When someone can’t make it to the title company on closing day to sign the necessary papers, a popular solution is to use a mobile notary. Mobile Notary services have been around a long time and are more sought-after than ever now. 

Notary services are crucial in real estate transactions. Several documents are required to be notarized in order for a property to change hands. Validating signatures and identities of signers keeps the process authentic and reduces the chance of fraud. 

Unlike signing in a traditional title office setting, a mobile notary travels to the client’s location to meet them in person.

Benefits

Mobile notaries offer a convenient service.

“I can travel to your home, office, or any location you need. Those could include a business, hospital, hotel, coffee shop, or parking lot,” says Henry Eford, a Certified Loan Signing Agent. “I go to a lot of locations that your title company may not be able or willing to accommodate.”

These bonded professionals can be scheduled just about any hour of the day and many specialize in flexible, after-hours closings. The convenience and efficiency of signing documents at your preferred time and location can save the signer the hassles of traveling to a title office. A mobile notary can be there when and where you need them. The service can be provided in any state in the U.S.

Notary/Signing Agents

There is a difference between a mobile notary and a signing agent. The typical notary’s job is to witness the signature. They do not act as an escrow officer or attorney. They cannot explain the closing documents or details of a specific transaction. If a person wants some explanation of documents they are signing, they should request a signing agent.

“Loan signing agents are notaries trained in mortgage and title documents,” says Eford. “As a certified loan signing agent, I ensure that all needed signatures and initials are obtained and I travel to the signer’s location to do so. Often my services include additional duties like printing the loan document packages, and delivering the completed loan documents to the title company or lender.”

Signing agents are screened and certified to meet compliance requirements for a remote closing.

Time and Cost

A remote closing with a mobile notary must be scheduled and approved in advance by the title company. When closing documents are signed outside of the title company office, the originals must be returned to the title company for processing, funding, and finalizing the transaction. This often requires paperwork to be signed a day in advance.

In arranging and approving for someone to sign documents with a mobile notary, the title company may consider factors like security, turnaround time, efficiency, and accuracy.

Typical mobile notary/signing agent cost ranges from $85 to $400 depending on location, the experience of the notary, and additional services like printing, scanning, and delivering originals. Maximum notary fee charges are set by each state. In Texas, notaries may charge $6 for the first signature and $1 for each additional signature. They may also charge for copies, a separate travel fee, and mileage for traveling to the customer’s location.

International notaries are an entirely different challenge. These can be complicated and require a lot of time and coordination. Often the parties are better off delaying closing until the signer is back in the country.

While the fees for mobile notary services add to the transaction costs, they are often a good value when the signer considers the convenience, expenses of travel time, and deadlines.

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Closing Costs in Texas - A Comparison

Recently released national closing cost data showed that in 2019 average closing costs remained flat despite an increase in home prices. The average closing costs in Texas was $3,744 with an average sales price of $274,163.

The average closing costs in Texas was 1.75 percent of the sales price. That put Texas ranked 28^th in the country for closing costs based on percentage of sales price.

The closing cost data, announced by ClosingCorp, calculated the cost of title insurance, appraisals, settlement fees, recording fees, surveys and transfer taxes. We don’t have transfer taxes in Texas. If we exclude those transfer taxes, Texas still ranks 28^th in the country.

The states with the highest average closing costs, excluding taxes, were Washington DC, New York, Hawaii, and California. That is a reflection of both closing costs and average sales prices being high. If you look at the highest closing by state based solely on percentage of sales price, the highest states were Pennsylvania, Delaware, Washington DC, and Maryland. Their percentage averaged more than double the closing costs in Texas.

In most states, consumers can shop around and compare closing costs like they would a mortgage loan or homeowner insurance. Title insurance rates often vary based on several factors such as the purchaser’s credit scores or amount of their down payment. The escrow, legal, and closing fees can even vary from county to county within a state.

In Texas, the cost of title insurance is set and regulated by the state. All Texas title companies are required to charge the same for a title policy. The debate comes up every few years that Texas title insurance should be unregulated. The argument is usually that the free market and more competition would help reduce the cost to the consumer. The Texas Department of Insurance actually lowered title insurance rates in September 2019. For now, the system seems to be working well for our state. 

