Tag: sale

Flint Hills Area Builders Fall Parade of Homes

At Tallgrass Title, we believe in the strength and growth of our area. Several major additions, both private and public, have been added to the job market regionally.  Additionally, the quality of life in the Flint Hills region continues to improve.  This, in turn, has made the Flint Hills region a wonderful place to live and raise a family.  These factors have caused rapid growth in the region.  A major contributor in assisting with that growth is the Flint Hills Area Builders Association (FABA).  Tallgrass Title is a proud member and supporter of FABA.  We feel that FABA best represents the builder and associated supporting businesses and their needs in the region.

This weekend is the Flint Hills Area Builders Fall Parade of Homes. Tallgrass Title is a proud Grand Marshall sponsor of the Parade of Homes and has been so for several years.  We feel that this is a wonderful opportunity for potential buyers to see the quality homes built by FABA members.  It is also a chance for consumers to view the latest designs and products used in the area.  We encourage any interested folks to take advantage of the tour this weekend and join the parade!  The tour is free and guide books are located at each of the Grand Marshall sponsors, online or at each of the homes on the tour.  We hope to see you on the parade!

Judgments That Appear on the Commitment – and what to do about them

Our job as a title insurance provider is to insure the parties are passing clear title to the real estate. We perform an in-depth search of the real estate to prove that. We also perform a judgment search on both sellers and buyers. We check for court cases filed against each party and any liens that have been filed against the real estate. If we find any open matters that need to be resolved, we add requirements to the commitment. Once the required documents are provided to us, we can clear the lien from the real estate.

Child Support

If a divorce has been filed by one (or more) of the parties, there may be a court order for child support or spousal maintenance. The title insurance commitment will list a requirement for proof that the payments are current.

Tax Liens

In some cases, the real estate taxes may be delinquent. When this happens, the delinquent taxes must be paid off during closing. The seller can certainly pay the taxes before closing, but we are usually asked to pay them off out of the seller’s proceeds. We obtain a payoff statement from the county treasurer’s office and add the total payoff amount to the settlement statement. If the seller chooses to pay the back taxes early, we will update the commitment as soon as we receive proof of payment.

Mechanics Liens

Contractors who do certain types of repairs or improvements have a period of time to file a lien. For example, if a homeowner doesn’t pay a bill for their driveway being paved, the buyers could be stuck with paying it. The unpaid contractor has up to a few months to file a lien at the county. This is why we have each seller sign the Affidavit of Debts and Liens. By doing so, they are swearing that there are no other outstanding debts that could attach to the real estate.

Civil Matters

If there has been a civil case filed against one of the parties, we have one of our attorneys review the documents to be sure it will not attach to the real estate. We may require additional documents or a payoff in order to release the suit.

Here at Tallgrass Title we understand that each real estate transaction has unique twists. Feel free to call or email if you have any questions about your transactions. As always, we are here to help!

Title Insurance 101 – Refresher Course

Most of you have probably been in the real estate world long enough to know what title insurance is. However, we thought it would be helpful to provide a “refresher” course to help answer your client’s questions.

Let’s face it, most people closing on real estate don’t read through the details of all of their closing documents. However, there are people who look at the settlement statement and want to know what they are paying for. Also, suppose you have clients who are keeping a close eye on finances. If they want to save some money, they might ask if title insurance is necessary. Here are some pointers to help out your clients, or those professionals who are still new to the real estate world.

“Title Insurance protects property rights.”

This is the simplest definition of title insurance. A title insurance policy insures that the property owner actually has full title to the real estate. When a real estate legal description or address is brought to us, we start an extensive search. Our search follows the “chain of title”, the deeds that show how the real estate changed hands over the years. Any mortgages filed against that real estate must have been properly released. Not only do we look at the records for that tract of real estate, but we also look for judgments against the buyers and sellers. We look for any law suits or claims that could potentially attach to the real estate as liens.

Title Insurance brings peace of mind.

The title commitment is our promise to issue a title insurance policy once the requirements have been met. The title insurance policy is issued after closing, once the deed and mortgage have been filed, and the liens properly released. Once the new property owners receive their policy, they can be assured that they truly own their real estate. If a claim is made by someone challenging their ownership, they have the policy to back them up.

Here at Tallgrass Title we work hard to provide the information and assistance everyone needs for a smooth closing. Feel free to contact one of our agents today to help get your real estate questions answered.

A Beginner’s Introduction to Real Estate Auctions

Oftentimes, real estate will be offered for sale by using the auction process. An auction is the process by which the public has an opportunity to offer (“bid”) money for property and the property is then sold to the highest bidder. However, the auction process can be confusing to understand or a bit intimidating. This post is by no means an exhaustive explanation or definitive guide to real estate auctions. Instead, I hope to provide some basic information and point out some potential sticking points that could cause issues in the auction process.

In this area of the state, auctions are most often used to sell agricultural real estate, estate property, distressed property, investment real estate or the liquidation of assets belonging to a business or individual for one reason or another.

