Tag: title insurance

Closings with Karissa: Why Title Insurance?

I routinely hear the question: Is Title Insurance worth it?. My answer, is yes, it is quite important. You wouldn’t buy a house without homeowners’ insurance or buy a car without car insurance. I’m sure you have Health and Life insurance. If you are protected in other aspects of life, why would you not protect the title to your home as well?  and does not have liens attached? The best part is that title insurance is a one-time fee that is paid at closing and you never have to worry about it again. As long as you own the property it is protected. So it would be crazy not to do it!

Who thought up Title Insurance… and why?

Title Insurance used to be done by opinions given by Conveyancers prior to 1876 when Joshua Morris founded Real Estate Title Insurance Company of Philadelphia.  The purpose was to have land conveyances financially guaranteed instead of the old system of relying on opinion-based reporting without financial backing.  Now, instead of “trust me” the industry offered “if we are wrong, I will pay you.” Other companies in Chicago, Los Angeles, Minneapolis and New York followed shortly after and ALTA was created to assist in standardizing and unifying the Title Insurance industry.

What is ALTA?

In 1907 the American Land Title Association (ALTA) formed as the primary association of the Title Insurance industry. The association set the precedence for title insurance, they did not standardize title insurance policies nationally until 1929.

What can Title Insurance protect against?

Title insurance protects against hidden issues, liens and encumbrances that can be costly to the new homeowner. The following are examples of potential issues:

  • Lack of Access
  • Unpaid Mortgage
  • Seller claims to have ownership, but do they really?
  • Neighbors have an easement through the property
  • Previous owners deceased family member is buried on the property
  • Legal Judgment for previous owner that attached to the property

No one is exempt from uncleared title issues. Even Abraham Lincoln’s father lost his home to title defects when Abe was a little boy…Twice.

So, why title insurance?

No one wants to live with the fear of losing their home due to a claim by someone else or from a lien that could put their home in foreclosure. Especially if they the option to have an insurance policy that says they own their home and no one else has a claim to it. Title Insurance, while not required, is still very important.

Title Insurance can sometimes be overwhelming and appear confusing.  However, the Tallgrass Title team is here to assist with your title insurance questions, just give us a call!

 

Commitment Issues, Vol. 1 – Title Commitment 101

No, no. This is not about problems with Commitments, or even about Buyers shopping for a home for over a year and still not happy with anything. This is a series about the Title Commitments that we issue and how to make sure you understand what you are reading. We want to go in-depth and help break down just what purpose the Commitment serves as well as its different components. The end goal is for you to be able to receive the Commitment and know exactly what the general items and terms are and how to navigate them.

The Nature and Purpose of the Commitment

The Title Commitment is a report prepared by the title company containing specific information about the property to be purchased or that is currently owned. It also legally binds the title company to issue a Title Policy – it’s a commitment. The Title Commitment, issued prior to closing, is the stepping-stone to issuing the final Title Policy, which is issued after closing. The Commitment is not the Policy, and the Policy is not the Commitment, although there will be similar information given and shared between the two.

Your Commitment will contain four parts: the Commitment Jacket, Schedule A, Schedule B I – Requirements and Schedule B II – Exceptions. Let’s parse out each of these components and give a brief run-down of what each one is.

The Commitment Jacket

The Commitment Jacket is general, non-specific coverage that is issued from an insurance underwriter (the Insurance Company) to the title company (the Insurance Agent.) This will be included with each Commitment that we issue.

Schedule A

A “schedule” in its basic meaning is simply a written form or statement of details. Regarding Title Insurance, the schedules give specific information about the property and transaction. Schedule A gives a general description of property concerning its property address, legal description, how title is currently vested, and what types of policies are going to be issued after the closing takes place.

Schedule B – Requirements

Schedule B of the Title Commitment is broken up into two separate sections: Requirements and Exceptions. The first section (Requirements) details specifically what is needed to pass clear title and issue a final Title Policy. If a purchase transaction, you will typically see some form of deed, mortgage, mortgage release, and an affidavit. If refinancing, the only difference will be no deed to convey ownership. There may be some additional items in the Requirements that will need to be addressed, depending on what is found and listed in the Exceptions.

