Apr 19, 2019

The Blankety Blank Problem with your Real Estate Contract

When you review contracts every day, spotting mistakes can become routine. The number one mistake that most escrow officers see on real estate contracts involves blank spaces. To be clear – contracts should always be filled in completely. There should be nothing left blank. 
I’m referring to the standard Texas Real Estate Commission (TREC) contract. Ninety-nine percent of real estate contracts received by title agencies are written on one of the standard TREC contracts. These are created by TREC for use in real property transactions in our state. They are frequently reviewed and are updated every few years based on feedback, requests, and legal issues.
There is a valid reason for each paragraph and blank space on these contracts. There are dozens of blank spaces on the most popular TREC contract. They all should have something on them. Some paragraphs have an option to choose from two or more boxes to check. One of the choices should be selected.
Yet, we see smart people submit final contracts that leave too much ambiguity because they are not fully completed. Obviously, most folks ensure the contract contains the proper names, address, sales price, who is paying for what, etc. But often they leave some parts of the contract incomplete.
How do we know the intention of all parties when a space is left blank? Perhaps the blank space means zero dollars. Then it should have a zero written. Or maybe it is not applicable? It should show N/A. Maybe it was accidentally missed? Or was it intentionally ignored? Even dashes in the space helps us see that the parties didn’t intend to mean something else.
If a space is blank because buyer and seller are still negotiating, then the contract should not be executed yet. Once it is executed, any changes must be made with an addendum. Changes are not allowed on the finalized contract once it is executed.
The riskiest and most overlooked blank spaces typically found on contracts include:
Paragraph 2D: Exclusions. If there are no exclusions, then write None. Plenty of disputes arise when a seller takes an item (like a favorite light fixture) and forgot to note it in the contract.
Paragraph 6A(8): There are 2 boxes regarding survey coverage and one of them should be checked. Who is paying for the survey coverage should also be documented.
Paragraph 6C: Who will provide the survey, when will they provide it and who will pay for it if a new one is needed.
Paragraph 6D: Put a number in the blank for number of days that the buyer has to object to title or survey issues. Most folks don’t think this blank really matters – until it really does.
Paragraph 7H: Will the seller be purchasing a home warranty for the buyer? If not, put zero in this blank. If so, fill in an amount they are willing to pay.
Paragraph 12A(1): If the seller is paying any of the buyer’s closing costs, fill in the amount. Otherwise make it zero.
Paragraph 21: Please, please, please fill in the buyer and seller contact information. Without it, we have no way of contacting these people and there is no way to given them notices, documents, etc. The title company can attempt to track people down. But they may not receive crucial information in a timely manner if we have no way to reach them. Leaving this space blank can drive title agents to swear.
Fill in the blanks to avoid turning your document into a blankety blank contract.
The opinions expressed are of the individual author for informational purposes only and not for the purpose of providing legal advice. Contact an attorney to obtain advice for any particular issue or problem. [where: 75230]

Apr 15, 2019

Voice of the Title Agent Survey

The “2019 Voice of the Title Agent” is hot off the presses from The Title Report. This annual survey gives an idea of how folks in the title business are doing and their outlook for the coming year. The study covers a variety of topics related to the state of the title industry.

When questioned about business in the coming year, most title agents surveyed were optimistic about the future. More than 56 percent are anticipating some level of growth in 2019. However, they aren’t as expectant as they’ve been over the past few years. Last year, more than 66 percent of title agents anticipated growth. While the majority of agents are expecting growth, the number who feel their business will drop or remain flat continues to increase.
The low unemployment rate and healthy economic conditions were felt to benefit the title industry and title agents. The economy also topped the list of concerns for title agents. Cyber threats and increased operating costs were chief concerns as well. These were the top three worries in the 2018 survey, too.

The hardest job in the title business is thought to be the residential loan closer, called an Escrow Officer in Texas. I’ve always thought it was the sales side of the business that is the hardest. However, some respondents felt that one of the reasons the closer’s job is most difficult is because they deal directly with the public and those who don’t understand the title industry. On that, I would agree.
The report exposed the concerns many title agents have about the aging of this industry. The title business is growing old in many ways. Of the title agents surveyed, 55 percent work for companies that have been in the business for more than 20 years. Most of them are independent, with fewer than five offices.

Title company ownership across the country is dominated by people approaching or past retirement age. Agents are uneasy about the exit strategies for these leaders and where the next generation of title agents and owners will emerge. For the most part, cybercriminals, fraud, and security combine to be the greatest concerns for title agents. Keeping their information and customers safe is their focus for 2019. [where: 75230]

Apr 12, 2019

8 Forgotten Tasks when Moving

Moving is exciting. And exhausting. There is a whole lot to do. Packing and unpacking, emptying and reloading cabinets and drawer. You may even be painting and remodeling.
Every day, I meet people who are immersed in the moving process as they are signing closing documents. They usually have their heads and hands full of things to do. But there are a few more items I want to tell them to take care of before they finish unpacking.
I’ve moved more than 20 times, including eight home remodels, which helped me come up with a list of eight essential tasks that you may not think about when moving. Make it a goal to complete these in the first couple of days of your move.
Tackle these eight items first. If you’re overwhelmed, hand this list to someone who loves you and ask them to assist. 
Here are eight important things to do when you first move in:
1. Change the locks. It’s not expensive. My favorite company is Mr. Rekey. They charge about $100 for 6 key holes. Reprogram your garage door opener codes too. While your sellers might be nice, honest folks moving out of state, you don’t know who else has a key to the property.
2. Locate emergency shut offs. Understand how to shut off the water and power in your home. You’ll sleep better knowing this.
3. Check and service smoke alarms. Smoke alarms and CO monitor batteries should be checked and replaced regularly in order to function properly. Since you may not know the age of the devices and batteries in your new home, consider starting fresh.
4. Change your A/C filters. This will help clear out the dust that’s been kicked up during the move. A clean filter also helps your system function more efficiently and extends its life.
5. Check pilot lights. Check the pilot lights on stove, water heater, gas fireplace, and furnace. Since utilities have been transferred, there could be a need to relight them.
6. Learn to use appliances. Learn how to operate any appliances in the home that are new to you. This includes fireplaces, icemaker, garbage disposal, etc. There may be important operation or care instructions necessary for proper function and safety. If you don’t have manufacturer owner’s manuals, look them up online.
7. Label wall switches and electrical boxes. I always label switches in my house with small printed labels that note if the switch is a light, fan, disposal, porch, garage, etc. It makes everyone’s lives easier.
8. Ignore the junk mail. You’ll be bombarded with official looking letters marked “urgent”, “important”, “official” and “response needed”. Ignore all offers for mortgage protection insurance, deed records, and filing your homestead exemption. Titles and deeds are filed with the county by the title company and a separate paper copy is worthless. You can file your homestead exemption online for free.

Happy moving!  [where: 75230]