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Title Companies are still Open for Closings

As the situation with the novel coronavirus continues to evolve, the title business is responding. Currently, the title business is not seeing many interruptions in business. For the most part, transactions are not being delayed or canceled due to current restrictions. Aside from a few inconveniences, it’s mostly business as usual in the title world. 

Most Title Company Work Isn’t Public 

More than 95 percent of the work a title company does is away from public interaction. The actual in-person, signing of documents is just a small piece of the entire closing process. In my office, tables are being wiped down after each closing. Doorknobs, counters and other areas of public contact are being cleaned throughout the day.

Many offices are requesting that only the people required to sign documents attend the closing of the transaction. Agents, lenders, and any other unnecessary parties should not come in. Demand for mobile notaries and in-home closings has increased while the availability of mobile notaries is in short supply. But there is no panic surrounding the ability to close a transaction.

Government Closings Affect Real Estate Closings

What may affect real estate transactions are coronavirus-triggered closings of local government offices. Currently, many county courthouses, district clerks, recording offices, registrars, and other depositories of public records are implementing temporary closures of an undetermined period. How ‘closed’ they are varies between cities and counties. 

There are varying degrees of office closures. Some closures are basically “We’ve gone home and no one is here until we decide to come back.” For others, it’s business as usual, but only people who work there will be allowed in the building. 

The title business relies on government offices to obtain and record vital legal documents. We record deeds and search ownership documents, liens, judgments, etc. through government offices. Fortunately, many county recording offices accept and process electronic recording of documents from title companies. Since that doesn’t involve face-to-face contact, hopefully the process won’t slow much.

Business Continuity is Critical

Government office closures are not the only concern. Private office closings may affect our ability to get mortgage payoffs, HOA documents, lien releases, and other information necessary for normal transactions. Hopefully, those companies want to keep working as much as the rest of us. 

“We have put in place a business continuity plan so that we can continue to service our customers,” says Dawn Moore, CEO of Allegiance Title. “Currently, our offices remain open. The health and well-being of our customers and employees remain our first priority. To that end, Allegiance Title is taking every precaution to prevent potential service disruptions and do our part to slow the spread of the virus.” 

Many title employees are able to work from home and remain accessible through normal channels including web-based tools, email or telephone. Social distancing is also possible given the layout of many title company offices. 

Like other businesses, the buzzwords I’m hearing in the title world are ‘evolving’, ‘flexible’, ‘patience’ and ‘monitoring the situation.’ Regardless of the current situation, the people who want to buy or sell a home are still able to do it.  [where: 75230]

How Prorations for Real Estate work

At closing, some items, like real estate taxes, are divided up between the buyers and sellers so that each party pays their share of the expenses. This is called proration. The amount each party pays is based on the number of days in the year (or month) that they own the property. It is only fair that you are charged ownership fees and taxes just for the time you own the property.

The title agency is typically responsible for dividing these kinds of expenses proportionally based on a unit of time. For annual property taxes, we divide the tax amount by 365 days to obtain the cost per day. We then multiply the cost per day by the days the seller owned the home and the days the buyer will own the home. Each party is responsible for their prorated amount.

If the taxes for that year have not been paid, the seller is charged for their share and it is credited to the buyer to pay the total bill. If the seller has already paid the taxes for that year, the buyer is charged for their share and it is credited to the seller at closing.

Of course, property taxes aren’t the only fees that are prorated …

Monthly expenses, like HOA dues, are based on that HOA’s billing cycle. For example, let’s use a closing on Feb. 20 for a property that has monthly HOA dues of $280. This would represent dues of $10 a day. The buyer would be charged $80 for the 10 days they will own the property (February 21-28) and the dues are paid to the HOA on their behalf for those 10 days. That amount is added to what they will pay at closing.

In this scenario, if the seller had paid their February HOA dues, they would receive a credit of $80 at closing for February 21st through February 28th. This would be a credit for the expense they paid for a time they no longer own the property. If the seller had not paid their dues, they would be charged $200 for their share of the February dues (plus any late fees) and the title company would pay the HOA the February dues on their behalf.