Schedule B II – Exceptions

The Exceptions contain all things pertaining to and running with the specific piece of real estate as mentioned in Schedule A. The Buyer/Owner has free and clear title to the ownership and use of the said real estate, with the exception that their rights to use the property are subject to all those items contained therein.

Stay tuned for the next blog in the series, as we will dive further into discussion about each of the components that make up the Commitment. And even if things are still somewhat confusing afterwards, feel free to reach out and give us a call! It’s what we’re here for!

Closings with Karissa: Security & Real Estate Transactions

Real estate fraud is alive and well as fraudsters find new ways to cheat people out of their money. Whether it be through fraudulent emails or posing as a realtor and calling clients to get them to send money. Title companies, banks and realtors strive to protect buyers’ and sellers’ money as if it was their own money. It is our job to protect our clients and ensure a smooth closing process for everyone. We were asked recently what we do to protect our clients’ sensitive information and protect their assets.  We take this very seriously and want to share a few ways we do this.

ID Verification

When Sellers come to our office to sign documents to sell real estate, we check photo identification. We ensure the party “selling” is in fact the party in title and not a fraudster claiming real estate as their own.

Remote Online Notarization (RON)

Believe it or not, signing documents through a RON environment is more secure than signing in person. Signers must submit their photo ID while on a live audio-visual session, like in person.  But they also answer KBA (Knowledge-based authentication) questions to verify their identity. We simply do not have that kind of capability in person and this adds an extra layer of identity verification.

Secure Wire Instructions

We work with CertifID to send and verify wire instructions. It takes a little extra time to verify your identity and banking information with this process. However, we do this to guarantee funds are getting to where they are supposed to be instead of being sent to a fraudsters personal account.

Earnnest

“You spelled that wrong.”

We hear this a lot, however, I assure you we know how to spell. Earnnest is a payment portal we use to request earnest money from our clients to satisfy the terms of the contract. It works a lot like Cash App or Venmo, is secure, and the Earnest Money goes straight from the buyers bank account to ours. We simply send your buyer a link to our custom payment portal and they complete payment.  This reduces the need to navigate wire instructions and the possibility for human error. There is also a cost savings over cost of sending a wire, in most cases.

E-Signature Platforms

Our office utilizes Dotloop and HelloSign to get documents to clients securely. We can send view only documents or we can send documents with a request for information and signatures. This eliminates the requirement for password protecting a PDF in email and still applies the security necessary to protect sensitive information.

Password Protected

If our office does send out sensitive information via email, we will always password protect it to secure information that is not public knowledge, such as settlement statements. At any time, a fraudster could be hanging out in your email and open attachments that are not secured to see what the proceeds would be for a transaction, then reach out to you with bad wire instructions requesting you send your hard-earned money to then instead of to the title company for your transaction.

Why?

Wire fraud and other forms of cybercrime in the real estate sector resulted in $350 million in losses in 2021, up from $213 million in 2020. While only 12,000 people a year are victims, one in three real estate transactions is a target. This is why we remain vigilant in our own practices and in our efforts to educate our clients.[1]

A staggering 35% of fraud attempts reported in 2021 were traced back to email. If you suspect a fraudulent email was sent to you, do not respond to it, click any links, or open its attachments. Reach out to your realtor, title company, lender, client using known information from a source outside of the email. Stay tuned for a follow-up blog on email security tips!

We are here to answer any questions you may have, protect your information, and help make your closing experience as smooth as possible.

[1] https://blog.alta.org/2022/03/cyber-losses-hit-69b-in-2021.html

But really, have you met RON?

Ever since the State of Kansas passed and implemented permanent RON legislation, we’ve been hard at work to get RON off the ground and running.

We’re thrilled to introduce you to our friend RON.

Who/what is RON?

RON stands for Remote Online Notarization. This is the process of a signer appearing before a notary public (with RON designation) via a recorded audio-visual call. The documents are signed and notarized electronically, and the signer must complete KBA (knowledge-based authentication) identity verification prior to signing.

