Category: Real Estate

Email Fraud – the Everyday Scam

Over the last couple of years, there has been a growing concern about email hackers, scammers, and phishers. Here at Tallgrass Title we receive fishy-looking emails on a regular basis. Our title agents go through regular training sessions to help detect these potentially dangerous messages. In order to help you protect your clients and yourselves from these pitfalls, we would like to share some things we have learned.

Here are some red flags that usually indicate an email is not legit:

  1. The message contains grammar and punctuation errors. A lot of emails coming from scammers sound like they come from someone living in a foreign country. If the language does not make sense to you, don’t follow their instructions.
  2. The sending email is usually misspelled, even it it’s just one letter missing or added to it. This is a big one and is easily missed since it is so small. Instead of order@tallgrasstitleks.com you may see order@tallgrastitleks.com. (See, it can be very difficult to detect…)
  3. If you hover over the sender’s email address, it may show a different address. The email may say “from: order@tallgrasstitleks.com”, but when you move your cursor over it, there is a different email address or a whole string of random letters and characters.
  4. Another thing that should be an immediate cause of concern is any phrase that conveys a sense of urgency. Phrases like “do this immediately” or “as soon as possible” are often used. Also, the message might ask you to do something sooner or in a different order than you expected.

Here are some actions you can take:

  1. Google the company name in the auto sig. Does the address under the signature match the information on the company website?
  2. If you ever get a feeling that an email just doesn’t sound right, call the sender. Remember that you might not want to use the phone number listed in the suspicious email. Try to use a number you already have saved from before. Most people will be reasonable about it as soon as they realize that you are trying to protect them.
  3. Never send a client’s contact information or other personal information by email without protecting it. For example, do not email a completed deed packet back to us with the 1099 form. If the 1099 form has been filled out, it will have your client’s Social Security Number, address, and phone. This is a good opportunity for a scammer to steal your client’s identity!
  4. Use our paperless closer program to send documents to us. Access it through the client login on our website, www.tallgrasstitleks.com. We are able to view the document as soon as you upload it.
  5. Educate your clients. Go ahead and mention to your clients that there is a concern about this. Let them know a couple of things to watch out for.

Here at Tallgrass Title we are very serious about protecting our client’s information. Something very important to remember is, we will never ever email wire instructions without password protection. If someone emails wire information to us, we will call the sender to confirm. Please be sure to contact us if you have questions or concerns about a message you have received. We are always happy to take a phone call to confirm any instructions or requests we have sent to you.

Intro to 1031 Exchanges

Sam and Mary Lou bought a pasture in 1972 for about $20,000. They are ready to sell it now and know that someone would pay about $80,000 for it. They will incur about $60,000 of capital gain and will be subject to tax on this amount. At the same time, they would like to purchase a pasture closer to their home. Luckily for this couple, the IRC (Internal Revenue Code) allows for real estate owners to defer capital gains tax through a like-kind exchange.

What are the steps involved in a 1031 exchange?

The first step is to hire an attorney or some other appropriate professional who can assist you with the exchange. There are certain documents needed to facilitate the exchange and you will need someone to draft those for you.
The second step is to complete the sale of your real estate. The real estate sold is called the relinquished property. If you are using a real estate agent, tell that person as soon as possible that you are doing an exchange. The most important part of the process is that you cannot receive the proceeds from the sale of your relinquished property. The title company will send your proceeds from the sale to a third party to hold until you purchase your replacement property. If the proceeds are given to you, they are immediately taxable.
The third step is to identify your replacement property and complete the purchase. During the closing, your title company will collect the proceeds from the third party, then apply them towards the purchase price.

What are some things to keep in mind about a 1031 exchange?

There are many rules governing 1031 exchanges. You do not need to learn all of them; a professional can help guide you through the process. Here are a couple of things to keep in mind:
A 1031 takes some time to happen. If you are thinking about doing one, you should talk to a professional as soon as possible. Don’t wait until the week before closing to talk to someone about it, because it could cause delays.
There are certain deadlines after closing that must be met. There is a deadline from the sale of your relinquished property to identify your replacement property. There is also a deadline from the sale of your relinquished property to complete the purchase of your replacement property and officially complete the 1031 exchange.
There are also requirements for the type of property that qualifies for this treatment. The basic rule is that the property must be “investment property”. The IRS has very specific rules for what qualifies as investment property.

