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!

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REMOTE DIGITAL CLOSINGS — Coming to your living room soon?

The self isolation and quarantines of the coronavirus/Covid-19 pandemic creates challenges and disruptions, including in real estate.  The title and mortgage industries are putting forth efforts to overcome these challenges.

Remote Digital Closings May be Available Soon!

A major effort is underway from title underwriters, legislatures, and administrative agencies to allow “Remote Online Notaries,” (RON) in Wisconsin.  This would allow for fully remote, digital closings without the need to leave home. While it would primarily be available to Sellers, some Buyers can also sign remotely.

Buyers with a loan will need their lender approval to conduct a fully digital closing.  Lenders have many considerations and challenges, including investors, underwriters, mortgage insurance, and legal issues. Some may not be able to offer this service right away and others may allow only certain documents to be signed digitally.

Homestead Title is already conducting digital, remote closings for “Cash” Buyers (where none of their documents are notarized and there is no lender).

Look for important updates on Digital Closings in the coming days.

 

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What Daylight Savings Time Means For Realtors

Remember to “spring your clocks forward” by 1 hour on March 8, 2020!  This is great news for people who love evening daylight and the start of spring.  But, it brings an interesting twist for Wisconsin Realtors.

The new Wisconsin WB-11 Offer to Purchase defines deadlines as expiring at “11:59 p.m. Central Standard Time.”   Central Standard Time is our time zone in the winter months.  Starting March 8th and continuing all summer, Wisconsin will be using Central Daylight Time.  Arguably, this means that deadlines in the Summer months expire at 10:59 p.m.

What should Realtors do about the time change?  Enjoy the evening sun and try not to work past 10:59pm.  You will avoid this weird time zone glitch and you will get a better night sleep.

Thanks to Evan Swain of Keller Williams for his brilliant insights on this topic!

Happy Spring and don’t forget to spring your clocks forward at 2a.m. on March 8th. 

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Red Flags In Real Estate Sales

Too Much Money is a Red Flag!

Realtors, attorneys, and home sellers should be alert to red flags that indicate fraud, scams, or troubled deals. One major red flag is when a buyer offers too much money. Sellers should beware of any offer with a purchase price that is far higher than expected or earnest money that is far more than customary in the market.

Common Scams

Foreign Buyer Blindly Purchasing Home

One common scam involves foreign buyers emailing Realtors asking for help purchasing a home. After a few emails, the buyer (usually from China, England, or Canada) will make a full price offer on a home the he has never seen. He will then send earnest money in a certified check. If the red flags weren’t waiving already, they should be when the Earnest Money is way too high. For instance, in Madison, Wisconsin, earnest money typically ranges from $1,000 – $3,000. The foreign buyer will send $100,000 or more in earnest money. They will then ask for a return of the excess money. If you return the funds via wire, as requested, you will soon find yourself in a bind when the certified check bounces. It was fake.

Too much earnest money is a red flag!

For more information on this, common scam: Link here.

Local Buyer Seeking Occupancy

Another potential scam occurs when a buyer seeks to purchase property with an extended, pre-closing occupancy. In this case, we have seen buyers offer substantial earnest money (10-20 times the typical amount) and request occupancy for many months prior to closing. The buyer then moves in, fails to close and refuses to leave. The seller must file an eviction proceeding to remove the buyer.

Again, too much earnest money raises red flags. In additions, extended, pre-closing occupancy should raise a red flag worthy of retaining an attorney.  Interestingly, one of the ways to mitigate the risk of an extended occupancy period is to ask for an unusually high amount of earnest money.  Thus, red flags don’t always lead to fraud.  But they can indicate additional risks.

Unrealistic Purchase Price

Any time a buyer offers far more than the reasonable value of a home, it is a red flag for fraud. In some cases, this kind of fraud can benefit both buyer and seller. But, it may be fraud nonetheless and can expose the Realtor or other professionals to liability and harm.