The implementation of KBA identity verification makes completing a signing and notarization with RON technology even more secure than in-person.

Why does RON matter?

Over the past few years we have come to understand the need to be flexible and introduce remote solutions. Beyond quarantine and illness, we’re living in an increasingly digital world. If you can order your groceries from your couch, why not buy or sell your house? Both are inevitably quicker and contact free.

The significance of RON goes beyond a matter of convenience. Sellers often move before the sale and buyers aren’t always available to close. Our Kansas RON notaries can complete a notarization with a signer anywhere in the United States. Over the past month, we’ve completed deed packets with sellers in Colorado, Iowa, Texas, and right here in the Flint Hills.  These signings took no more than 15 or 20 minutes, proving to be quicker and more cost effective than overnighting documents back and forth to out of state parties.

How does it work?

Tallgrass Title has partnered with the RON platform Pavaso in order to complete seamless notarizations. Like many other RON platforms, Pavaso boasts KBA identity tools and an environment to perform audio-visual sessions, that are recorded and stored for 10 years (should there ever be any question about a particular signing or document).

Pavaso also allows for your Tallgrass Title closers to act as the notary during these RON sessions, whereas many RON vendors require that you use their contracted notaries. We understand that relationships make up 90% of the work that we do – if you and your client utilize RON through Tallgrass Title, you and your clients will be meeting with your beloved Tallgrass Title closers.

If we decide that RON will be right for your next transaction, we will send the signer and any requested observers links to sign up for Pavaso in advance of the scheduled “closing” time. During this time, the signer will have access to review the documents they will be signing in advance. We feel that this gives the client opportunity to prepare questions for the closing agent and avoid the “rush” feeling that often accompanies in-person signings.

When will this be available?

It’s available now! We have been using RON to complete deed packets for several months now and have found this to be an excellent resource for sellers. We hope to utilize RON for loan packets in the future, but approval will always be up to the individual lender’s discretion. If your lending institution is interested in or already using RON, let’s talk!

That’s a wrap!

If your team would benefit from more information about this awesome resource, we’d love to sit down and provide you with more information and/or a demo! Please keep this awesome resource in mind for your next transaction. And as always, let us know how we can best serve you and your clients – it’s what we’re here for!

Closings with Karissa: Settlement Statements

As we prepare to close a transaction, we create settlement statements, which are documents demonstrating all debits and credits associated with the transaction. The American Land Title Association (ALTA) has provided a standard template for these forms, so they are recognizable and readable, no matter which title company you close your next transaction with. Whether the transaction is cash or financed, our office will provide ALTA Settlement Statements to both the Buyer and Seller. The Buyer and Seller statements are unique to their respective side of the closing and can only be shared with the other party if we have express permission in writing.

Sellers

When reviewing the Seller Settlement Statement you will find the sales price, any applicable credits the Seller gave to the Buyer in the contract, a tax proration (either a credit or debit depending on the time of year and if Seller paid them prior to closing or not), title expenses that consist of closing fees and title insurance premiums owed to the title company, any commissions due to realtors, payoffs of current liens, and any invoices or repairs that the Seller has agreed to pay for.

Buyers

When reviewing the Buyer Settlement Statement you will find the sales price, any applicable loan amounts, any applicable Seller credits the Seller agreed to within the contract, a tax proration (either a credit or debit depending on the time of year and if Seller paid them prior to closing or not), loan closing charges determined by the lender, impounds for the Buyers new escrow account collected at closing by the lender, title expenses that consist of closing fees and title insurance premiums owed to the title company, recording fees to file the deed and mortgage of public record with the county register of deeds office, and fees for any inspections or additional work the Buyer has requested prior to closing.

Buyer Settlement Statements may also be referred to as Buyer Settlement Statements.

Bottom Line

Both the Buyer and Sellers statements will include an amount that is either due from or due to that party.  If an amount is due from, this represents the amount due to the title company to close the transaction. If an amount is due to, then you should expect a proceeds check following closing!