A 1031 transaction can sound intimidating, with a lot of information to remember. At Tallgrass Title, our closing agents are specifically trained on how to handle your 1031 exchange.

Digital Order Submission, Courier Service and Drop Box, oh my!

At Tallgrass Title, our goal is to make your transaction or refinance as smooth and convenient as possible.   We understand that the daily life of a home buyer or seller can be quite busy.  Real estate agents can often be juggling multiple transactions while assisting several clients.  Likewise, bankers and lawyers can find it hard to physically bring documents to one of our offices.  The purpose of this post is to illustrate several order submission and document delivery options that Tallgrass Title has put in place to ease the process.

To assist in the process, we have several options to submit orders or deliver documents to our office. With technology rapidly developing, the simplest way to submit an order for title insurance is through our Paperless Closer system.  Simply upload an order for title insurance or upload a contract directly to our system.  An earnest money check can then be delivered to our office during office hours or deposited in our new 24-hour drop box at our Wamego, Kansas location.  Additionally, our website has an additional portal for submitting an order if you have not yet set up a Paperless Closer login with our office.

Tallgrass Title also offers a free courier service in our primary service area of Riley, Pottawatomie and Wabaunsee Counties. For example, our couriers will travel to Manhattan, Kansas to pick up documents needed for your real estate transaction.  Additionally, we will deliver proceeds checks or commission checks wherever needed.  Our courteous couriers are all licensed and bonded notaries as well.  So, if a deed packet needs to be executed in front of a notary and returned to our office, simply call for our courier service.  We strive daily to make the title insurance and real estate closing process as simple as possible.  We want to know if there is a way that we can make the real estate closing process easier and more streamlined for you.  Should you have any ideas or suggestions that will help the process, please feel free to let us know.  Remember, we work for you!

To Divide to not To Divide Rural Acreage

Rural real estate is most commonly sold in single tracts. Occasionally, people wish to sell a portion from a larger tract.  In this scenario, the transaction can become a little “sticky” for a number of reasons.  These reasons could be as complex as county or city zoning, or as straightforward as a lack of access.  So, what are some items to look into if you are going to be splitting land?

Boundary Lines

In most cases, when real estate is being divided, a survey will be required. The survey calculates and sets out very specific boundaries.  Usually the Surveyor will place markers to clearly mark the corners of the real estate.  The surveyor will then produce a formal “Survey” which is essentially a diagram of the real estate.  Additionally, a “legal description” will be produced which is a written description of the real estate.  It is important to work with your surveyor so that you know the costs and timelines for the completion of this work.

Zoning

A common misconception is that if you own land you can do whatever you want on it. Unfortunately, it does not always work like that.  No matter where you live, you will have to face rules and regulations regarding zoning.  There will be rules and regulations that are similar from County to County, but there will also be County specific zoning requirements.  No matter what you are doing, make sure that you research your local zoning requirements, otherwise, you may start a transaction you are not allowed to finish.  Are you allowed to divide the land?  If so, is any special documentation required?  Is there a minimum tract size that the county requires?  These questions and more can be answered by your County Zoning Administrator or your City Planning and Zoning department.

Fencing

In Kansas, the owner of rural real estate may be required to fence and or maintain an existing fence. If the real estate that is being divided is fenced, the new owner could be responsible for a portion of the construction and maintenance of a new fence dividing the property.  It is essential to investigate the costs of such construction and maintenance.

Access to the Property

How will you access the divided tract? Click here to read our last post that deals in part with access to rural real estate.

As you can see, there are a lot of issues to consider when splitting off tracts of land from a larger piece.  However, it can be done.  Most real estate professionals will have some idea of what some basic county requirements are for your area, or they can put you in touch with the people who are tasked with enforcing such requirements.  If you are considering dividing real estate, give us a call.  We are here to help you navigate your real estate transaction.  It’s our job!

Building on Rural Real Estate

Many Kansans in our area have a desire to construct a home on real estate lying outside of a city and outside of a “platted” subdivision. The country can lend peace and tranquility to the setting and offer some of the Flint Hill’s most gorgeous views. Additionally, living in a rural area can offer the freedom to pursue rural hobbies like raising animals, having a large garden and having s’mores by a bonfire.  However, there are a few things to take into consideration when moving forward with this dream.

Location of the real estate

Where is the real estate? Finding the right mix between rural and city dwelling is a common issue future homeowners must weigh.  Although rural life may be the goal, it is necessary to determine how far you want to live from modern services. Is the real estate located on pavement or gravel?  Does the county have any plans to pave the gravel?  How well maintained is the road?  Is it passable in all weather?

