Listing Agents: Ask for Seller's Title Policy at Listing

As a listing agent, you likely have a checklist of items to gather or pull from various sources, including basic information from the seller. Here's a thought which could save time and money later down the road: Ask the seller to produce her owner's title policy (if she has one) at time of listing.

Here are just a few reasons why this simple step could prove so valuable:

- If a prior-owner unreleased lien surfaces during the title search, you'll know exactly which title insurance company to contact, and they should expedite the clearing of the issue.

- The policy should disclose any matters that a prior survey or location drawing has revealed.

- The policy should disclose if the property is subject to ground rent.

- The buyers may be eligible for a "reissue rate" of title insurance premium. While benefitting the buyer, this cost savings can be an inducement thereby aiding the seller.

- Asking at time of listing rather than several days before settlement could be the difference between the seller having it available and it being packed away in a moving truck.

Some sellers won't be able to find it. In that case, a copy of the HUD-1 from their purchase can also be very helpful as it tells which title insurance company the policy was written on so a copy can be obtained directly from them.

Make sense?

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!

October Title Tips: Taking a Listing

While a title or settlement company's primary role in the real estate transaction is to conduct the physical settlement, much goes into the documentation leading up to the closing. Below is a list of items a listing agent should keep in mind when taking a listing to ensure that the title company has the proper information and can prepare correct and accurate closing documents -- thus ensuring a smooth closing:

Tips for Taking a Listing

1. Before meeting with the clients, check the State Department of Assessments and Taxation website (or equivalent source in your state) to see who is listed as the current owner. In Maryland, the SDAT site is http://sdatcert3.resiusa.org/rp_rewrite/. Are the parties signing your listing agreement the same as those listed as the current owner?
2. Ask the sellers if they have a copy of the Deed. Is the property fee simple or is it leasehold? If the property does have a ground rent, is the ground rent owner known?
3. Are any of the sellers deceased? If so, a copy of the death certificate will need to be provided to the title company. If necessary, has an estate been opened, a personal representative appointed?
4. Is the property owned by a Limited Liability Company (LLC) or a trust? Does the person signing your listing agreement have the authority as recited in the operating agreement for the LLC or under the trust agreement?
5. Is a Power of Attorney going to be used in the transaction? The sellers must be made aware that the Original Power of Attorney must be recorded in the land records, so they will have to give it to the settlement agent at closing.
6. Are the sellers divorced? The title company will need to see a copy of the separation agreement to comply with the division of proceeds as recited in the agreement.
7. Are the sellers residents of the state in which the property sits?
8. Are the sellers U.S. citizens or permanent residents?
9. Are the sellers 60 days or more in default on any mortgage that they have on the property?

While this is not an all-inclusive list, it should provide a listing agent with some insight into what a title company requires to get to that all important closing date!