Beware of 16 Red Flags that could delay your escrow closing

Avoid red flags that could delay escrow closing

Terms such as “Notice of Trustee’s Sale” are what we would refer to as a Red Flag. And sometimes they can slow down an otherwise smooth transaction. Some attention may need to be paid to these.

For today’s home-buyer it’s plain to see the immense value that a thorough real estate title examination brings.  The greater economic challenges of the last few years has trickled into the real estate transactions of today by way of what we call “clouds on title”. And lately the clouds have been plentiful.  Not to worry, however! Identifying potential “red flags” on a title report early in the process can save time in the long run and help set proper expectations for everyone involved in the real estate transaction.

A familiar story…

Our friend Rick the Realtor was happy to find his buyers the perfect home.  Their offer had been accepted, and next, he expected to review the sellers Title Report.  Everything looked great until Rick saw a recorded Notice of Trustee’s Sale.

Terms such as “Notice of Trustee’s Sale”  are what we would refer to as a Red Flag.  And sometimes they can slow down an otherwise smooth transaction.  Some attention may need to be paid to these.

Thanks to being aware of Red Flags, Rick the Realtor knew that some fact finding would help settle whether or not the Notice of Trustee’s Sale that he saw was really an issue.

At Ticor, we’re always glad to help you understand what these terms mean.  And, most importantly, we’ll work closely with you, to help address and resolve these matters early in the course of the transaction.

16 Examples of Red Flags to be aware of:

  • State Warrants
  • Federal tax liens
  • Mechanics’ liens
  • Encroachments
  • Seller not vested in title
  • Property in estate or probate
  • Property over-encumbered
  • Judgments against seller or buyer
  • State tax or Support liens
  • Pending law suits
  • Paid, unreleased loans from individuals
  • Real estate contracts
  • Access questions
  • Housing code violations
  • Statement of Identity / I.D. Affidavit
  • Short Sales
*This is a partial list of what we may consider to be red flags. For more information please contact your Ticor Representative.

What is an Easement and Why Should I Care?

property easement

You’re out shopping for property and may have just found your dream home when your Realtor® informs you that “the driveway easement to the street runs over the neighbor’s property over there.” Great! Huh? Is that a problem or what? In this case it’s not a problem at all. The copy of the title report that the listing agent provided confirms that the easement is included in the legal description and is therefore “ok”.

In our scenario the dream home property benefits from the easement over the abutting neighbor’s property. That same easement burdens the neighbor’s property.

So, what exactly is an easement? One definition that I like a lot is: “the right to use someone else’s property for a specific purpose.”

adj. pertaining to something that attaches. In real property law this describes any right or restriction which goes with that property, such as an easement to gain access across the neighbor's parcel, or a covenant (agreement) against blocking the neighbor's view. Thus, there are references to appurtenant easement or appurtenant covenant.

The dream home property has an appurtenant easement over the neighbor’s property. Its owners and/or guests have the benefit of coming and going over the driveway area without needing permission from the neighbor to cross over their land. On the other hand the neighbor that is burdened by the easement must not impair or restrict the use of the easement area on their property.

If a piece of property does not abut or “touch” a public road it will be necessary to establish an easement over the parcel(s) of land that lie(s) between the nearest public road and the property. Without a valid easement a property owner may not have the legal right to go over their neighbor’s property and that could cause big problems down the road (pardon the pun). Without legal access a property is said to be landlocked or having lack of access.

Not to worry! Once you purchase your dream home you can rest assured that your Ticor Title policy insures that you the owner have access rights.

If you have an active transaction with Ticor Title  and would like to review the preliminary title commitment with us, please contact your Ticor Representative or call our headquarters at 425-255-7575.

Why do I need Title Insurance? The Tale of the old Utility Agreement…

Water and Sewage pipes of a Jerusalem ~1930 bu...

Image via Wikipedia

Why do we need title insurance? Let us count the ways…  Below is a scenario that came about in an older, well established neighborhood with a rich history of utility technologies (i.e. a variety of plumbing and utility technologies from the last 80 or so years).  Needless to say, in this case a title issue arose when plumbing and utility upgrades became necessary.

