Tag: under contract

Marital Status and Holding Title

When it comes to selling your property, getting that contract signed and sent to your local title company is the first step to a smooth closing. To ensure the process goes as effortlessly as possible, there are few additional things to keep in mind when you put your John Hancock on that very important sheet of paper.

Marital Status

We often see this left off the initial contract, but it is very significant, especially for the seller. The popular maxim- “what’s yours is mine, what’s mine is yours”- is a good way of understanding why indicating marital status is so important. The State of Kansas recognizes that spouses have rights to real estate through what is termed marital interest. Even if you bought a property in your name individually, your spouse has an interest in that property and must participate in the future sale.  Therefore, we require disclosure of both parties’ marital status.  This allows us to ensure any married persons’ spouses are involved in order to pass clear title.

Taking Title

There are two common ways of taking title when buying real estate and it’s crucial that your contract indicates how you intend to hold title.

Joint Tenants with Rights of Survivorship

The most well-known way of taking title is by Joint Tenants with Rights of Survivorship, also known as JTWROS. This means that the two (or more) people buying a property will have full ownership interest upon the death of any others who are on the deed.  There are no restrictions on who can take title in this manner: it could be you and your spouse as a married couple, or it could be you and your three siblings. The surviving title holder(s) automatically receives the interest of the other title holder upon their death.

Tenants in Common

The second common way of holding title is as Tenants in Common.  Whoever receives interest in this manner retains their rights to the property for their heirs or whoever they choose to pass it to. For example, Bob and Joe, identical twin brothers, buy a few hundred acres of land with the intention of starting up a cattle ranch, taking title as Tenants in Common. Rather quickly, Bob discovers he is much better suited for his old Title examiner job in the city and wants out. Joe loves it, however, and refuses. Bob decides to sell his portion of interest anyways. He cannot transfer Joe’s rights, only his own, so whoever he sells to, will only have a 50% interest in that property. The interest in the land is split, and will continue this way, unless one of the interest holders deeds his interest to the other, or both of them to a common third party.

To wrap up

An important conclusion from this is that your marital status does not determine the way in which you take title. Therefore, we require both pieces of information on the contract. In Kansas, if the deed does not specify how title is to be held, it is automatically considered tenants in common.  It is important to clarify the way you desire to take title as married couples generally opt to take title as JTWROS to ensure that their spouse receives their interest in full at one’s passing.  Similarly, if marital status is not stated on the deed, it leaves the door open to issues down the road, such as claims of interest from a past untitled spouse.  Keeping these things in mind will be helpful when you are buying or selling real estate.

If you or your clients have questions about marital status or vesting on a current or upcoming transaction, please give us a call! It’s our job to help.

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!

 

 

 

Earnnest: the future of real estate transactions

Last March we introduced our partnership with Earnnest, a tool that allows for the fully digital transfer of funds (much like PayPal or Venmo) but made for real estate transactions! That means it was designed with safety and security in mind.

Earnnest provides a way for the digital transfer of client earnest money into the title company of your choice’s escrow account, verifies “good funds,” and distributes documentation of the payment and deposit to all parties.

How does it work?

The title company or the buyer’s agent can complete a request for earnest funds through the Earnnest app.  We are happy to complete this request on behalf of the realtor – just ask us!  In order to, we will need your buyer’s email, phone number, the property address, and the dollar amount. Your client will then receive a text and an email that “Tallgrass Title” is requesting funds.

     

Utilizing electronic methods of contract signing and delivery along with Earnnest allows your client’s new home to go under contract in minutes with zero travel and zero wire fees. The only cost associated with Earnnest is a $15 processing fee paid by clients when they complete the request.  With wire fees approaching $30 or $40, this saves you time and your client money.

What makes it secure?

Earnnest is partnered with the payment processor Dwolla, which sets up a secure connection between all parties with multiple levels of encryption. Earnnest uses Plaid to connect the buyer to their bank to complete the earnest money request and neither party obtains or stores your client’s bank account credentials or financial information.

It’s quick!

Once the buyer completes the request for earnest funds, all parties – the escrow company, the realtors involved, and the buyers – receive an email receipt verifying “Proof of Payment.” This tells us that the earnest money has been withdrawn from the buyers account, is verified as good funds, and is on its way!  Within 3 days, all parties will receive another receipt called “Proof of Deposit” – this tells us that the funds are officially in the hands of Tallgrass Title.  Contrary to how quick handing over a check seems, it isn’t always so fast.  Personal checks can take up to 10 days to clear the bank. Earnnest is the cleanest and quickest way to ensure the secure delivery of earnest money.

While entirely coincidental, adding Earnnest to our toolkit when we did was a gamechanger! Many of our everyday business practices have changed and we will continue to adapt as we move out of the Covid-era.  Adopting cutting edge tools for secure and paperless transactions will continue to be our standard.  We’re happy to utilize PaperlessCloser, CertifID, Dotloop, HelloSign, Earnnest, and another nifty product we’ll share with you in a couple of weeks that is going to make mobile transaction information and document access a reality.

Earnnest has even more to offer than we can cover here, if your curiosity is brimming, give us a call! Or you can check out Earnnest here! And if your client wants to complete their earnest deposit through Earnnest, we’d be happy to place the request for you or show you how!