For additional resources on avoiding Real Estate Scams, check out the following links:

Various Real Estate Scams: http://realtormag.realtor.org/law-and-ethics/law/article/2010/08/5-real-estate-scams-you-need-know-about

Foreign Buyer Scam: https://homesteadtitle.wordpress.com/2010/06/15/real-estate-scam-warning/

Corporate Records Scam: https://homesteadtitle.wordpress.com/2013/02/01/scam-alert-annual-minutes-requirements/

Deed Copy Scam: https://homesteadtitle.wordpress.com/2012/07/20/deed-copy-scam-alert/

Better Business Bureau False Complaint:
https://homesteadtitle.wordpress.com/2012/01/20/better-business-bureau-false-complaint/

 

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House Hunters Comes to Madison

Madison Couple and Local Agent Featured on ‘House Hunters’

The popular reality show “House Hunters” visits Madison with an episode airing tonight, May 13, 2013 on HGTV.

Tune in at 9:00pm to watch Keller Williams agent Josh Lavik help Darren and Megan Haworth find a home. The show’s producers were originally drawn to Lavik’s marketing materials. They were so impressed with the results of this show, they’ve also filmed another, featuring Josh and his wife, Jennifer, in their search for their own home.

Congratulations to Josh on a job well done and to his clients for finding the home of their dreams.

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Scam Alert: Annual Minutes Requirements

There is a new scam targeting Wisconsin small businesses. A company called Corporate Records Services is sending out very official looking forms that request information about the company, the submission of an Annual Minutes Form, and the submission of $125. The form appears to be required by state statute. Businesses are not required to fill out this form. In fact, it is difficult to see what, if any, services this company provides.

The Wisconsin Department of Financial Institutions has issued and official statement cautioning business owners against this scam:

http://www.wdfi.org/newsroom/press/2013/AnnualMinutesFormAlert.pdf

Other states, including Illinois, New York, Maine, Indiana, and Tennessee have also issued warnings against this scam.

Wisconsin business owners who have questions about this form are urged to contact the Department of Financial Institutions (DFI) at 608-266-1622.

 

Thank you to the WRA for alerting the Real Estate industry, many members of which have been targeted by this scam.

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Deed Copy Scam Alert

DEED PROCESSING NOTICE – Don’t Fall For it!

Home owners are being targeted for a simple, yet effective scam. At least two companies are offering to send copies of “grant deeds” for a charge of $86. They recommend that homeowners obtain this deed in order to confirm their ownership in the property. Yet, these public records are readily available for almost no cost.

Why Do Many Officials Call This A “Scam?”

These companies send official looking notices that often include warnings of late fees, compliance response deadlines, or the phrase FINAL NOTICE. While these sales pitches are not illegal, they are deceptive. As the Lake County Recorder of Deeds in the Chicago area noted: “It is not against the law, but it breaks the spirit of the law . . . It is very, very deceptive.” Officials Warn Homeowners of Deed Scams, Chicago Tribune.

The companies often charge $86 for the deed but also include a $35 late free for not meeting a fictional deadline. It is only in the fine print that they disclose that this is not a bill and that you could receive the same information from the County Recorder (or register of deeds).

Deeds Can be Obtained Inexpensively or Free

In fact, copies of deeds, mortgages, or any recorded document may be obtained from your local Wisconsin Register of Deeds office, for a very nominal fee. Generally the fees are $2.00 for the first page, and $1 for each page thereafter. Deeds are usually one or two pages.

In addition, homeowners should have received a copy of their deed from their title company when they purchased. Homestead Title and many other title companies will provide a duplicate to their customers at no charge.

Homestead Title Company is always happy to assist Dane County homeowners with such requests.

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2011 December Home Sales Report – Wisconsin REALTORS® Association

2011 December Home Sales Report – Wisconsin REALTORS® Association.

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Short Sale Questions And Answers

 Question: What are the Tax implications when a lender forgives debt in a foreclosure or short sale?

