Category: Uncategorized

Closings with Karissa: Split Closings

What is a Split Closing?

If you are a Buyer, Seller, Real Estate Agent, Banker, Lawyer, or Developer in the area, you may have heard a new term being used in the Manhattan, Kansas area real estate market.  The term is “split closing.”  What is a split closing? How does it work? Is it a good thing for myself or my clients?

To explain a split closing, it is necessary to start with how a traditional closing usually works in this market.   Typically, the Listing Agent will identify a title company for the MLS that the Seller has selected.  In a For Sale By Owner (FSBO) transaction the parties will discuss a title company to handle the transaction.  Buyers then decided make offers on a particular property and accept the Seller’s title company or offer to close at a different company. The order then goes to that title company on the contract that is signed by all parties to coordinate the title work and closing.

 

 

 

 

 

 

 

So what is a Split Closing?

A Split Closing is where the Seller chooses one title company, and the Buyer chooses another title company. The Seller’s title company will prepare a deed packet and handle the Seller’s side of the transaction.  At the same time, another title company is representing the Buyer and most often their loan process.  Then, the day of close, the Buyer’s close at their title company and the funds are typically wired across town or disbursed by the Buyer’s company.  The Seller’ title company then issues an owner’s title policy and the Buyer’s company issues a loan policy.  Sound confusing and costly?

 

Then why would anybody choose to do a split closing?

This option is popular in some markets for whatever reason. However in the Flint Hills area it is less popular. The closings are more complicated with so many parties involved. Money has to be moved from one company to the other, opening up the possibility of a high chance of wire fraud. Additional releases may be required to share client information and it can end up costing more for the Buyers in the long run due to not being able to take advantage of the simultaneous issue loan policy premium. Most often, split closings duplicate costs, is confusing, is less efficient, and causes a lot of headaches.

 

What if one of the parties does not live in your service area? That is not a problem 😊 Tallgrass Title has a solution!

There are many options available for closing and keeping the transaction all with one title company.

Mobile Notary – We can arrange for a mobile notary to sign with Buyers and Sellers anywhere in the country.

Remote Closing – We can set up a signing appointment with another title company or Attorney’s office closer to the signer’s location.

RON – Remote Online Notary is currently revolutionizing the title industry. It allows for a notary public to meet with the client online in a virtual closing room to sign documents electronically. This option is typically the most cost effective and the title company receives the documents quicker than with the other two options.

*Tallgrass Title utilized a RON signing platform that allows us to act as the notary so our clients get to meet with their Closing Agent to sign documents.

 

Choose a title company that is looking out for you. 

Tallgrass Title is dedicated to providing exceptional service and support to our clients. We understand that Selling and Buyer a home is the biggest monetary life event you will ever go through. Pick a company where you feel comfortable and welcome.

For additional information on split closings or other title/closing related topics feel free to contact us. We are here to help make this as smooth a process as possible.

Federal Tax Liens: What they are and how they affect real estate.

Federal Tax Liens: What they are and how they affect real estate.

When title companies research property, we conduct a search of public records for previous owners and transfers of title (back at least 25 years to meet the Marketable Title Act practices), outstanding mortgages, unpaid taxes, and many other items that may affect title to the property.  You may not know, but we also search for liens, judgments, and encumbrances of all parties to the transaction that may affect title to the property.  There may be an outstanding mortgage or unpaid taxes to pay off at closing, but sometimes state and federal tax liens can show up in court cases or Register of Deeds searches.  When taxes are not paid or a governmental entity determines there is a deficiency in the amount paid, the state and/ or IRS can file a lien on the title owner.  These liens attach to ALL property owned by the vested title owner, and yes, this even includes inherited property.  That being said, even if the lien does not specifically reference the real estate being sold or purchased, if the seller or buyer has a federal tax lien filed against them, we need to make sure all lien(s) are paid off at closing, so they do not attach to the real estate.

 

 

 

 

 

How long can these liens hang around you ask?  Federal tax liens are self-releasing liens, meaning they automatically drop off; however they can stay in effect 10 years past the last day for refiling.  Best practices and according to the law, the liens can be reinstated up to 30 days past this.  Long story short, when having a title search done, you can trust that we will diligently search the property and parties involved to insure a clear title.

 

By: Angela Turner

Party at the Principal!!!! Wait…what?

Recently, the Tallgrass Title team, a/k/a “Title Squad” took a trip to the 6th Principal Meridian (6th P.M.) as it intersects the Kansas-Nebraska border.  This geographical location has important significance to Kansas title insurance professionals as all legal descriptions in Kansas, at some point, contain a reference to the 6th P.M.