This Buyer/Borrower settlement statement reflects the amount the due from the borrower in order to finalize the transaction.
This Seller settlement statement reflects the proceeds the seller will receive after all seller costs are paid.

Signing

As part of “closing” Buyers and Sellers need to review and sign their respective ALTA settlement statements in order to acknowledge their acceptance of the breakdown of debits, credits, and bottom line.

Sellers are more than welcome to sign in our office, with their realtor, on their own or electronically.

Buyers of cash purchases can do the same as above but in the case of a loan will need to sign with the title company, lender or mobile notary.

Questions?

If you have questions about you or your client’s ALTA Settlement Statement, give us a call! We are here to help make this a positive experience.

Closings with Karissa: Contract Best Practices

The heart of any real estate transaction is the contract. It is the meat and potatoes.  Everything that the realtors, lenders and title company need to know to close a deal is in the contract and any amendments or addendums that follow.

Therefore, it is important to have everything that the parties desire within the transaction clearly outlined in the contract . This might include a seller credit or home warranty, Or if certain appliances are to stay or go with the seller. All these things must be included in the contract to set a standard of expectation. It also prevents incidences of: “Well that was my washer and dryer” and the seller running off with appliances the buyer is expecting. Or even worse: “That other lot was supposed to be included.” If it wasn’t on the contract, it won’t get conveyed.

 

Here are some helpful tips to make sure there are little to no issues when writing your real estate contract:

Identify the Real Estate

Know what you are selling. Even if all you have is an aerial from Google Maps with a hand drawn outline of what is intended to be sold and an address. Send that to your title company and ask for a preliminary report. In their search process, they will the correct legal description to include on your contract, preventing issues later with lots or tracts being omitted or included by mistake.

Identify the Parties

A preliminary report will include how the real estate is currently vested. So, if John and Jane Smith want to sell their house, the preliminary report will note that the property is actually owned by John A. Smith and Janice Smith (their legal names) or Jane Smith’s Trust.

The Buyer in the transaction will direct how they want to take title to the real estate on the contract.  The buyer might prefer to take title with first, middle and last names or just first and last.  Or they may request to take title via a trust or a company.  This should all be included on the initial contract or a follow up Addendum.

Set a Purchase Price and Terms

Agree on a purchase price. Once the purchase price is decided, set the terms. Who will pay closing costs to the title company, title insurance and any? Will there be a Home Warranty and who will pay that and how much? Is the Seller willing to offer a seller credit to help with the buyers closing costs? What stays and what doesn’t stay with the property? Never assume that appliances stay, even if it seems logical.

Pick a date to close

Closing dates can be very flexible and easily changed with addendums so long as all parties agree to it. Often contracts will state “on or before” and that just means that at any time before the stated close date in the contract the transaction can be closed if all parties agree. In the current market, unless it is a cash deal, give yourself, your client, and lender time and set closing out 30 to 45 days. Best practice is to avoid closing on the very first or last day of the month as these are the busiest days for closings, and it may be difficult to get the time you want unless you schedule early.

Ask questions

If something doesn’t seem right to you, ask questions! For Buyers purchasing or sellers selling a home this is a huge change and can be very tense. We understand the stress of each transaction and are here to help and answer any questions. Even if they seem trivial, we are happy to assist and walk you through the process, it’s our job!

 

 

 

What’s new at Tallgrass Title in 2022?

We hope that you had a wonderful Christmas season and we wish you good luck in the coming year. The past two years have been incredibly eventful at Tallgrass Title and we are grateful to every buyer, seller, realtor, lender, and vendor we’ve have the opportunity to work with during such unprecedented times. We’ve seen many businesses bloom as the region responds to growth and an everchanging market. It has been so good to do business with you.  We want to make note of a couple of changes you might notice around Tallgrass in the New Year.

RON is coming to Tallgrass

RON Swanson? Weasley? Not quite! Remote Online Notarization.  Kansas passed legislation last spring that allows Kansas Notaries to complete notarizations through remote audio-visual conferences, beginning in January 2022.  With this capability, we will be able to conduct a deed packet signing or close a loan with your client over a video call. We will be able to close your deals anywhere in the state of Kansas!  Look for an announcement about this service in the coming weeks. This is a service we cannot wait to provide!

