As most of you know, we recently opened an office in MHK. We had the opportunity to talk a little about our new adventure! Check out the video below!
As most of you know, we recently opened an office in MHK. We had the opportunity to talk a little about our new adventure! Check out the video below!
Last week we officially opened a Manhattan, Kansas office. This move follows requests from real estate professionals to locate an office to better serve their regional needs. You asked, we listened! Our Manhattan office (TGT MHK) is located at 210 N. 4th, Suite A in the Hartford Building. We are fully staffed Monday – Friday from 8:00 am to 5:00pm and are open over the noon hour. A drop box is located on the front of the building for after hours drop-offs. Both the Wamego and Manhattan offices are equipped to deal with closings, escrow deliveries, deed packet deliveries and notary services. Additionally, TGT MHK will continue to offer free courier service in the Manhattan area as well as mobile closings. We are here to serve your needs!
At Tallgrass Title, we love feedback about how we may better serve your needs. Feel free to speak with any of our title experts about your needs as a real estate professional.
In this technological age, it seems like everything is at your fingertips. Have business to conduct? Pull out your smart phone and get it done. Have a report that is due while you are out of town and do not have all of the information you need? Find an internet café or public wifi, pull out your laptop computer and get to work. With the help of Wikipedia, Google, and any number of search sites, all of the information you need is at your fingertips. Great, right? It can be, but while it is easier for people to access information, it is also easier for hackers and scammers to access people’s personal information like social security numbers, bank accounts, and other personal information. Once they have that information, Tada! You now have six new credit cards, your debit card has been used to buy a new car half-way across the world, and you managed to get a speeding ticket in some hole-in-the-wall town three states over! Your identity was stolen! Scary, right? How can you protect yourself and your clients from this type of threat? Here are some tips for practicing public (and personal) internet safety:
Computers can be a convenient tool that can make our lives easier in many ways. By following these 5 rules, they can continue to be the tools that they are intended to be. Here at Tallgrass Title we are committed to protecting all of our associates and clients. Let us know how we can help you protect yourself and your clients from scammers and hackers.
So, what comes next after the signed contract has been delivered to the title company and the title commitment is complete? The Deed Packet!
The sooner the completed deed packet is sent back to the title company, the easier it is to complete the pre-closing tasks. For example, the information release allows us to obtain the mortgage payoff quote. The deed and other documents to be recorded must be reviewed to ensure they will meet the county recording requirements.
If the seller lives some distance away, they may need extra time to ship the completed documents back to us in time for closing.
Here is a breakdown of the most common documents in the Deed Packet:
However, this is the most important document of the bunch. Please ensure that each party signs it in the presence of a notary. As we mentioned in a previous blog, it is also paramount to keep the same original formatting to ensure it is accepted for recording. And, it really makes our job easier if all of the documents are printed single-sided, not double-sided!
This is a complicated title for a document that actually has a rather simple purpose. The purpose is for the seller to confirm that there are no other liens that can attach to the real estate. Each party will have to sign in the presence of a notary. However, the important thing to keep in mind are the checkboxes that usually appear on pages 2 and 3. Each of the statements that accompany the checkboxes should be read carefully before being marked off.
All mortgage holders require that 3rd parties receive authorization from the mortgagors to receive any information from them. Without this document, we can’t prove how much money will be needed to get the mortgage released. It is also important for the seller to fill out the name of the lender, and the account number if they have it. This is because there are certain types of mortgages that don’t have to report to the county when they are sold. It could potentially delay closing if the title company doesn’t know who is actually holding the mortgage.
Yes, the title company must report most sales to the IRS. Besides the signature lines that are clearly visible at the bottom of the page, there is other information that is needed. Near the top of the page, please guide the seller to fill in their social security or tax ID number(s), their new/forwarding address, and their phone number. We have to mail out a copy of the actual 1099 form to each seller for the next tax year, so a valid mailing address is really, very helpful.
Here at Tallgrass Title, we also include Fraud Warnings to put people on their guard. This is very important to us, since fraud is becoming more common.
These are the documents that are included in most Deed Packets. There may be other documents specific to the transaction, but they usually don’t appear as often. Please feel free to reach out to us if you have any questions about any of the documents you see in the Deed Packet. We are always happy to help and will even send out a notary to meet with your sellers who are in the area!
In Kansas in years past, mortgage registration tax was charged by the State of Kansas for the filing of a mortgage at the county register of deed’s office. This tax was based upon the size of the mortgage and had to be paid at the time of filing the mortgage. In the last year of its existence, a residential mortgage in the amount of $100,000 would result in a tax in the amount of $50.00. As you can see, this amount can quickly multiply on larger mortgages. Additionally, a filing fee based upon the number of pages to be filed was charged along with the mortgage registration tax. A standard, thirty-year mortgage typically results in a filing fee of anywhere from $100.00 to $350.00. These fees will typically show up as financing charges or “closing costs” on a settlement statement. In my experience, most individuals were not aware of the fees until they reviewed their closing statements. It was usually a shock for buyers to learn that they had to pay a couple hundred dollars simply to file a document at the register of deeds.