Some prorations can be based on actual amounts – like rents and HOA dues. However, tax prorations are often based on estimates because the actual tax statement for that year has not been determined. The amount being prorated will typically be based on the previous year tax statement. The title company will usually require both buyers and sellers to acknowledge that if the actual tax bill comes out differently, they will settle it between themselves.

Prorations are addressed in Paragraph 13 of the TREC residential contract. It states:

“Taxes for the current year, interest, maintenance fees, assessments, dues and rents will be prorated through the Closing Date. The tax proration may be calculated taking into consideration any change in exemptions that will affect the current year’s taxes. If taxes for the current year vary from the amount prorated at closing, the parties shall adjust the prorations when tax statements for the current year are available. If taxes are not paid at or prior to closing, Buyer shall pay taxes for the current year.”

If, as a buyer or seller, you have any questions about your fair share of monthly, quarterly, or yearly expenses, just ask your title agent for the details.

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Let It Close - steps to get your property closed

Closing on a house can be frightful. But a new home is so delightful. And since we’re all set to go. Let it close, let it close, let it close.

While getting to the closing table isn’t always lively and fun, we still love to get there. There are a few potentially slippery steps from the time you put a warm signature on your sales contract to the handing over of the house keys.

Unless something pops up to put a freeze on the process, these are the basic steps most buyers and sellers will follow for closing on a residential property:

Contract – Buyers and Sellers complete and sign the contract. The agents execute it and deliver it to the title company.

Option Fee – If there is an option period, buyer delivers specified option fee to the seller within 3 days.

Earnest Money – The amount specified in the contract is deposited with the title company listed on the contract within 3 days.

Inspections – Buyer does their due diligence and conducts all inspections of the property before the option period ends.

Information Exchange – Title company, buyer, seller, and mortgage company exchange information needed for the sale. Lack of contact and information can stall the process.

Title Search – Title company researches property records, tax status, maps, restrictions and more. Any liens, judgements or other issues are investigated and addressed.

Mortgage Company – Buyer secures their lender, provides all needed documents and obtains loan approval.

HOA Resale Certificate – If there is a homeowners association, the resale certificate and rules and restriction documents are ordered, paid for and delivered to all parties.

Appraisal – A professional appraisal of the property is performed if required or desired.

Survey – An existing survey and survey affidavit are supplied by the seller or a new survey is ordered. Once received, the title company reviews the survey and determines if it is acceptable for use.

Title Documents – The title commitment, tax certificate, property restrictions, etc. are delivered to the buyer and their lender for review.

Contingencies Removed – Contingencies to the contract in addition to issues on the title are addressed and removed prior to closing.

Clear to Close – Approval to close the sale is given by both lender and title company.

Schedule Closing – An appointment is set up for all parties to sign closing documents.

Final Walk-Through – buyer takes a final look at the property to confirm condition and acceptance.

Signing – Buyers and sellers sign documents to consummate the closing.

Funding – after all required documents are signed, reviewed and approved, buyer delivered funds and lender sends funds to the title company who then disburses monies to designated parties.

Keys and Possession – after funds are processed, buyer gets keys to property.

Deed Recorded, Records Filed – Title company files the deed(s) in county court records and records the transaction.

Title Insurance Policy Issued – Title company issues title insurance policies to buyer/lender.

There is nothing magical about the closing process and there’s nothing really cold or gloomy. But if it goes as planned, all the way home you’ll be warm.

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6 Steps to Choosing a Title Company

It’s easy to make the general statement that all title companies are the same. They all offer the same services, and in Texas, they all charge the same for title insurance. However, it’s like saying that all Realtors are the same, or all home inspectors or insurance companies are the same. 

A closer look will reveal that there is usually a difference in the level and quality of service between companies. Working with a reliable, experienced, and caring professional can make the difference between an easy, positive transaction and a nightmare experience. 

Which title company you get into bed with can be like a marriage. Regardless of how it goes, you’re stuck with them for the duration of the time you own your home. 