New Rates & Fees

Tallgrass takes pride in providing top-notch customer service and the best value for title insurance premiums and closing costs. In order to maintain our high level of customer service, we have made a small adjustment to our premiums for the new year.  To compliment our rate adjustment, we have opted to give back to the consumer by including complimentary endorsements in the cost of our loan policy on simultaneous issue packages.  While growth requires adjustments, we believe we will remain the most competitive option for the services we provide in our tri-county service area.

Again, it is a true delight to serve you and your clients.  We look forward to seeing much more of each other in 2022!

Early Deed Packets = Smooth Closings!

We have a saying in our office: “early deed packets means smooth closings!” But why would a few signed documents mean closing would run smoother? The more information we receive ahead of closing allows our closing team to gather any additional information we may need well in advance.  An early and complete deed packet allows us to balance with your client’s lender and get final numbers out for buyers in cash transactions. That way, when the day of closing comes around finalizing the transaction is a smooth process, leaving more time for celebration and little to no concern about whether things will fall into place.

Deed Packets contain several documents that consolidate much of the information we will need prior to closing.  This includes a form that allows us to contact the Seller’s current mortgage holder to obtain a payoff. This is especially important right now with many mortgage companies experiencing staffing shortages with extended processing times.  Oftentimes, it can take up to 20 days to get payoffs returned to us.

Early deed packets also allow us to deliver early settlement statements to you and your clients.  This gives plenty time for review and provides a clear picture of what the closing day will look like on the financial end of the transaction.

Additionally, some expenses will not be clear to us until we have the deed packet returned, including information about Homeowners Associations.  Having information about a property’s HOA membership in advance allows us to ensure that prorations are applied appropriately at closing.

This early document package also contains important information about email fraud and wire fraud. We want to help protect your client’s money just as much as you do.  This information is available to all of our clients in order to inform them of the dangers of spam emails and the possibility of fraudsters intercepting wires. Likewise, we include information about how we protect our clients from theft with CertifID.  We use CertifID to send or verify wiring instructions prior to the day of closing.

We understand sometimes coordinating a deed packet signing can be an issue as schedules vary.  Your clients are more than welcome to come to either of our offices Monday through Friday during business hours and we would be happy to walk through the deed packet with them. Alternatively, we offer free courier service and would be happy to meet your clients at a convenient location in Manhattan, Wamego, Alma, and Westmoreland.

Should you have any questions about the contents of a deed packet, feel free to contact one of our real estate professionals to assist you through the process.  It’s our pleasure to assist you!

Five Common Misconceptions about Title Insurance

When it comes to purchasing a new home, you are making a long-term commitment with your money and your time. One oversight when purchasing is the consideration of the history of the home.  I do not mean the structural integrity of the home rather, the history of the legal title to the home. We are talking about the history of ownership of the land and the structure located on it. Title Insurance is a way of giving you peace of mind that you have full ownership of what you have just purchased, and that no monetary claims will arise from an individual or a business entity in the future. If that were to ever be the case, Tallgrass Title would have your back!

When it comes to Title Insurance, there are some pretty common misconceptions that might deter a buyer away from deeming it necessary. We want to help you navigate some of those misconceptions in order to make sure you are aware and get the coverage that you need.

If the Lender orders Title Insurance, the Buyer does not need to.

In most real estate transactions, the Lender involved will require Title Insurance. As discussed, Title Insurance protects from future claims of lack of ownership, liens, undisclosed heirship issues, ordinances, lack of right of access, etc. However, the insurance that the Lender requires only protects the Lender, not you as a Buyer.  Two separate insurance policies exist that Title Companies offer: a Lender’s Policy and an Owner’s Policy. Often, a Lender will require the Buyer to purchase an Owner’s Policy.  Most title companies offer a significant discount the the issue of simultaneous Lender’s and Owner’s Policies.

If I have Homeowner’s Insurance, then I do not need Title Insurance.

