Thursday, January 8, 2009

Listing Agents: Help Us Help You

Title companies ask for a lot of information. I know some of it appears redundant. Some of it, you may think, is obtainable from the public records. There are, however, some pieces of information that can only come from the seller, and which we need to not only get the ball rolling but to put it through the hoop. Key information which -- if provided -- can very quickly reduce the turnaround time on a file, yet -- if lacking -- can seriously delay it:

  • Seller's Social Security Number (SSN) or Employer Identification Number (EIN): We need this to complete various closing documents, and also to order the payoff statement for any outstanding mortgages or deeds of trust.
  • Any and all open mortgages / deeds of trusts / lines of credit with a signed authorization to release information: Yes, the title search will bring up what's of record, but wouldn't you rather us order the payoffs in advance? Also, many lenders will not give us a payoff with a signed authorization.
  • Whether the property is subject to any lease or ground rent, and if so the name and phone number of the fee holder.
  • Name and contact information for any HOAs, condo associations, or front foot utilities which collect a fee for servicing the property. Depending on the jurisdiction, these entities may not have published contact information.
  • Whether the seller is a foreign person, or a non-resident of the state where the property sits, as this may trigger a federal or state tax withholding.
  • Whether the property is held by a trust, corporation, LLC, or other entity, and who, precisely, the trustees or principles are. This is required so proper authorization documents and signature blocks can be prepared. If the property is held in a trust, we will most likely need to see the trust documents!
  • Whether the property was part of a recent separation or divorce. Most divorce stipulations or separation agreements dispose of the real estate held by the husband and wife, and a sale can trigger payouts from one party to the other.
  • Whether the seller is involved in a bankruptcy. Very important, as the seller's right to convey property can be greatly impacted by a bankruptcy court.
  • Whether the property is part of a 1031 Exchange. Our closing documents and settlement statement change when a qualified intermediary is involved.
  • A copy of the seller's owner's title insurance policy from when they purchased the property. This helps on a number of fronts: (1) if there is a title problem that predates the seller's taking title, the policy may prevent a delay in the sale ; (2) we may be able to use the policy as a "starter" to perform the title search quicker and with less expense, and (3) the buyer may qualify for a reissue rate, or a reduced rate on title insurance.
Agents and title companies share a common goal: to get to a successful closing at the settlement date. Good and timely information from the seller is a big piece of the puzzle. We ask for this directly from the seller, but where you can prep your client that this information is needed or encourage their submission of it, we're all a little closer to getting to that goal!