It’s always interesting when I speak with buyers or even Realtors who think Title Insurance is something that is not needed. A scam or a worthless cost to a real estate transaction. I hear–“yeah, but what are the chances I will ever use this policy?” I tell them that just like other types of insurance, you don’t need it–till you need it, then you are really glad you have it. We see all kinds of hair on transactions in our office and we are currently resolving one of these hairy issues. It’s the very first transaction a new client of mine sent us, so of course, I’m working with all parties to make sure all ends well. The story behind it is a good instance of why you need Title Insurance when buying a home and how it protects you.
When someone buys or sells a home there are fees charged to both the buyer and seller. The buyer pays most of the fees in my area (Northern VA-Washington DC), with the seller paying commissions and some other smaller fees. One of those fees is the seller settlement fee. This charge sometimes gets lost in the shuffle as the buyer fees dominate conversation in the transaction. Just the other day, I had a crazy transaction where the listing agent through a huge fit because he thought our seller settlement fee was frivolous and as a Title Company, we represent the buyer, so the buyer should pay it. Far from the truth! I still find it interesting how many Realtors still don’t understand the charges on a settlement statement or where it says in a purchase contract, who pays for what. In this blog, I want to go over the seller settlement statement and explain the charges so anyone selling a home knows what that charge means at closing.
As a licensed Realtor, mortgage lender, or Title Company escrow officer, you see various real estate contract language that has you cringing. It also has you wondering WHY someone would structure a deal a certain way. Sometimes there is a direct intent, sometimes not. There are many ways to create transactions through language, but others that create not only confusion and stress for the parties involved. The other potential major issue is other “ramifications” down the road for the Realtor and/or clients.
My name is Wade Vander Molen “DCTitleGuy” and I am a Director of Sales/Marketing for Stewart Title and Escrow in Fairfax, VA just outside of Washington DC. I have been in the Title Insurance industry since 2005 having worked for a National Title Insurance company in Phoenix, AZ. Over the past 7 years I have worked and helped the Realtor that is “one day” into their careers all the way to the top agents in Phoenix, AZ. Helping them with their marketing plans and expanding their businesses, offline and online. Then one weekend in Las Vegas back in 2010 changed (met my wife) all of that and 2 years later I am in Washington DC! That is the short and skinny of me, my background and how I came to be DCTitleGuy.
For quite a while, there have been rumblings in our industry about eClosings. If you are unaware about eClosings, they allow us to conduct a settlement with a buyer/borrower electronically over a computer. Essentially we are doing a “face-time” with the buyer and they sign their closing documents similar to DocuSign. The documents are “e-notarized” and “e-recorded.” If you think this is too outside the box, keep in mind, this technology has been used for years for many things we do in our normal lives. I can pay my mortgage on my phone through an app, or I can order Domino’s Pizza and know online exactly when it goes into the oven. Why not closing on a home? The eClosing process is very easy and Stewart Title has partnered with Pavaso to make things even easier for our clients. Here is a press release that just came out:
Ever since the new TRID rules came into effect in 2015 we have seen people opt-out and waive Owners Title Insurance on the final Closing Disclosure. Doesn’t help that Owners Title Insurance can be found under the “Other” section on the CD and “Optional.” It’s always been optional to obtain, but I feel they could have done a better job of not making it appear as a non-meaningful purchase. Every month, we have a handful of people that decide to waive Owners Title Insurance and find it as a useful way to save money on their real estate transaction. Waiving Owners Title Insurance may seem smart at first, but has a long-lasting impact on your largest asset, especially when you decide to sell your home. Before you decline his one time purchase–look yourself in the mirror and ask yourself these questions.
Recently in the last few months we have seen a ramp up of hacking attempts to steal money from homeowners trying to close on their real estate transaction. This hacker wire scam is fairly savvy and has worked on a few occasions. Most notably, last week in the Washington DC area, a family wired $1.5 Million to whom they thought was the Title Company closing their transaction. Turns out, it was hackers trying to steal their money, and they were successful. The Title Company and FBI are working together to get the people their money back. The case is ongoing.
With this serious issue happening more and more, I wanted to make our audience aware of how the hacker wire scam works, how to spot it, and how to protect yourself.
When a Realtor tells me they have a ratified purchase contract, it always make me smile. That means a Realtor has entrusted Stewart Title to handle their transaction and get their clients to closing. There are many things that happen between the day of contract ratification to closing. The lender has their job, the home inspector, appraiser, and the many items asked of the “soon to be” home buyer. The one role where many people are unsure of what happens behind the scenes is the Title Company. Ask most homeowners where they signed their closing documents and many don’t remember, let alone understand what this Title Insurance policy is all about.
When a there is a ratified purchase contract sent to Stewart Title, what happens next? What is the role of the Title Company, that ends with a homeowner signing documents?
I want to begin by saying Realtors are not “forced” to use the joint venture Title Company. With full access to the brokerage’s agents, office meetings, events, and a push from the Broker, the business capture rate on the real estate joint ventures is fairly high. Joint ventures between Title Companies and Realtor brokerages have existed for quite some time and are fairly prevalent today in the Washington DC/Northern Virginia area. Perhaps they exist in your market as well and maybe you currently participate in one. BUT…what if real estate joint ventures were told to disband and can no longer exist–effective tomorrow?
In the last few months, we have had some transactions in which the buyer has waved purchasing the Owners Title Insurance Policy. That is their right to do so as “technically” it is optional. What many buyers don’t take the time to learn are the many upsides and protections Title Insurance Policies provide. Not purchasing a policy on your largest asset can have lasting affects even after you sell the home.
We ran into a specific situation last week where the buyer didn’t purchase the Owners Title Insurance Policy, AND they also forgot to order their survey. The Realtor wanted to order a survey after closing, then inquired what would happen if there was a survey issue after the fact? I told her that the “Survey Exception” is part of the protections laid out in the Owners Policy…which her clients declined. She freaked out. Here are 3 major items that are helpful to buyers regarding Title Insurance Polices.