As previously mentioned, Homeowner’s Insurance only protects your home from damage caused by hail, fire and wind. Title Insurance protects your ownership and against aforementioned claims.

I have built a brand new home; therefore, I do not have to worry about ownership issues.

Although it is true that you are the very first owner of a home, the land that your home sits on has long been in existence and has had many previous owners. Title Insurance not only protects your house, but it also protects the land that your home is settled on!

Title Insurance is transferable from one owner to another.

While the idea that one owner can transfer Insurance to another does seem plausible, Title Insurance only covers specific owners of the specific property for their specific transaction for the duration of ownership. This coverage will end upon the transfer of the real estate, so each new owner needs to make sure they are protected.

Title Insurance is expensive.

When considering the amount of money being invested in your home, an Owner’s Title Insurance policy has very minimal cost, and unlike a Homeowner’s Insurance policy, Title Insurance is a one-time payment that protects you the entire duration of your ownership. Further, Kansas has some of the lowest title insurance rates in the nation.

Not only does Title Insurance protect you, but your Title Company will also be there to help you navigate through the milieu of Real Estate and give you the assurance you need while owning your home!  We are also here to answer your specific questions regarding what is covered.  This can at times seem daunting, but our trained professionals are here to assist in these regards.  That’s our job!

 

Are you Ready2Close?

We are happy to introduce the newest member of the Tallgrass Title closing toolkit: Ready2Close! Ready2Close is a plug-in to our title software that will work alongside PaperlessCloser and allows buyers or sellers to follow along with the progress of their transaction, from start to finish!
We will continue to use PaperlessCloser as the primary platform for realtors, lenders, attorneys, and admins to stay engaged with the transaction while Ready2Close will function as an additional piece that is both mobile and consumer friendly.

What does it do?

At your request, we will invite your buyer or seller to Ready2Close. Once in, they will see a photo from Google Maps of the property associated with the transaction. Users will also find a Milestone tracker showing the progress of their transaction. Just like ordering a pizza! 😉

Once the user clicks View Details, they will be directed to the other components of Ready2Close. Within Ready2Close, they can do the following:

  • Upload documents to be shared with Tallgrass Title, through a secure platform
  • Access details about their transaction including closing location, date, and time and contact information for their realtor, lender, and closing agent
  • Securely locate wiring instructions
  • Review and e-sign documents

Mobile Access

Ready2Close provides your buyer or seller with the ability to view transaction documents, e-sign, and obtain other details necessary for closing from their mobile device. While designed with the consumer in mind, realtors and other agents associated with the transaction can view all of their current files from one log-in and access requested documents in a mobile-friendly environment.

Security

Users must be invited by Tallgrass Title to create a Ready2Close account and to obtain access to a file.  Much like PaperlessCloser, we will identify which parties will be able to access specific information and will continue to protect your client’s non-public personal information. Your personal and your clients’ log-ins for Ready2Close will be protected by two-factor authentication.

What about PaperlessCloser?

Think of Ready2Close as buyer or seller’s PaperlessCloser. PC isn’t going anywhere, and we hope to harness both of these tools in sync to create ease and transparency in your transactions. If you’d like to give Ready2Close a shot on your next transaction, let us know and we’d be happy to invite both you and your client; you may find that you’d prefer to continue using PaperlessCloser exclusively or you might find you enjoy the mobile access and simplicity of Ready2Close. Or any combination of options. 😊

For Sale By Owner

If you’re a seller or buyer representing yourself, Ready2Close is the best way to stay in sync with the title company and up to date on all stages of your transaction. Give us a call and ask to be invited to Ready2Close on your transaction!

The team at Tallgrass Title is looking forward to providing a more transparent closing experience for the customer and we believe that Ready2Close is the next right step for making that happen.  Notifications will be sent whenever there is a status change to the file and clients have the option to opt out at any time.

If electronic document sharing and signing does not appeal to a party involved in your transaction, we are happy to continue to offer our free courier and mobile notary services. We will continue to do whatever we can to cater transactions to the unique needs of all parties involved.