A common cause for the sale of real estate is when an individual passes away. As a listing agent preparing to list and market the real estate, it is important to answer a few questions regarding the status of the real estate. You do not want to sign a contract with a buyer, only to find out that the seller does not have the ability to sell the real estate. Similarly, when representing buyers, it is important to determine whether the seller has the ability to sell the real estate or if there will be a delay in transferring title. The purpose of this post is in no way meant to be a guide for decedent’s estates. Instead, the purpose is to identify a few of the common pitfalls and items that routinely delay closings.
When a person passes away owning real estate in Kansas, that real estate will pass to the people identified by the decedent (a person that has died) in some written document. If no such document exists, the real estate will pass to the “heirs” of the decedent as directed by Kansas law. The three methods of passing real estate by written document are:
- Transfer on Death Deed or Joint Tenancy Deed
A Transfer on death deed or joint tenancy deed will automatically transfer the ownership of real estate to the person or persons identified in the deed. The filing of a death certificate at the register of deeds is all that is required to finalize the transfer. As a real estate agent, take a look at the deed or ask your title company to take a look to verify that the seller has the authority to transfer title.
The second method is through a trust. Typically, but not always, the trustee of the trust will have the authority to sell and transfer real estate. However, there are innumerable varieties of trusts with varying powers being granted the trustee. Therefore, it is wise to verify that the trust document grants authority to sell real estate to the trustee. Additionally, it is important to make sure that there are not special requirements in the trust document that must take place before a sale is allowed. For example “I grant the trustee the right to sell real estate….so long as my son does not want to purchase the real estate at the appraised value.” This example illustrates a potential issue that could delay a sale.
Lastly, if the decedent had a will or passed away without a will, a probate proceeding will be needed prior to a sale. Simply put, probate is the court process of transferring assets of a decedent to those entitled to the assets. The most important thing to remember with a probate proceeding is that it is not a quick process. It usually takes at least sixty days from the first court document filed until authority is granted by a judge for the sale of real estate. Based upon the buyer, this may be an unacceptable amount of time to wait. If you are unsure of where the probate process is, simply contact the attorney representing the estate and ask.
Decedents estates can be overwhelming and often times complicated. At Tallgrass Title, our attorneys have years of experience transferring real estate following death. We are happy to answer questions pertaining to your transaction. It’s our job!
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!
In the current, fast-paced world, people often times find it difficult to be present at a closing. Perhaps a work or vacation schedule prevents a person from being present at a real estate transaction. Military personnel are often times deployed overseas. Often times folks are forced to relocate quickly and must sell their house from afar. For these and many other reasons, a power of attorney may be the right tool for a closing.
Simply put, a power of attorney is a document that gives a person the authority to do certain acts on your behalf. This person is often referred to as the “power of attorney” or “agent.” In a real estate transaction, this is commonly done with a “limited power of attorney.” This allows the designated person the limited authority to sell or purchase real estate on behalf of a person. The power of attorney document is signed by the person giving the authority prior to the real estate closing. The designated individual provides the document to the title insurance or closing agent. At the closing, the power of attorney simply signs for the absent person.
However, it is important to remember a couple of points to avoid delays or confusion at the closing:
- Plan on having the power of attorney prepared well before closing. Often times the individual signing the document will be overseas. This will require finding a notary or equivalent at a consulate’s office. If in the United States, but simply unavailable, a notary will need to sign the initial power of attorney. Also, an original power of attorney will be needed for the closing.
- Let your real estate agent, title insurance agent, closing agent or banker know as soon as possible that you are using a power of attorney to close. It is extremely important that these individuals know about the presence of the power of attorney in order to prepare the closing correctly. Failure to let these individuals know of that fact could delay closing.
- If the power of attorney is being used to sell a principal residence or “homestead,” Kansas law dictates that specific language be added to the power of attorney. If the language is not present, the power of attorney may lack the proper authority to complete the closing.
- Have a real estate professional assist you with the form. The power of attorney document and its requirements can often appear daunting and confusing. A real estate professional can assure that the document is completed correctly and prevent a delay in closing.
- Decide who will be your power of attorney. Often times this is a stateside spouse, real estate agent or family member. It is important that this person be trustworthy. After all, the family home is most Americans’ largest investment. You do not want just anybody handling this transaction for you.
Tallgrass Title is also happy to assist in the preparation of the power of attorney to ease the closing process. Our office has seasoned real estate attorneys on staff that have prepared countless power of attorney documents for every type of real estate transaction. Additionally, our attorneys are available to answer questions regarding the power of attorney. With a little pre-planning, a seemingly daunting and confusing situation can be made easy.