Be Prepared for Closing – Don’t Forget Lien Waivers

Sitting at the closing table, the closing officer turns to the seller with a smile and asks, “Have you done any construction, work, or improvements on the property in the last six months?”

The seller replies, “just the floors, some drywall, painting, electrical and plumbing work.  It was about $5,300 and I paid for most of it.”

Ohhh boy!  The title company cannot close without assuring that all contractors were paid and waived their rights to put a lien on the property. The closing is delayed!

Owner’s Affidavit and Construction Liens 

While the title company can search for most liens, some liens are hidden or “secret.”  Construction liens are one such “secret lien.”

If a contractor does work on a property, they can file a construction lien for the amount they are owed.  They have six months after the last time they performed work to file the lien.  But, the lien is effective as of the date the contractor started work.  So, if an electrician rewired the attic a week before closing, he can file a lien 6 months later but that lien will be effective as of a week before closing — before the buyer purchased the property.  In other words, the buyer will purchase a property with a lien against it!

In order to insure against this happening, the title company asks the seller to swear in an Owner’s Affidavit that no work, labor, or improvement was done in the last 6 months.  And, if any such work was done, the title company will ask for signed lien waivers from each contractor.

Realtors and Sellers Should Be Prepared

Sellers and their Realtor should be prepared with lien waivers for any work done prior to closing.  Addressing this issue for the first time at the closing table can lead to delay or even cancelling the closing.  Realtors should communicate to sellers that they will need all lien waivers and that a cancelled check or PIF invoice likely is not enough (although, some title companies will accept those if the amount is very small).  By avoiding surprises and preparing the seller for closing, the Realtor will assure a smooth closing, a happy client, and avoid delays.

As always, if you have questions about this or other title issues, call Homestead Title and we’ll guide you through.

How To Sell A Haunted House?

My house is haunted and I want to sell.  What can I do!

Selling a house that was the site of a murder, suicide, or haunting can be a daunting task.  These properties are known as “stigmatized” properties.  The big question many buyers and sellers want to know: is a seller legally required to disclose that a property is stigmatized?

The answer depends upon which state you live in.  Some states require that a Realtor and seller disclose that a property is stigmatized, including that it is haunted.  Wisconsin is not one of them – at least for Realtors.

In Wisconsin ,there is no legal requirement to disclose a “stigmatized” property condition unless that condition effects a physical component or condition of the property. Wisconsin law provide that a Realtor is not required to disclose “that a property was the site of a specific act or occurrence, if the act or occurrence had no effect on the physical condition of the property or any structure located on the property.” Wis. Stat. § 452.23 (2) (a).

Yet, Wisconsin law also requires a Seller and Realtor disclose any “material adverse facts” about a property.  If a property is widely known to be the sight of a gruesome death or the home of a notorious murderer, isn’t that an adverse fact? Wouldn’t that effect the future buyers’ ability to resell the home in the future?  A California court ruled against a Seller who failed to disclose that the home was the sight of a brutal murder, finding that the murders reduced he market value of the house.

Perhaps the Seller should disclose any stigma to potential buyers?  Perhaps there is a common law duty to disclose what the Buyer does not know?  The answer to these questions is hauntingly unclear.  What is clear is that a Realtor has no statutory duty to disclose unless the stigma also caused physical effects or damage.

💀 Boo! 💀

Masks, Closings, and Covid-19 Updates

Our mission and passion is to make the closing process easier, smoother, and less stressful — even in a pandemic. We are following CDC and Dane County guidelines as we continue to return to more normal closings.

Following the September 10, 2021 Health Department guidance, we currently require masks in our office. Face coverings are required among people ages two and older when in any enclosed space.

Closing Procedures:

Masks Required: Pursuant to Dane County rules, Homestead requires all clients, customers, and guests to wear face coverings or masks indoors.

If you prefer not to wear a mask, we can accommodate a curb-side closing from your car or outdoors (weather permitting).

Closing Room, Digital, or Drive-Up Closing:  You can sign your documents in our closing room or from your car as a “drive-up closing.” Realtors and lenders are welcomed at the closing! We may limit the closing room to 8 people. On nice days, we also offer West Side closings at outside tables.

We can also accommodate a fully digital, on-line, Remote Online Notary closing for sellers and certain buyers. On-Line closings are generally not yet available for loans (check with your lender).

Health and Safety: Our closing rooms are sanitized after every closing and have HEPPA air purifiers running at all times. We offer hand sanitizer and wipes, and take every precaution to keep you safe and comfortable.