The Old Utility Agreement Rears its Head

The Old Agreement
In 1975 an agreement was recorded between Bill Home Owner and the local utility company.  This agreement allowed a sub-standard temporary hook-up to utilities (a water line).  The agreement stated that the owner would pay a fee at a later time to connect to the water system when the utility company installs / upgrades their system.

Fast forward decades…
The property had been bought and sold several times since the agreement was established.  But, when the utility company completed their upgrade, this triggered the need for the homeowner to upgrade their connection to the utility per the 1975 agreement.  The cost of this upgrade in today’s dollars is approximately $5,000, a substantial amount that the current home owner did not anticipate when purchasing the home.

The Resolution
Jake and Susan, the present home owners, tendered a claim to Ticor Title with whom they are insured.  And in this particular case, it was determined that the matter was covered under their title insurance policy.  Ticor coordinated with Jake and Susan and the utility company to pay the outstanding amount owed to the utility company per the agreement.  Ticor also received a release of the 1975 agreement from the utility company and recorded the release in order to remove the cloud on title.

Ticor Title is backed by the nation’s largest title insurance claims reserves, giving us a strong financial position and unsurpassed ability to pay claims for our insured. If you are unsure of your current title insurance company’s solvency or ability to pay claims, or have questions about your coverage, please contact us.

Best Regards,
Ticor Title

This story was provided by Gregg Colbo, Senior Underwriter, Ticor Title.  This story is based on real life circumstances.  However, the names of the people in this story are ficticious and were chosen randomly.  The intent of this article is to illustrate the value of title insurance.

The Anatomy of a Non-Judicial Foreclosure in Washington State

Real estate loans (usually in the form of deeds of trusts) can be foreclosed through court proceedings (a judicial foreclosure) or outside of the court’s involvement (a non-judicial foreclosure) in the State of Washington.  If a deed of trust contains a clause which provides “power of sale” to the trustee (a designated party listed on the deed of trust) and a statement which confirms that the property is not being used principally for agricultural purposes it may be foreclosed non-judicially. Otherwise it must be foreclosed judicially.

Here’s what happens in a non-judicial foreclosure:

  • Loan payments are not made and a default occurs.
  • Once a default has occurred the lender (or the trustee) sends a written notice of default to the borrower by first class mail and either registered or certified mail. The lender must also post a copy of the notice in a conspicuous place on the premises or personally serve a copy to the borrower.
  • If the borrower does not pay the outstanding amounts (i.e. cure the default) within 30 days of the issuance of the notice of default the lender may authorize the trustee to issue a notice of sale. The sale may not take place less than 120 days from the issuance of the notice of default.
  • If the borrower does not cure the default the trustee sends a written notice of sale to the borrower by first class mail and either registered or certified mail. The notice is also sent to parties with recorded/filed monetary encumbrances (i.e. deeds of trust, mechanics liens, judgments, etc…) and the plaintiff(s) in any filed court action and any party who has recorded a request for notice as specified by law. The trustee must also post a copy of the notice in a conspicuous place on the premises or personally serve a copy to any occupant. The notice is also recorded with the county auditor and must be recorded at least 90 days prior to the sale date.
  • The sale (i.e. trustee sale) may be halted up to 11 days before the sale date if the default is cured or the loan is fully paid. After that time the lender does not have to agree to accept payment.
  • If the sale is not postponed (by the borrower filing bankruptcy) the trustee will “cry” (i.e. conduct) the foreclosure sale in the public place at the time and location specified in the notice of sale. The sale is usually held on the front steps of the county courthouse but it could be held in any location. The sale must be held on a Friday between the hours of 9 a.m. and 4 p.m. If the Friday is a legal holiday the sale will take place on the following Monday.
  • Once the sale takes place the deed of trust is foreclosed. A Trustee’s Deed is recorded soon afterwards and the successful bidder becomes the owner.

Best Regards,
Gregg Colbo
Sr. Underwriter
Ticor Title

Why Do I Need Title Insurance? The Tale of the Lingering Line of Credit…

Why do I need Title Insurance? Good question.  And there are many good answers.   Title insurance is one of those things that property owners may not appreciate until it comes time to make a claim.  And when a claim is covered, that property owner thanks their lucky stars (and their Title insurer) because claims can be very costly.