A few years ago, several homeowner, realtor and homebuilding groups lobbied State Legislators for the repeal of the mortgage registration tax. Their efforts were successful, and the tax was phased out over a few years until now. Beginning on January 1, 2019, mortgage registration tax is no longer charged in Kansas. This means immediate savings for homebuyers and homeowners that are refinancing their existing loans. Additionally, the filing fees charged at the register of deeds will not increase in 2019. Again, this is helpful to the Kansas home buyer and homeowner. Should you have any questions regarding the repeal of the mortgage registration tax or the current filing fees, feel free to contact Tallgrass Title.
In the state of Kansas, real estate taxes are paid in arrears. This means that the taxes for 2018 are not payable until the end of 2018. The county issues the tax statements in the beginning of November each year. The 1st half is due on December 20th and the 2nd half the following May.
As soon as the new tax statement is available at the county treasurer’s office in November, we obtain a copy of it. For all closings that happen between early November through the end of May, our closing agents ensure that the taxes are paid in full during closing. The only exception to this rule is when the Lender will pay the taxes directly out of the escrow account. For example, if a closing happens in February, the seller will pay the 2nd half taxes during closing, even though technically they are not due until May.
In most counties, the new owners will not receive a 2nd half tax statement. So, it would be very easy to forget to pay the 2nd half in May. The treasurer’s office would think that the previous owners are responsible and send notices to them. However, the previous owners have already given a credit to the new owners to pay the bill (through the tax proration), so they actually aren’t responsible. As you can see, this can cause a lot of unnecessary stress on all the parties.
When folks purchase residential real estate and require financing, most likely an “escrow account” will be established during the loan process for the payment of insurance and taxes. This is different than “putting a contract into escrow.” “Putting a contract into escrow” means that the contract signed by the buyer and seller has been delivered to a title company to begin working towards a transaction. An “escrow account” established for the payment of insurance and taxes basically means that you will make a monthly mortgage payment to your bank and a portion of that payment will be set aside to pay your homeowners insurance and real estate taxes automatically. This is done for a couple of reasons. First and foremost, lending regulations require a bank to establish an escrow account with most residential real estate loans. Secondly, because the home is the bank’s security for the repayment of the loan, it wants to make sure that its security is protected. Therefore, the bank wants to make sure the home is insured against loss and they also do not want the home taken away for the failure to pay the real estate taxes.
During the loan process, you will be informed of how much the monthly insurance and taxes escrow will be. Also, because your transaction will most likely not happen on the 31st of December, some proration of taxes will be required. Proration means that the seller will be responsible for the taxes while he/she owns the home and you will pay the taxes when you own the home. However, taxes are only payable at the end of the year. Therefore, the seller gives a portion of the taxes to the buyer and the buyer pays all the taxes at the end of the year.
Also, the bank will collect additional funds to be placed into the escrow funds at the time of closing your loan. Those beginning funds will be added with the monthly payments to pay the insurance and taxes when they come due. The bank handling the escrow account will receive the yearly bill for insurance and taxes and pay them when each comes due. You will still receive a statement from the County Treasurer and your insurance provider, but this is simply for your information. Additionally, you are always welcome to choose or change your homeowner’s coverage and insurance company.
Upon selling your house, you may have funds left in the escrow account that will not be needed to pay any future insurance or taxes. These funds will be returned to you following the sale of your real estate. It is important to work with the escrow service to make sure they are mailed to your new address. Questions about escrow accounts, homeowner’s insurance coverage and real estate taxes during the loan process are quite common and can seem complicated. If you have questions, speak with your banker or our closing agents here at Tallgrass Title. We are happy to explain the process. It’s our job!
With the continuous technology development going on right now, advisors in the title industry have been encouraging title companies to go paperless. Going paperless is not a new idea for us. We have been talking and planning for this for some time. We have already started uploading certain search and closing documents for new files. When someone sends or gives us a document, we scan it and publish it as soon as possible. However, we intend to officially go paperless in the next couple of weeks.
Our search documents will be uploaded to Paperless Closer. This is the program we use to securely store documents with a portal that you can access. Access the portal through our website using the “Client Login” button at the top of the page. We already upload the contract, receipts, closing statements, and invoices during the closing process, but you will be able to view even more information. You will be able to see the deeds, restrictive covenants, plats, etc. that we researched during the search process. This should make it easier, especially for realtors, to see which documents have already been given to us, as well as help you collect the documents you need to keep for your records.
A tip for cutting down on paper: we only need originals of notarized documents back in our office for closing. In the deed packet, a seller may sign all of the non-notarized documents electronically. Just be sure to send us a copy od the completed documents and we will add them to paperless closer. As a reminder, please do not send documents with personal information through email without making sure it is protected. Scammers and hackers are becoming more and more common, and none of us want to see our clients’ identities stolen!
If you (or an auditor) are going through your files and notice a missing document, look for it on paperless closer. For older files, if you don’t see it, just send us an email or quick call and we can publish it immediately. You won’t have long to wait since it is a very quick and easy process for us to pull something from our electronic archives.
For those who are not as familiar with Paperless Closer, just let us know and we can get you some training. It only takes minutes to create a new account if you don’t have one. And, it is a simple, user-friendly program that won’t take up much of your time.
As always, please call or email if you have any questions or need any assistance with Paperless Closer. We are happy to answer any questions you may have!
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.
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.
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.
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.
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.
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?
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:
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!