currently under contract, you may have very specific questions. Like, what if I am selling my real estate and the closing date is near the tax due date? How does our title company handle taxes? Do we pay them ourselves? Do we pay them at closing?

First, take a deep breathe. Then call your closing agent and ask them how they would prefer to handle the taxes.

If the closing date is prior to the due date your closing agent may prefer that you wait and pay the taxes through closing. If they are due after closing, they may encourage payment prior to closing to prevent late fees and penalties. Either way, if a payment is made your closing agent will need proof of payment in order to remove the payment from the settlement statement. Otherwise funds will be held in escrow and paid to the county by December 20th or refunded to the Seller upon proof of payment prior to December 20th.

How do I get proof of payment?

When paying taxes in the county office, the treasurer will provide you with a receipt for your payment. Hand deliver or email a copy to your closing agent and they will take care of the rest. If you mail in your payment, your closing agent can call the county and request the receipt.

If taxes are paid at closing, do I have to take the check to the county treasurer myself?

Nope, the title company will send a courier to the county and take care of getting them paid, you will not need to worry about the taxes getting paid we will take care of everything.

If you are unsure of next steps please feel free to reach out to our office. We can walk you through the process to make your closing as smooth and stress free as possible.

Electronic Signatures – are they secure?

In our current moment of social distancing and increased dependence on technology, many will question what is better:  wet ink signatures or electronic signatures. Some may debate that putting a pen to paper and scrawling their signature is a fool proof and tamper proof way to sign a legal document. You may be surprised to hear that electronic signatures through a program designed for just that, signing electronically, are more secure and oftentimes a better way to put your official seal on a document.

How can that be?

You receive an email asking for a signature on a document. You click accept, click to sign, select your signature, then complete the process. How in the world could that be more secure than a wet ink signature?

The programs designed for electronic signings are designed to pull multiple factors of authentication to prove that you are in fact the signer of the document. The records are retained and track the history of actions taken with the document, for example, who opened, viewed, signed and the location each action took place. When the document is completed a certificate of completion is attached to the document showing that all have signed with a time stamp, IP address and any other pertinent information to identify the signer. A digital seal is also attached to that document.

Signing in person is secure as well, however there are not multiple factors of authentication to prove that the signer did sign the document. There is no electronic witness proving the identity, location, or other identifiers provided by e-signing programs, that the signature was put on the paper by the authentic signer.

Both are secure, accepted ways of signing documents in the real estate world. For those who are less electronically inclined, wet ink signatures may be the way to go. For the more tech savvy folks among us, you may prefer clicking a button or using your smart phone to sign documents on the go. Whether you prepare in-person or electronic signings, we are here to help you through the process with helpful tools and friendly staff available to answer questions.

Legals with Lippman: Section-Township-Range and Land Surveys

We’re starting a new series on the Tallgrass Title blog: Legals with Lippman!  In this series, our Production Manager, Sydney, will be focusing on topics related to real estate legal descriptions.  Sydney will help make sense of plats (and replats), original townsites, water rights, condemnations, and how all of this affects you and your clients’ transactions.

Section-Township-Range Legal Descriptions (and Why Surveys Can Make Your Life Simple)

Legal descriptions are a graphic depiction of a property. They outline the boundaries and features of a tract of land creating a map.

Legal descriptions commonly start out with a section-township-range description (with the exception of “platted” ground which will be covered in a future post.) This type of surveying system was adopted in 1785 and is used throughout the United States.  Through this system townships and ranges are separated into sections, each section totals 640 acres and is one square mile, forming a grid pattern to help locate a given property. Townships run north and south while ranges run east and west. Each township range is broken into 36 sections making them 6 square miles.

Many legal descriptions start by dividing sections into quarters, halves, and quartered quarters. However, when real estate is broken down further, it can get a bit complicated. For example, suppose that in 1901 John Jacob purchased the NW/4 of Section 10, Township 10, Range 10. Then, John Jacob gave a portion of the property to each of his four children and each received a quartered quarter. Allen Jacob received the SW/4 NW/4 of 10-10-10. Allen wanted to pass this land on to his two sons but wanted the house to go to his daughter. This is where things can become less cut and dry. Allen decided to divide the property along a stream that runs halfway through the property. Everything North of this stream went to Bart, everything South went to Chester. Seems simple, until you take out the house and five acres surrounding. The five acres and the house are also along this stream. This is where a survey of metes and bounds legal description comes into play.