Here is one scenario that illustrates why having title insurance with a company that has a large claims reserve is a good thing:

Johnny Home Owner took out a line of credit loan which was secured by his property in the form of a Deed of Trust.  Some time later, Johnny Home Owner sold the property to Sally Home Buyer.  The sale closed in a seemingly normal fashion and Sally Moved in and proceeded to make her house payments on time.

The Hitch:
A step in the closing process was inadvertently missed, allowing Johnny to continue to draw thousands of dollars of funds from the Line of Credit which was still secured by the property that is now owned by Sally.  “What?,” you ask.  How is this possible?

The step that was overlooked:
Specifically with a Line of Credit, the borrower (Johnny) needed to send a written statement to the lender in order to close the line of credit.  Unlike a regular loan attached to a deed of trust, a Line of Credit cannot be closed without a written statement from the borrower (Johnny).  The lender will not release the property now owned by the buyer, without that written notification.

Sally Home Buyer went into foreclosure:
Months after moving into her new home, Sally received a foreclosure notice against her new property from a lender that she didn’t recognize.  Alarmed, she investigated and discovered that  Johnny’s Line of Credit is attached to the property and in default.

Never fear, Sally Home Buyer has Ticor Title Insurance…
Sally, alerted Ticor Title of the foreclosure against her property due to the previous owner’s outstanding Line of Credit.  Ticor evaluated the situation and in this case took steps to stop the foreclosure, eliminate the Line of Credit, and remove the cloud on title.

The moral of the story:
Choosing a title company with a hefty claims reserve will make all the difference in the world when it comes time to cover a claim.  Ticor Title as a member of the FNF family of companies, has the nations deepest claims reserves at $2.6 Billion dollars.  The choice is yours!

If you have questions about title insurance, you can call or text us at 253-318-1909.

This story was provided by Gregg Colbo, Senior Underwriter, Ticor Title.  This story is based on real life circumstances.  However, the names of the people in this story are ficticious and were chosen randomly.  The intent of this article is to illustrate the value of title insurance.

The Two Ways to Order Title and Escrow Online

Two are better than one… (even when it comes to ordering title and escrow online)

We offer two ways to order title and escrow online.

Ordering title and escrow online is not a new thing for real estate professionals in Seattle, Tacoma, and the surrounding communities. But for us at Ticor, allowing our clients to place a title and escrow order online without logging in to is a new thing.

In the past, we have required our clients to create an account on our site that stores basic information like what real estate brokerage they are affiliated with, their phone number, email address, and who their representative is at Ticor, etc. In reality, this is the most efficient way for users to use our website. When logged in, placing a title and escrow order is quicker because the order forms will already be populated with the Real Estate agent’s or Loan Officer’s contact information. This saves a bunch of time keying in basic info when it’s time to order title and escrow.

But, we realize that not everyone wants to register on our website and remember a username and password. So we have created a title and escrow order form that is available for users that are not logged in to Ticor’s website.  There are a few required fields that are necessary for us to identify who is placing the order of course.  But the rest of the form has the same familiar fields that our loyal clients are accustomed to.

Thanks for the orders!
Matt Sweet
Marketing / Technology Integration
Ticor Title

Have you checked your title company’s claims reserve lately?

Have you ever heard anyone say, “You don’t need insurance until you need it? ” It sounds a bit obvious and silly, but it’s true. Title insurance is one of those things that is sometimes looked at (and soon forgotten) as just a line item on the HUD 1 Settlement Statement. Many people don’t realize just how valuable a title insurance policy can be until it’s time to file a claim on what is most likely their biggest asset, the family home.

We won’t go into any horror stories today ( and how title insurance saved the property owner). There’s one point we want to make. When shopping for a title company for your next real estate transaction, please consider the claims reserve (or claims paying ability) of your title company. If by chance you choose a title insurance company that does not have a healthy claims reserve, you may find yourself in a precarious position should they encounter a surge in claims.

Ticor Title is backed by our nation’s largest claims reserve at $2.7 Billion dollars. It’s hard for most people to even imagine how much money that is. But it suffices to say that insuring the title of your property with Ticor is a smart move. Rest assured.

We’ve got you covered!