Washington Buyer and Seller Guide for Title and Escrow

• Bankruptcies • Business trusts • Clearing liens and judgments, including child or spousal support liens • Encroachment or off record easements • Establishing fact of death–joint tenancy Family trusts • Foreclosures • Physical inspection results–Encroachment, off-record easements • Probates • Power of Attorney–Use of, proper execution • Proper execution of documents • Proper jurats, notary seals • Recent construction • Transfers or loans involving corporations or partnerships • Last minute change in buyers • Last minute change in type of title insurance coverage TAXES: These are usually standard, showing the status of the current tax year. RED FLAG: Postponed property taxes is a program put on by the state for senior citizens. It allows the owner to postpone the taxes until the property is sold or refinanced. The owner applies to the state, and the state provides “checks” that the owner uses to pay the taxes. The reason this is a red flag is because a demand will need to be ordered from the state by escrow in order to pay off the postponed taxes. It may take up to two weeks to get a demand. CC&R’S: These are standard. The CC&R’s should be provided to the buyer within the title report. The buyer should read these thoroughly, especially if improvements to the property are contemplated. RED FLAG: Some CC&R’s prohibit certain types of improvements. EASEMENTS: These are also standard. Most easements in newer subdivisions (20 years or less) are contained in the street. Some subdivisions have nonexclusive easements over portions of the property for such things as maintenance of side yards, access to common areas (like golf courses), etc. RED FLAG: If improvements are contemplated (such as construction of a pool or spa for example), then the buyer should determine that there will not be any interference to contemplated improvements. However, you should be aware that easements are very difficult to get removed, and your client may be better off with another property if an easement interferes with his future plans for the property. AGREEMENTS: These commonly take the form of road maintenance agreements, mutual easement agreements (like a shared driveway) or improvement agreements, and will bind the owner to certain actions. A copy of the agreement should be requested from title and provided to the buyer. It is the buyer’s responsibility to contact their own counsel if they do not understand how the agreement would affect them. A “red flag” is a signal to pay attention! Below are some of the items which may cause delays or other problems within a transaction and must be addressed well before the closing. 27 RED FLAGS IN THE ESCROW / TITLE PROCESS