The title company is referred to as a title agency or agent. The escrow officer is the person who handles your transaction and works for the title agency. Here are my recommended steps for choosing a good title agency and escrow officer: 

1. Get a recommendation from a trusted source. Integrity, efficiency and reliability are the important factors you should look for. Many real estate agents develop preferences and avoidances for particular title companies based on their experiences. Bear in mind that escrow officers within a company can vary just like real estate agents in a brokerage operate differently. It helps to know who the particular escrow officer is that will handle your deal. Will you be working with that officer or be passed along to someone else?
2. Verify they are in good standing with the Texas Dept. of Insurance (TDI). TDI regulates all title agents in Texas and conducts regular audits of these agencies. The most recent list of DFW area title companies with no fines or penalties for breaking the rules is in this article from July 2018. Keep in mind that lots of agencies have similar names. Look for the exact agency or you can review the complete report is see how they stack up here. 
3. Confirm they are a member of TLTA, the Texas Land and Title Association. More than 90 percent of title insurance agencies licensed to do business in Texas are members of TLTA. It’s equivalent to a real estate agent being a member of the Texas Association of Realtors or the local MLS. TLTA provides continuing education, industry news and updates to members. Search the TLTA membership byeither individual escrow officer or ‘agents’ — which are title agencies. 
4. Check their calendar for the week you plan to close. You want an efficient but thorough closing that is also convenient for your schedule.
5. What are their affiliations? They should be a neutral party with no loyalty to either side in the transaction. Most title companies are not affiliated with a bank or real estate brokerage. However, if they are, it is something that you should be told.
6. Ask a few more questions. Do they have attorneys on staff that you can speak with if necessary at no charge? If so, that’s plus. Do they own their own title plant? That’s another big plus. How many underwriters do they use to shop coverage? Two or three is ideal. 

There are hundreds of title agencies and thousands of escrow officers in Texas. Because our industry is so highly regulated, finding a really good one is pretty easy. 

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]

Fighting over Earnest Money

Business conflicts always seem to revolve around money. It’s no surprise that some of the worst disputes we see at title companies are over earnest money: Who wants it. Who is entitled to it. Who thinks they’re entitled to it. Etcetera. It can get uglier than avocado appliances and shag carpet.

When a transaction fails to close, any earnest money that was deposited with the title company must be disbursed to someone. The provisions for this are in the standard contract put out by TREC – the Texas Real Estate Commission. What happens to the earnest money is spelled out clearly. Of course, that doesn’t stop people from fighting over it anyway.

The TREC contract addresses earnest money in several places. The most obvious (and easiest) is the option period. This paragraph 23 allows the buyer to terminate the contract within the specified option period and be refunded their earnest money. That’s seems straight forward enough.

Beyond the option period, determining who gets the earnest money can get more complicated and will typically require both parties to sign a release of earnest money form.

Some of the scenarios where the buyer could terminate the contract and get their earnest money back include:

• The commitment is not delivered for reasons beyond the seller’s control (paragraph 6B of the contract)

• Objections to items on the survey within a specified time (paragraph 6D)

• Not receiving/objecting to items in the seller’s disclosure (paragraph 7B2)

• Repairs exceeding 5% of the sales price (paragraph 7E)

• Damage that can’t be repaired prior to closing (paragraph 14)

• If the seller defaults on the contract (paragraph 15)

Typically, the seller gets the earnest money if the buyer defaults on the contract. With all that ink on the pages dedicated to earnest money, there shouldn’t be much room for doubt. But disputes still arise.

In many cases, the title company cannot disburse the earnest money to either party unless they both agree. And when they don’t agree, there are very specific consequences. Check out the details of paragraph 18 of the contract.

It notes that the title company (escrow agent) is a neutral third party. And that they may deduct expenses they incurred from the earnest money. Those are typically items like a new survey, tax certificate, or HOA documents that were ordered.

Either party can demand the release of the earnest money and the other party must either release it, demand it themselves, or lose it. If they both demand the earnest money, they may end up duking it out in court.

But note that this paragraph also points out that if a party wrongfully fails or refuses to sign a release of earnest money within seven days of its request, they can be liable for not only the earnest money, but damages, attorney fees, and costs of a lawsuit. Pow! Right in the kisser.

If you’re going to fight over earnest money, consult your agent, the title company, and an attorney. And be prepared to take a few knocks.

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]