Another question regarding location is applicable zoning. If you are not purchasing an entire tract of real estate are you allowed to divide off a portion to be purchased?  (Keep an eye out for next week’s blog where we will discuss issues regarding dividing real estate from a larger tract.) Are you allowed to construct a single family dwelling?  Do you have the requisite acreage for a septic system or lagoon?  Will the ground support a foundation, septic system, driveway, etc.?  These questions will need to be addressed prior to beginning the construction process.

Access to Land

Believe it or not, lack of access can be an easily overlooked issue. Simply put: how does one access the purchased tract?  It is important to look into the zoning requirements for a driveway or travel easement.  Oftentimes an easement will be needed to cross neighboring property to access your building site.  Also, does zoning allow two addresses to use the same driveway?  Will the county allow you to create an access point to your real estate where you want it?  It is important to address access concerns, because, if there is a lack of access, and no one is ready to give an easement, what is the point in purchasing the tract?

Access to Utilities

An often overlooked issue is the access to modern utilities like water and electricity. In town it is easier to bring city water and electricity to new build cites and for the new sewer lines to tap into the city sewer system.  However, in the country, it can be more difficult. Here are a few common questions to answer:

  1. Is electricity available at the site? Is it a rural electric cooperative or an electric company? How much will it cost to run the electricity to the divided property?
  2. Is water available? Is there a rural water district? How far is the closest line? Is there adequate capacity for a new structure? If rural water is unavailable is a well an option?
  3. How will sewer waste be handled? Is a septic tank or lagoon an option?

As you can see, the simple rural life could prove to be confusing during the acquisition and build process. Luckily, we commonly deal with these issues and are eager to assist in answering these questions.  It’s our job!

Understanding the Title Commitment – Part 2

Towards the end of the Title Insurance Commitment, you will find a list of “Exceptions from Coverage”. This list appears in Schedule B – Section II. The Standard Exceptions are general and appear on every commitment. However, many of the Additional Exceptions are specific to your tract of real estate. Here are some common types of documents that show as Additional Exceptions:

  1. Plat

A plat is a picture of a subdivision. It is basically a drawing that shows the shape of the lots, and where the roads are. Many also show utility lines and easements originally planned by the developers.

  1. Restrictive Covenants

Restrictive Covenants list any restrictions on lots located in a subdivision. The purpose of these is to ensure that the owner of each lot can enjoy his real estate without causing annoyance to his neighbors. Many of these documents also contain rules concerning the upkeep and appearance of the subdivision. For example, these may include specific guidelines on what materials or color(s) are used for your house. They may also contain rules about fences, additional structures, or vehicle parking. These documents may include information about setting up a Homeowner’s Association (or HOA).

  1. Oil & Gas Leases

In certain parts of Kansas there is active exploration and production of oil, natural gas, and other natural resources. In the past, there were many oil and gas leases given, but a good number of them did not result in any actual activity. Additionally, many of them were for a certain number of years and the terms have already expired. Most of the leases we see on property searches today can be dropped off from the policy by a simple affidavit signed during closing. For more information on oil and gas leases, click here to view a blog we posted earlier this year.

  1. Ordinances

An ordinance is a public declaration made by the city. These may have some effect on your real estate, depending on what type of ordinance it is. For example, the document may provide for the installation of water lines or sidewalks.

  1. Easements

Easements give other persons the right to use your real estate for a specific purpose. A very common easement is an “ingress/egress easement”. This allows someone to travel across your real estate usually to access real estate they own adjacent to yours. Another very common easement is a utility easement. These agreements allow electric, natural gas, or other specified companies to construct or maintain utility lines. Most easements contain language saying that the easement will “run with the land”. This means that when you sell your property, the new owners will have to honor the easement. As mentioned above, an easement is for a particular purpose. As the owner of the real estate, you do have the right to make sure that the person using the easement isn’t trespassing on or causing damage to another part of your real estate.

As you review your title insurance commitment, please remember that you can ask for copies of the documents that are listed. At Tallgrass Title we are happy to answer any questions to help make your transaction as smooth as possible.

Early Work = Smooth Closings

In the early stages of the closing process your closing agent will put together what we call a Deed Packet for the Seller to sign. The deed packet consists of many of the documents we need to close your real estate transaction. Not all deed packets are the same.