A surveyor will draft a legal description beginning at a designated starting point; also called a point of beginning. In this case it might be the southwest corner of the northwest quarter of Section 10, Township 10, Range 10. A particular degree and number of feet is then determined, and the legal description continues through a variety of angles and distances until it comes back to the point of beginning. This creates a map of the property boundaries.

After reading the above example, one can see that there are many instances where a survey is needed to produce a metes and bounds legal description. They can help resolve any possible boundary disputes, accurately determine the size of a tract of land, or to determine the location of any easements, setbacks, or other such restrictions on future development.

Surveys can also be extremely helpful when a legal description has become convoluted. Say John Jacob decided to sell half of the NW/4. Peter Crow now owns the N/2 of the NW/4. Peter then sells the South 10 acres of the N/2 of the NW/4 to Monica Chang. Monica sells four one-acre tracts off for housing development. Monica’s legal description is now the South 10 acres of the N/2 of the NW/4 of 10-10-10 less one acre less one acre less one acre less one acre. Having a survey done of the remaining six acres would  simplify her legal description. .

Dealing with legal descriptions can be tricky, that is why we are here to support you. If you have any questions about section, township, range legal descriptions or surveys feel free to contact one of our real estate professionals for guidance.

How Does Title Insurance Work?

Here at Tallgrass Title, we have discussed many topics about the nuts and bolts of real estate transactions: closings, probates, commitments, policies, etc.  But what is title insurance and how does it actually work?

Title insurance is essentially insurance that either insures that you actually own a tract of real estate and/or that a bank’s mortgage is valid and filed of record.  Title insurance, like other types of insurance, is governed by the individual state.  Insurance in Kansas is established and governed by state statutes that establish the types of insurance allowed to be sold in the state and various regulations governing the sale.  The major types are life, health, hazard, liability, property and title.  Further, Kansas Statutes establish the Kansas Insurance Department and Commissioner of Insurance. The Kansas Commissioner of Insurance is tasked with enforcing Kansas Statutes relating to insurance, licensing and regulating the sale of insurance.

When purchasing an insurance policy, an individual or entity enters into a contract with the insurance company.  The contract establishes the amount of coverage sold, the terms of the policy, exceptions to coverage and what constitutes a claim.  Kansas state law also establishes how fees are established and charged, how the money is accumulated, and who is entitled to the proceeds.  This ensures that when a claim (loss) happens, that the insurance company has retained sufficient funds to pay potential claims.  Otherwise, an unscrupulous company could sell policies and spend the premiums paid and then be without sufficient funds to pay a claim.  For example, if a consumer purchases a title policy insuring the person as an owner of the real estate with a policy amount of $100,000 and it is later shown that the property is actually owned by another party, a title insurance company is bound to pay up to the amount of $100,000 loss.  Now, there are a multitude of corrective measures and potential outcomes of any claim.  The bottom line is that a title insurance company is bound to hold a certain amount per $1000 of insurance sold for potential claims.

Kansas insurance statutes also require that reinsurance be purchased when a particular title insurance company’s “reserve” or “pool” is not large enough to cover the size of policy sold by the company.  This is done by purchasing reinsurance from another title company or other insurance company.  This protects the customer from an insurance company failing to have the reserves to cover certain sized policies.

In Kansas, most title insurance is sold through independent agents (including Tallgrass Title!).  An independent agent sells title insurance on behalf of a title insurance company, otherwise known as an underwriter.  An underwriter and independent agent enter into an agreement allowing the independent agent to sell its title policies with a certain division of the premiums.  Here at Tallgrass Title, we currently write title policies for three underwriters.  In our experience, each offers a unique product and the variety of options available allows us to better serve our customers.

In the end, title insurance is simply another form of coverage that specifically protects property rights.  Here at Tallgrass Title, we are proud to serve our customers in this regard.  This includes explaining any aspect of your real estate transaction or title policy.  If you have a question, feel free to ask one of our real estate professionals.  We love to talk title!