Covid-19 Agreement:

Please do not come to closing if you have any symptoms or risks associated with Covid-19.  We can make alternative, remote signing arrangements.  Do not come to closing if:

1. You have had a cough, flu symptoms, or fever higher than 100 in the last 10 days.
2. You have been around anyone showing symptoms of Covid-19 in the last 14 days.
3. You have travelled internationally in the last 14 days.
4. You or anyone in your household has tested positive for Covid-19 and have had any symptoms in the last 14 days.

We look forward to seeing you at closing!

Real Estate Settlements – One Year Into The Pandemic

Lots of Options for a Safe Closing

Homestead is back in the closing room!

Our mission and passion is to make the closing process easier, smoother, and less stressful — even in a pandemic. We offer a number of options for a safe, smooth, and easy closing.

Closing Procedures:

Closing Room or Drive-Up Closing:  You can sign your documents in our closing room or from your car as a “drive-up closing.” We abide by the current Dane County order, which limits office capacity to 50%. This means up to 5 people, including the closing officer, in a room. On nice days, we also offer West Side closings at outside tables.

Call When You Arrive:  When you arrive, wait in your car or outside and call us at 608-467-4600 to let us know you are here.  We will let you know when your closing room is ready or, if you choose to close from your car, bring documents out to you.

Masks: We require all clients and customers to wear masks in our office. We can provide masks to those who don’t have their own. For those uncomfortable or unwilling to wear a mask, we offer drive-up closings.

Our closing rooms are set up for social distancing with plexiglass dividers. We have HEPPA air purifiers in each room, we sanitize all surfaces frequently, we offer hand sanitizer and wipes, and we do not provide food and beverages (we hope our signature bread and cookies will be back soon).

We are excited to slowly and safely return to something closer to normal!

Covid-19 Agreement:

Please do not come to closing if you have any symptoms or risks associated with Covid-19.  We can make alternative, remote signing arrangements.  Do not come to closing if:

1. You have had a cough, flu symptoms, or fever higher than 100 in the last 10 days.
2. You have been around anyone showing symptoms of Covid-19 in the last 14 days.
3. You are living with anyone who has been quarantined in the last 14 days.
4. You or anyone in your household has tested positive for Covid-19 and have had any symptoms in the last 14 days.

Closing Procedures As We Re-Open

Keeping Everyone Safe and Healthy

We are excited to help you with your real estate transaction!  Or mission and passion is to make the closing process easier, smoother, and less stressful — even in a pandemic. We have taken many precautions to keep you and our team safe and healthy.

Closing Procedures:

Closing Room or Drive-Up Closing:  You can sign your documents in our closing room or from your car as a “drive-up closing.”We will be limiting our closing rooms to 6 people to assure social distancing.

Call When You Arrive:  When you arrive, wait in your car or outside and call us at 608-467-4600 to let us know you are here.  We will either bring documents to you or let you know when your closing room is ready.

Masks: We require all clients and customers to wear masks in our office. We can provide masks to those who don’t have their own. For those uncomfortable or unwilling to wear a mask, we offer drive-in closings.

We will be sanitizing all surfaces frequently and offering hand sanitizer and wipes. We will not be offering food, beverages, or reading materials.

We are following state and local health guidelines to protect you and our team. We appreciate your understanding, even if you don’t agree with our level of precautions.

Covid-19 Agreement:

Please do not come to closing if you have any symptoms or risks associated with Covid-19.  We can make alternative, remote signing arrangements.  Do not come to closing if:

1. You have had a cough, flu symptoms, or fever higher than 100 in the last 14 days.
2. You have been around anyone showing symptoms of Covid-19 in the last 14 days.
3. You are living with anyone who has been quarantined in the last 14 days.
4. You or anyone in your household has tested positive for Covid-19 and have had any symptoms in the last 14 days.

We’re Back

Twenty-Five years ago, Michael Jordan announced his return to the NBA with two words: “I’m Back.” Homestead Title doesn’t pretend to be as exciting as MJ and our return to the closing room is not as dramatic. But, we are excited to announce: We’re Back. We will return to the closing room with a larger in-office staff during the last week of May.

Phased Re-entry

Our return to the closing room will be cautious, safe, and gradual. Here’s our timeline and plan.

Timeline:

Wednesday May 27, 2020: Customers have the option to close in their car by “Drive-in” or in the closing room. All closings will be at our West office this week as we gradually return to full staff.

Monday, June 1, 2020: Customers can choose to close in their cars or in either our West or Monona offices.

With health and safety concerns and child care challenges, we anticipate many requests for “Drive-In” closings and will continue to offer this as an option for the foreseeable future.

Closing Procedures:

All parties will be offered the option to close in the safety of their cars, in our closing room, or from home as a mail away or digital closing (when available).