However, all deed packets will consist of at least a Deed, an Affidavit as to Debt, Liens and Indemnity, and a Seller 1099 Information Sheet used for taxes at the end of the year. Additional documents as needed will often appear. If there is a current mortgage, your closing agent will ask for an information release. This is so our office can receive a current payoff on any existing mortgage. There may also be other affidavits to clear exceptions from the final policy. If you are working with a realtor, there will be documents authorizing Tallgrass Title to pay the realtors at closing or to give your realtor permission to sign documents on your behalf. New to our deed packet is a Proceed Instruction Sheet that instructs us how to deliver the proceeds due from your sale.

As a Buyer, you may receive inspection invoices or invoices related to work performed on your new home. It is equally important for our office to receive invoices as soon as they are available. Your closing agent needs these invoices to ensure that all the work done on the real estate is paid in full and there are no outstanding liens attached to your real estate.

Returning the signed deed packet and forwarding invoices as early as possible helps make the closing process go smoothly. Your closing agent will then have time to prepare for the closing and to get ahead of any issues that may arise.

Tallgrass Title is here to help in any way we can to stream-line the closing process for you. We offer courier and notary services to our clients and are available for any questions you may have about the closing process. If for any reason you or your realtor are unable to come to our office to deliver a deed packet we are more than happy to come to you. That’s our job!

Paperless Closer: Top 5 Power User Tips

Here at Tallgrass Title we work hard to make the closing process as hassle-free and convenient as possible from start to finish. One of the tools that we have been providing for years is Paperless Closer. Access this program via the “Client Login” link on our website and provides a secure portal for sharing documents. Not only do we post the commitment, contract, receipts, and closing documents to it, but realtors can use it to send documents to us.

Here are 5 tips to become a Paperless Closer Power User:

1. Use the “New Order” button on the main Lobby page to submit new orders. Fill out the basic order information, like the property owner’s name and the address. As soon as you hit the submit button, an alarm goes off on our end. You can also leave a note on the form to have our courier come pick up the earnest money from your office. As soon as the check arrives at our office we will post the receipt to paperless closer.

2. View tasks assigned to you. On your homepage, you can view any tasks we have assigned to you. The task may be a reminder to submit an invoice for an inspection, so we can pay it during closing. Usually, we use this to remind you of tasks that aren’t a standard part of every closing process. For example, if there is an additional document required like a rural water payment book, we may schedule an activity to remind you and us to make sure it gets done.

3. Use the Status dropdown tool to view closed files. We understand that realtors are audited periodically. If you forgot to get a copy of one of the documents you need, use this tool to complete your set.

4. View the name of the assigned closing agent and his/her contact info. Don’t know who to send invoices or questions to? Find the name of the closing agent and click on the E-mail link to send a direct message.

5. Use the “Closing Disclosure” button on the order page to view the document draft. Want to make sure a particular fee will appear on the Closing Disclosure? Use this button to view the current draft of the document.

Call us at (785) 456-2779 to create your account today! It takes less than 5 minutes to set up a new account and grant access to a file. Should you experience any difficulty at any time in locating your file or viewing documents, just send a quick email to order@tallgrasstitleks.com. We monitor this email address 9 hours a day and our goal is to respond to assistance requests within minutes! Most paperless closer troubleshooting issues are resolved very quickly and easily. Also, we understand that technology can be frustrating. If you would like further instruction on this program, contact our office to set up a training session at your office. It’s our job to make sure you are comfortable using this tool.

Why are Certified Funds required in a Real Estate transaction?

What are certified funds?  What are the differences between a “cashier’s check, bank money order, personal money order, cash, check, wired funds or ach?”  I’m buying real estate and my title company wants me to bring “cash or equivalent” or “certified funds.” Why? Why can’t I just write a personal check?  The money is there!  Does somebody stamp my hundred dollar bills as “certified?”  What bank is going to give me $200,000 in hundred dollar bills so that I can buy my house?  Do I need an armed guard?

Relax! The purpose of this blog post is meant to give a simple explanation of why “certified funds” are required in your real estate transaction and how to acquire and present them to the title company.

