Whether buying or selling a home, reaching mutual agreement is an exciting moment. While this feels like a victory, there’s an important final sprint to contend with and it takes place accompanied by experienced title and escrow partners. It is their job to carry out the transaction, per the terms of the agreement, doing their very best to ensure that the transaction closes without a hitch.
SeattlebyDesign recently spoke with a trusted title and escrow partner, a true expert with more than 30 years of experience, to illustrate just a few of the matters they seek to address prior to the transfer of ownership. We hope you find this information helpful and, as always, we welcome any feedback, questions, comments or concerns. Above all, we’re dedicated to successful outcomes, which often starts with educating our clientele.
Access will need to be obtained through agreement with affected property owners or land acquisition.
If a party is in bankruptcy, it will require a court order to sell, purchase, or mortgage.
DEED OF TRUST
Deeds of trust, which are paid off but not reconveyed, require a econveyance from the trustee or a court ordered satisfaction to remove it from the record. The title company may insure around these encumbrances in certain situations. Escrow will handle this prior to closing.
EXTENDED COVERAGE MATTERS
A supplemental will be issued if these matters have been cleared by an inspection of the property. If the supplemental shows a question of encroachment, lien rights, or other matters, these must be cleaned before the lender will close. If an extended coverage owners policy is requested, an ALTA/ACSM survey of the property may be required.
FEDERAL TAX, LIENS
Pay-off and released must be obtained by IRS.
HOUSING CODE VIOLATIONS
Violation usually needs to be corrected and appropriate releases obtained from the building department.
The legal description should always be compared to the legal description in the purchase and sale agreement to be sure all property being conveyed has been included and thereby covered in the preliminary commitment.
JOINT USE MATTERS
Driveways, party walls, and access easements may require a joint maintenance agreement by the lender. The title report will show the agreement if one is recorded.
JUDGMENTS AGAINST SELLER OR BUYER
If against seller, must be paid from proceeds or release of judgement obtained from attorney from creditor. Against the buyer, they must address these matters with their lender.
Lien paid at closing and/or release of lien obtained from lien claimant’s attorney. Depending on the circumstances, sometimes a monetary hold back can be arranged; contact your title account manager or title officer.
NUMEROUS MATTERS OF RECORD AGAINST PEOPLE WITH SIMILAR NAMES
Principals complete Statement of Identity/ID Affidavit.
PAID, NON-RELEASED LOANS
Research must be done to determine the circumstances surrounding the lack of release: is the debtor or creditor/beneficiary still holding the original note and deed of trust? Did beneficiary ever prepare the request for reconveyance? Were these documents ever submitted to the Trustee of the Deed of Trust? Does the borrower have any kind of proof of payment?
If you are willing to wait through the process, in some cases, debtors will negotiate lower pay-offs to facilitate the transaction. It helps to start with an estimated closing statement, prepared by escrow, showing the shortfall.
Most likely, the lawsuits will need to be resolved before transaction can close. Depending on the circumstances, sometimes a monetary hold back can be arranged; contact your title account manager or title officer.
REAL ESTATE CONTRACTS
Fulfillment deed will have to be located or obtained from original contract seller or their heirs.
RECORDED SURVEY EXCEPTION
May disclose an encroachment.
SELLER IS DECEASED, PROPERTY OR PROBATE
Death certificate for the deceased; resolution of the probate; copy of community property agreement copy of the last will and testament, lack of probate affidavit, in some cases deeds from potential heirs.
SELLER IS PARTNERSHIP, LLC, TRUST OR CORPORATION
Agreements creating the legal entity must be reviewed by title and escrow.
SELLER NOT VESTED IN TITLE
Resolution will depend on the exact vesting situation; contact your title account manager or title officer.
STATE WARRANTS, STATE TAX, LIENS
Pay-off and releases must be obtained from appropriate state agency.
TAXES AND ASSESSMENTS
Disclose to your buyer any exemption or classification design actions that may change the tax amount as a result of the sale or loan.
Check to make sure your seller is vested in the property. If they are not in title, look for a real estate contract as an exception. A fulfillment deed will be required to close.