Closings in our office will be a little different, with adjustments to keep you and our team safe and healthy:

• Limits on the Number of People: We will limit our waiting room and closing rooms to 6 people.
  • We’ve reorganized seating to accommodate social distancing.
  • We may need to have Buyers and Sellers sign separately (within the same 1 hour block)
  • Realtors and Lenders may not be able to be in the room (they are welcome to wait in one of our waiting areas or outside)
• Masks or Face Coverings are required in our closing room. We recognize that this may feel uncomfortable or even unfair to some people.
  • Just as restaurants don’t allow patrons without shoes, many businesses are moving to a policy of “no shoes, no shirt, no mask, no service.”
  • If someone is uncomfortable with a mask, we can still accommodate a Drive-in closing.
• Food and Beverages: We will not be offering food, coffee, or self-serve beverages. We may offer soda in unopened cans by request.
• Hand Sanitizer: There will be LOTS of hand sanitizer. We urge everyone to use hand sanitizer early and often during closings.
• Cleaning: We will be wiping down surfaces throughout the day and after every closing.

Buying and Selling (even refinancing) a home can be incredibly stressful. Our mission and passion is to reduce that stress while making the process easy, smooth, and fun. That includes making people feel healthy, safe, and comfortable.

Bring Your Spouse To the Refinance Closing!

Mortgage rates continue to hover near historic lows and virtually everyone is refinancing.  This is a friendly reminder to make sure everyone comes to closing.  This includes a spouse who does not own the property.

Wisconsin has an antiquated law that requires all spouses to sign any “conveyance” of  a married person’s “homestead.”  A mortgage is a conveyance because it conveys to the bank the right to take the property if the borrower ever defaults on their loan.

This law is not part of Wisconsin’s Marital Property Act.  Rather, it is in the statute that addresses the formal requirements to convey rights and title in real estate.  Some of those requirements are obvious:  identify the parties; identify the land, sign the document.   There is also a requirement that all spouses must sign if the property is the married person’s homestead.  This is true even if only one spouse owns the property.

This means that Jane Doe, the sole owner of her home, cannot mortgage her property without the signature of her husband.

There is an important exception for purchases where the entire mortgage is being used to fund the purchase (a “Purchase Money Mortgage”).  When buying and mortgaging, only the spouse who will be on the deed needs to sign.  When Jane Doe buys property without Jack, her spouse does not need to sign the purchase money mortgage.

We often here the complaint:  Why does my husband need to sign, he doesn’t own the property and didn’t sign the mortgage when I bought the property.  Wisconsin’s “homestead statute” is clear that non-titled spouses must sign any deed or mortgage on the homestead/residence except for the original mortgage when they purchased. If the non-titles spouse fails to sign, the Mortgage will not be valid.

If you are married and refinancing you personal residence, make sure your spouse comes to closing.

If you have questions about refinancing, the answer is very likely “do it!”  Rates are historically low.  You can also call us for referrals to a great lender.

A Funny Thing Happened at My Drive-Up Closing

A pandemic can significantly impact the way we do business. Homestead has moved all of our closings to the parking lot, doing “Drive-in” or “Car-Hop” closings.  Customers love it for the health, safety, and social distancing.  Yet, there has been a surprising, unintended consequence. Healthy closings lead to dead batteries!

We have had SIX customers need to jump their cars in the last 3 weeks! 

When coming to closing, don’t forget your photo-ID, a checkbook, the keys, and jumper cables!

In all seriousness, we now advise customers to turn their car off, including the radio or anything that might drain their battery.

Homestead Title is always available to provide title insurance, closing solutions, or a jump for your dead battery.

E-Closing And Drive-Up Closing Updates

Homestead Title has handled dozens of digital or e-closings in the last few weeks. We have been able to accommodate sick sellers, a borrower in lock-down in India, and parties who simply did not want to risk their health for a sale or refinance.

The way our industry handles these closings has been a moving target, sometimes changing by the day or even hour. Welcome to the new “normal.”  Here’s the latest.

Remote Online Notary

We have conducted e-closings using Remote Online Notary (RON). This is a fully digital closing experience, where every signature is digital (like docusign).  Even the notary signs digitally.  This requires a computer with Google Chrome or Firefox, a webcam and microphone, a decent internet connection, and use of an approved e-closing “platform” or service like Pavaso or Notarycam. Homestead is Pavaso certified to conduct closings and act as a remote online notary.

Pros:  Parties don’t need printers, scanners, mail, or UPS and can sign everything on their computer from anywhere.  There is no paper whatsoever!

Cons:  The technology can be very challenging. Failing to answer security questions or having technology challenges can cause delays. Not all title companies have this capability (Homestead does!!). RON cannot be used for Power of Attorney documents or for most lenders, meaning it is limited to sellers.