Certified funds are just that. They are certified to be good, guaranteed, valid, and non-revocable.  Here are the different types of certified funds:

  1. Cashier’s Check
  2. Bank money order
  3. Wire
  4. Cash

Simply put, once a cashier’s check or bank money order is issued by a bank, it cannot be recalled or cancelled by the bank.  The bank that wrote the cashier’s check or bank money order must by law, honor and pay the amount due in the document.  Therefore, it is the same as handing a person the equivalent amount of funds in cash.  Personal checks or personal money orders can be cancelled if it is determined that there is an issue with the check or the underlying funds.  Therefore, personal checks or personal money orders must “clear” the issuing bank before the payment is deemed absolute.  This could take as long as a week or more.

A wire is a method of transferring funds between two banks.  Once the wire has left the issuing bank and has been deposited in the receiving bank, the transaction is complete and final.  The funds cannot be returned without the approval of the recipient bank and underlying customer.

Cash is, well, cash. It is absolute funds, and value has is transferred immediately to the holder.  There is no issuing bank to recall the funds.  It is the absolute transfer of value when given from one person to another.  However, we highly recommend not paying for your house in cash. And so will your bank when you request $200,000 in cash to buy your house!

Certified funds are required because it assures that the funds are good and valid and present at the closing of the transaction.  A closing is set for a certain day and if, for example, a personal check is presented, the title company will have to wait at least a week before giving the seller their proceeds from the sale.  If the seller does not receive his proceeds for a week past the closing date, well, the parties have not really closed on the agreed upon date, right?  In order to ease this issue, your closing agent will require certified funds so that she may disburse proceeds to the seller, commissions to agents, filing fees, etc.  Certified funds give the closing agent the assurance that she is holding good funds and is clear to let money go to the various parties entitled.

When you are ready to complete your real estate closing, you will either pay for the real estate from your own money, borrow funds, or a combination of the two.  If you borrow the funds, most likely your banker will either give you a cashier’s check to deliver to the title company or simply wire the funds on your behalf.  If you are responsible for a portion of the funds, you will need to request a “cashiers check” or a “bank money order.”  Depending on your bank, either term may be used.

Buying or selling real estate is a major investment and can potentially cause you stress.  Our goal at Tallgrass Title is to answer your questions about certified funds or any other aspect of your transaction.  Its our job!

Importance of a Real Estate Agent in a Transaction

How do I negotiate a contract? What does “in escrow” mean? What is an appropriate “counter-offer?”  How much will my proceeds be from the sale of my house?  What the heck is title insurance and who sells it?  Which title insurance/closing company should we use?

An American’s home is his or her largest investment. The majority of us do not regularly purchase and sell real estate.  For this reason, the purchase or the sale of your house can be incredibly stressful.  Real estate agents or Realtors are real estate professionals that navigate through these tough questions daily.  Real estate agents are not just salespeople.  In fact, I would say that the majority of a real estate agent’s experience is in assisting a buyer or seller understand the transaction.  An agent will help you write a contract for purchase of real estate, advise on technical terms, and assist in making offers and counter-offers.  Additionally, an agent may help in coordinating financing for the purchase of real estate.  One must remember that a real estate agent has studied the profession and is licensed and works in the profession.  An average homeowner in the United States will usually own less than five homes in his or her lifetime.  This will most likely result in many years passing between sales and purchases.  It can be difficult to remember the details of a smooth transaction in these gaps.  Additionally, Americans are becoming more mobile across state lines and internationally.  A homeowner may understand how a real estate transaction takes place in Louisiana, but a Kansas transaction will have its own unique issues.
In addition to assisting homeowners in the art of negotiating and closing real estate transactions, real estate agents understand the market.  Understanding what the market will bear is invaluable in a real estate sale or purchase.  Real estate agents work in the field, they assist in sales constantly, and they know what property is worth.  As a Seller, you will be tasked with setting a list price for your home or real estate.  Your agent will know strategy for setting a listing price.  Additionally, as a Buyer, you will at some point make an offer on a house.  An agent will advise whether the price you would like to offer is appropriate or likely to result in a purchase.
Lastly, as title insurance professionals, we work with real estate agents on a daily basis.  They are incredibly valuable in the transaction process.  Real estate agents assist in securing signatures on various documents, coordinating closings and financing for their clients, and directing the disbursement of funds for various costs.   For these reasons, Tallgrass Title is a proud affiliate member of the Manhattan Association of Realtors which covers Riley, Pottawatomie, Wabaunsee, Marshall, Clay and Washington Counties.  Here at Tallgrass Title, we believe in the importance of real estate agents and encourage all buyers and sellers to work with a real estate agent in their transactions.