The basic premise for an auction is the same: An auctioneer will begin by stating the rules for the auction. He or she will also indicate the terms that a successful bidder will be agreeing to in a contract to be signed following the end of the auction. Typically, the auctioneer will indicate whether the auction is an “absolute” auction or whether there is a “reserve.” However, the auctioneer will rarely indicate what the reserve amount is. If no statement is made about whether the auction is with or without reserve, consider there to be a reserve. Lastly, most auctions are tape recorded or video recorded in order to verify what was said and who bid the highest amount.

Following the statement of rules and terms, the auctioneer will call for bids. This is the portion of the auction that you are probably familiar with from television or the internet. The auctioneer is not in fact offering the real estate for a set amount but instead inviting people to offer a bid. The auctioneer is usually stating something along the lines of “I have been offered $1.00, who will offer me $2.00?” The rest of the words are typically just filler words that do not mean anything. Some auctioneers will chant the call quicker and others slower. Additionally, the filler words will change between various auctioneers. However, the most important part of the calling of the bids is understanding how much the current bid is. If you get confused, just ask the auctioneer, he will tell you.

At the close of the bids, the auctioneer will usually count down “going once, going twice, sold” or some other statement that the bid will close soon. Following the close of bids, a written contract will be signed by the seller and buyer with the actual closing happening sometime in the future.

A couple of quick pointers to remember:

  1. Make sure you have money to support your bid or have your financing approved prior to the auction. Auctions are not contingent on financing. By signing the contract, you are promising to pay the amount bid.
  2. Auctions typically require you to make all inspections prior to the date of the auction. The real estate is almost always sold “As-Is.” This means that you are buying the property in its present condition.

Auctions can be intimidating for the untrained buyer or seller. Therefore, if you are concerned, employ a real estate agent or attorney that understands the process to assist you. Also, attend an auction and plan on not bidding. They are generally open to the public and can be interesting to observe. Lastly, here at Tallgrass Title, we routinely assist sellers and buyers on both sides of auctions. We are here to answer questions or direct you to somebody that can assist you. It’s our job!

Construction Loans – Mainly for Lenders

As a Lender, do you have clients who want to build a new house on their lot? Here at Tallgrass Title, we offer a construction hold-open, also known as a construction commitment or policy. We get questions about this product quite often, so we thought we could help clear up some of the confusion surrounding this topic.

How it works:
You, as the lender, contact us, the title company, to request the title work. An email sent to order@tallgrasstitleks.com is sufficient, or you can fill in the online order form on our website. We complete the title search and send the commitment to you. The commitment will contain a specific set of construction language and the date of the first search. Here is an example of what that commitment language might look like:

The title search must be updated every 120 days. This is because title insurance commitments have expiration dates. Here at Tallgrass Title, we keep an eye on the expiration dates and remind you when it is time to request an update. You can just send us a quick email to “officially” request the update. We keep the message in our file for our underwriters to see. Our initial construction loan fee covers the cost of the initial search, plus two update searches.

When construction is complete, the loan can be closed. At that time, the lender can determine if the initial mortgage will stay in place or if a new mortgage will be filed. The cost of the final policy is charged at the final loan closing as soon as the title company has been notified of the final mortgage amount. The lender’s policy is generated and sent to the lender after the final loan closing has happened.

FAQ’s:

• The property owners want to remodel, will a construction loan work?
– At this time, the title construction commitment is only for new construction, not for a remodel of an existing structure. If the house is already standing, the construction commitment is not something we can offer you. It has to be a new structure, or a brand-new wing added on to an existing structure. You may need to consider a 2nd mortgage, HELOC or some other financing product.

• The construction is going over-budget. How does that affect the construction commitment?
– We are very flexible when it comes to the projected loan amount. If the amount needs to be increased, we can certainly do that once you send us the request.

• Our clients haven’t yet purchased the lot they want to build on. Do they have to purchase the lot, then get a construction loan?
– We can work with lenders on the lot purchase and construction hold-open as parts of the same transaction. We can issue the owner’s policy soon after the initial sale closing and issue the lender’s policy later, once the construction is complete.

• The sale transaction closed, when will we get the lender’s policy?
– As mentioned above, we cannot issue the lender’s policy until the final mortgage has closed and has been filed. As soon as construction is complete and the mortgage finalized we can go ahead and issue the lender’s policy.

Here at Tallgrass Title, we work to make the deal go as smoothly as possible. Give us a call today and we will be happy to answer any questions you may have about construction title policies!

Fraud & Hacking Update

With wire fraud and email hacking on the rise, we must all become more diligent in protecting our clients’ information. Here at Tallgrass Title, we take multiple steps to ensure that our clients’ information is protected.  One aspect of protecting our clients’ information is educating prospective buyers, sellers and real estate professionals about the dangers of wire fraud and email hacking.  With this purpose in mind we have created two informational fliers to educate all parties in a transaction. They are for use by real estate agents, banks and other real estate professionals.