Homestead uses Pavaso and our own Notary (we don’t rely on third party notaries).

Video Conference Closings

We have handled closings via video conference, using Zoom, Facetime, or WhatsApp.  These are “wet” or “ink” closings — the parties sign documents on paper during a video conference with our attorney, who verifies their identities and signatures on camera.  They deliver the originals back to us and our attorney “Authenticates” their signatures. Wisconsin law allows an attorney to Authenticate the validity of a signature, with the same effect as a notary, based on familiarity with the signature.

Pros:  Virtually everyone can figure out the technology (it’s a simple video conference call), we can use this for signing a Power of Attorney, it is fast and easy.

Cons:  The parties need access to a printer and scanner. They still need to send the originals back to us (usually by UPS and we provide the label). The closing must be a pre-sign at least one day prior to closing.  This cannot be used for lender documents that require Notary Stamps and same-day signing.

In-Person Closings:

We are still handling the majority of our closings at our office.  We are doing these as “drive-in” or “car-hop” closings.  Parties do not need to leave their car.  We provide social distancing and limit contact.  We will continue drive-in closings during the Emergency Order, which was extended to May 26, 2020.

Home Sales, Sick Parties, and Solutions

We’ve fielded numerous calls from Realtors asking: What can I do if my client is sick and can’t come to closing?

The answer depends upon whether the party is the buyer or seller and whether the parties planned ahead.

Sick Sellers

Many title companies can accommodate the seller with an e-closing using a Remote Online Notary (RON). Homestead has conducted a large number of Seller e-closings (some sick and some practicing social distancing). Sellers need a computer with Google Chrome or Firefox, a webcam and microphone, and a decent internet connection.

In additions to an e-closing, some sellers may be able to pre-sign documents and have an attorney they know “authenticate” their signatures.  In rare cases, our attorney will authenticate their signature if he is either familiar with them from past transactions or has  had a video conference signing along with another party familiar with the seller.

If e-closing is not an option, the Seller may be able to use a Power of Attorney (See Below).

Sick Buyers

Sick Buyers can present a bigger challenge.  Lenders are not yet ready to allow fully digital closings and we generally need in-person, ink signatures. The big exception: Cash Buyers can sign remotely without needing a digital notary.  The vast majority of buyers have financing and will need another option.

• Power of Attorney:  This option works best when the POA is already in place.  It is not ideal when first addressed with a sick party because it may require that they visit a notary in person. POA’s present a few issues:
  • Visiting a Notary: Some real estate professionals have recommended that sick Buyers have the POA notarized at a Bank drive-through.  This seems unfair to the bank employees and socially irresponsible.
  • Authentication by an Attorney:  A safer option is to ask if the Buyer has an attorney who can “authenticate” their signature without the Buyer being physically present. We may be able to accept a scanned copy of the authenticated signatures along with a mailed original at a later date.
  • Remote On-line Notary: A third option is to see if the lender will accept a digital, RON notary for the Power of Attorney. This is a long shot but worth a try.
  • HEALTH WARNING:  We are very cautious about working with a power of attorney appointed by someone known to have Covid-19. Most people appoint someone they know well and we need assurances that the Signing Agent has not been in contact with the sick person in the last 14 days.
• Delay:  If the parties have not contemplated a delay, they will need an Amendment to allow for an extension of time to close.  Many parties have planned ahead and included extension terms in their offer.  The Wisconsin Realtors Association (WRA) released Addendum CV to address Covid-19 related issues. The Addendum allows for extensions of time if a delay is caused by:
  • Office closures such as banks, title companies, register of deeds, appraisers, etc. or
  • Sickness, isolation, or quarantine by any party.

Please let us know of any sick party as early as possible.  Homestead will work with you to find safe, healthy, and proactive solutions.

Planning Ahead

The best plan is one that is already in place. Parties should discuss the benefits and drawbacks of Addendum CV with their Realtors or attorneys.  In addition, parties may consider appointing a power of attorney (who does not live in their household) in case they are unable to attend closing.

Finally, planning for health challenges is something everyone (not just Buyers and Sellers) should consider, especially in times of uncertainty. It is wise to have a will, power of attorney, and power of attorney for health care. A power of attorney for a real estate transaction only allows someone to sign closing documents. A power of attorney for health care is far more important. It allows your agent (a loved one) to make critical health care decisions that are consistent with your wishes in the event that you are unconscious or incapacitated.

Homestead Title can draft a general Power of Attorney.  We cannot advise you on wills or drafting a Power of Attorney for Health Care. Attorney Peter Zarov, however, can consult with you about these needs to provide assistance or referrals.