The 6th Principal Meridian is a north-south surveying line that intersects Kansas and Nebraska and is the basis for all legal descriptions in those states as well as portions of Colorado and Wyoming.  When the first surveyors began the process of surveying real estate in Kansas, they set a marker on the Kansas-Nebraska line and all real estate descriptions in Kansas begin at that point.   If you are east of this line, all legal descriptions will end with “east of the 6th P.M.” and if you are west of the line, well, you get the point.  It begins at the north border of our state and travels south through the towns of Solomon and Wichita.  In fact, Meridian street in Wichita marks the location of the 6th P.M. as it travels through the city.

At Tallgrass Title, we deal with legal descriptions of real estate with every transaction.  We have often joked about the location of the 6th P.M. and commented in jest that we should take a field trip to visit the marker.  Well, a few days ago we did just that!  The Title Squad loaded up and traveled to

visit the marker near Mahaska, Kansas.  Amazingly enough, it just so happens to be located on Meridian Road.  Party at the Principal was a great day of real estate education and fulfilling our office promise of visiting the 6th.

 

 

Inspections in a Residential Home Purchase

Imagine you are considering purchasing a new home. You may not be the most construction-oriented person or know exactly what to look for when purchasing a home.  Additionally, your financing may require that you have a home inspected prior to being qualified for funding.  Lastly, you may just feel more comfortable having experts look at your potential purchase and point out potential problems before they become, well, your problems.  After all, for most Americans the family home is the single largest investment they will make during their lives.  The purpose of this post is to describe the inspection process and the common and important issues that often arise.

Prior to purchasing real estate, most buyers (the smart ones at least) will take a look at the real estate. Either they have the knowledge to identify defects in the improvements to the real estate or they hire a person to assist them.  Another option is to inspect the real estate after a contract has been signed by the Seller and Buyer.  It is important to note that if this is the intent of the parties, the contract must specifically give the Buyer the option to inspect the property and to request repairs of unacceptable conditions if they are found.

Prior to entering into the contract or after entering into the contract (whichever the case may be) and during the “inspection period”, inspections are made. At this point, a home inspector is hired and gains access to the home in order to perform the task.  The inspector will look at a multitude of items to gather information regarding the condition of the home.  This information will be compiled in a report that is provided to the buyer.  The report will identify items of various concern and make recommendations for repair, when needed.  Major items to be inspected consist of the foundation, walls, roof, mechanical systems, plumbing, electrical and the layout of the site.

Additionally, if a loan is being procured, a termite inspection will most likely be required. This is typically performed by a different company than the home inspection.  A pest control technician will inspect the house for termite damage and active colonies and make recommendation for treatment, if needed.

Another inspection common to this region is radon testing.   Radon gas is an odorless and harmful gas that seeps into homes and can cause health problems from prolonged exposure.  For more information regarding radon issues when buying and selling your home, please refer to this link: https://www.epa.gov/sites/production/files/2015-05/documents/hmbuygud.pdf

After the inspections are made, a buyer should review the reports and determine whether there are issues of concern to the buyer. For example, if the roof requires replacement, is this in the buyer’s budget?  Is it an unacceptable condition to the seller that will require replacement before moving into the home?  Will the seller either replace the roof or pay a portion of the repair?  Will your bank still finance the transaction if the roof is not replaced?  Again, your real estate agent can assist you in navigating these concerns.

There are many licensed home inspectors, pest control technicians and radon testing and mitigating outfits in the Tallgrass Title service region. If you are unsure which inspector to hire, it is recommended to work with your realtor or banker to identify an inspector to assist you in your transaction.  In any event, buyers should always educate themselves about the home they are purchasing and protect what may be their largest investment.

Reading Your Title Insurance Commitment

A commitment for title insurance is a report your title company prepares containing information about your current or prospective real estate. If the requirements of the commitment are met, we are bound by law to issue you a “title insurance policy.” The policy is ultimately what insures your ownership in the real estate. However, the commitment is the document you will receive prior to closing. After entering into a contract, you will receive a commitment from your title company. This is your opportunity to understand whether there are any defects in the title or whether there are certain liens or easements that will prevent you from purchasing the real estate.

The first few pages of your title commitment will include a commitment jacket full of standard information and a privacy policy that is not transaction specific. I have omitted these pages from this post to focus our attention on the information about your real estate. The below diagram points out the highlights of your commitment.

Even with this diagram, understanding a title commitment can be confusing. If at any time you have questions regarding your title commitment or any phase of the transaction, please feel free to contact our office. We are here to help and answer any questions you have. That’s our job!