We recommend that you provide these fliers to every new client that you represent.  You will also notice that this information will accompany every deed packet sent out by Tallgrass Title to Sellers in a transaction.  Protecting against wire fraud and email hacking requires all parties to a transaction to stay diligent throughout the process.  Should you have questions regarding potential wire fraud, email hacking or anything else that “just doesn’t feel right,” please feel free to contact our office and discuss the issue with our trained closing agents.  It is better to be safe than sorry!

 

Escrowing Insurance Premiums and Taxes

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!

What Happens to Your Mortgage When You Sell Your Property?

Many people have at least one mortgage on their real estate. When you intend to sell your real estate, that mortgage must be released so the buyer will receive clear title. You may wonder, how do I get my mortgage paid off for closing? Do I need to contact the mortgage company to get the payoff amount? Will I need to send the payoff money to the mortgage holder after closing?
We are here to tell you that paying off a mortgage at closing really does not have to be as complicated as it sounds. Our closing agents are used to handling this as part of a regular closing.

Mortgages

A mortgage is simply the document that secures repayment of money borrowed by placing a lien on real estate. The mortgage needs to be paid off and released from the real estate; otherwise, the mortgage will remain with the real estate sold. Nobody wants to buy a house with somebody else’s debt attached! The mortgage may either still belong to the original bank that issued the mortgage, or it may have been sold off to a different bank. It may be a surprise, but it usually isn’t more complicated if the mortgage has been sold. The payoff process stays the same.

What is the payoff process?

The process begins with the Seller completing an information release form for us. This form typically accompanies the deed and other documents for the Seller to sign weeks before closing. It only requires a small amount of information from the seller: current mortgage holder name, loan #, signature, and SSN. In most cases, this document may even be signed electronically and sent back to us. Electronic signatures are a big help, because the sooner we get the completed form, the sooner we can get the payoff quote for the settlement statements.
As soon as we receive the filled-out form, we contact the mortgage holder on the Seller’s behalf. The mortgage holder sends us a statement with the total payoff amount and their wire instructions. We add the payoff amount to the closing statements and send the payoff amount immediately after closing.

After the Closing

After the mortgage holder receives payment, the amount is applied to the underlying debt and a “release” is sent to the county for filing. To complete a seamless closing, our agents will typically add a couple extra days-worth of interest in order to make sure enough funds are sent to secure a release of the mortgage. If there are any excess funds, the lender will refund them to the Seller.
If the Seller has set up automatic payments, he or she should contact the mortgage company to cancel the payments following closing. Also, prior to the closing date, the Seller should be aware of when payments are due. If a payment is not made within the grace period, late charges may be applied.
Our closing agents are always happy to answer any questions you may have about the closing process. Give us a call today or visit our website www.tallgrasstitleks.com.

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.

Water, Water and Water (Part I – Drinking Water)

Leonardo Da Vinci is quoted as famously saying “Water is the driving force in nature.” The modern world of real estate is no exception.  Real estate use will most always require that there is some access to water.  Whether the property be a residential home or a cow pasture, the need for water is present.  Part I of this post will focus where you obtain your tap and drinking water.

In residential real estate, there are three main sources of drinking water in this region of the country: Municipally supplied water utility, Rural Water District or owner owned and maintained well.

Municipally supplied water is just that. The City supplies water to its residents and charges a fee for the service.  This is how a majority of homes are supplied with drinking water.  However, where does the City obtain the water supplied?  Typically, a City will own and maintain wells or obtain water from a reservoir or river and treat and supply the water.   The water is then provided to residents through a City owned water system.  Often, the water obtained from wells is pure enough that the City will not be required to treat the water.  Reservoirs or rivers almost always require some form of treatment to the water before providing it to residents.  Furthermore, to ensure the safety of the water supplied, the State of Kansas and the Federal government require periodic testing of public drinking water.

Rural Water Districts are “member-owned” cooperatives that are most often established to provide water to areas not served by a City. The “members” are basically the individuals that purchase water from the water district.  The members maintain a board that oversees the water system and its sources of water.  Water districts are also required to periodically test its water to maintain that it is pure and uncontaminated.  In order to purchase water from a water district, one must first become a “member.”  This usually involves a small transfer fee from the previous owner of the real estate.   If you are establishing a new residence or other new water service, the fee requirement can be substantial.  It is important to investigate this issue when planning a home building project.

The final, most common source of water is the private well. The owner has a water well that pumps water and provides it to the residence or farm.  In Kansas, water windmills were once a part of most farm yards.  Today, the work is done by electric pumps and pressure tanks in order to provide constant, consistent water to the owner.  Owning your water source may sound liberating, but a private well comes with its own headaches.  The owner of the well is wholly responsible for checking the quality of the water.  Additionally, wells can go dry; especially in drought years.  Lastly, the equipment required to pump and pressurize and possibly treat the water requires maintenance.  It is important in a real estate transaction to investigate these issues prior to closing.

When purchasing or selling real estate, it is important to understand how water is obtained at the real estate. This will prevent unwanted surprises down the road.