Answer: The short answer – Ask an accountant! The long answer is that the forgiven debt may or may not be taxable. Normally, debt that is forgiven or cancelled by a lender must be included as income on a tax return. But the Mortgage Forgiveness Debt Relief Act allows owners to exclude certain cancelled debt on their principal residence from income. It only applies to “qualified principal residences,” and the law expires at the end of 2012. So, if the bank forecloses or agrees to a short sale and forgives debt, and the owner lives in the home as his principle residence, the IRS suggests that the debt will likely not be taxable. For more information, go to the IRS website or IRS Publication 4681.
 

Question: Why are some banks taking so long to approve Short Sales?

Answer: Lenders are completely overwhelmed and understaffed. The foreclosure crisis struck quickly and grew at a staggering pace – too fast for lenders to keep up. There were nearly 2 MILLION foreclosure filings in the first half of 2009 alone. A large lender may have a few hundred loss mitigators. Dane County saw over 1,400 foreclosures in 2009. That is one relatively small county out of thousands nationwide. Lenders simply can’t keep up. At the same time, they can’t keep up with defaults and late payments. It is taking lenders longer than ever to deal with customers in default, start the foreclosure process, and push the foreclosures to completion.

Question: If a Realtor hires a third-party negotiator, can the Agent be held liable for that negotiator’s actions?

Answer: Probably. Third-party negotiators often charge their fee from the agent’s commission. Some go further and contract only with the agent for their services. In this case, the negotiator is essentially a sub-agent of the Realtor and the Realtor may very well be liable for the negotiator’s actions. This is a question for the Realtor’s broker or legal counsel.

Question: Are agents allowed to hold offers, if the bank hasn’t looked at them yet, and play offers against each other until the bank examines the offers?

 Answer: An agent can delay submission of an accepted offer, but doing so is not likely in the client’s best interest. By delaying submission, the Agent would be delaying initiation of the short sale process. In addition, a seller cannot accept multiple primary offers.  Only one offer can be accepted and any other offers would be in secondary position. Thus, there should be little reason to delay submission. There is some disagreement as to whether agents should submit secondary offers.  Many experienced agents suggest submitting only one offer and suggest that submitting multiple offers only slows the process.  Other agents suggest that the secondary offer, if better, improves your chances on two levels: one, it is a better offer, and it also shows sincere marketing efforts.   

Question: Short Sale are high risk, take incredible effort and long hours, often result in reduced commission, and often involve angry sellers. Why would any sane Realtor touch one of these?

 Answer:
Short Sales, Foreclosures and REOs comprise anywhere from 20-30% of the sales market in Dane County and will continue to be a large part of the market for quite some time to come. Distressed properties are hard, but they are also a fantastic opportunity.  Realtors who commit to this are having their best years ever.  Those agents are careful about which short sales they will take and avoid those that will just be impossible to close.  And they develop systems and shortcuts that make the overwhelming work manageable.  Agents can do more than survive, while truly helping sellers and buyers. The key is to stay educated, develop efficient systems, and work with a team of experts. The most important member of your team is a nimble, experienced title company, like Homestead Title.

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Short Sale Bank “Agreement” To The Offer To Purchase And The First Time Homebuyer Tax Credit

Two Common Questions:
1. Can a short-sale seller accept multiple offers until the lender approves the sale?
2. Can a first time homebuyer claim the Tax Credit if the short sale lender has not accepted the offer before April 30, 2010.

A common misconception with Short Sales is that the seller’s lender must agree to the Offer to Purchase. Buyers, Sellers, and Agents treat the banks “approval” as if it is a precondition to a valid offer. Thus, sellers often accept multiple offers, believing there is no accepted offer until the bank agrees to the offer. Buyers may believe that they won’t receive their First Time Home Buyer Tax Credit if the bank doesn’t approve the offer prior to the April 30 deadline. (Click here For more information about the First Time Homebuyer Tax Credit).

The Bank Is Not A Party
A short sale lender is not a party to the sale transaction. Nevertheless, you will need their approval to close. The approval, however, is simply their approval to accept less money than they are owed. They do not get to sign the offer nor are they parties to the offer. Lender approval may or may not be a contingency in the offer.  If it is not a contingency, it is hard to make an argument that there is not a “Binding Contrac.”  Even if it is a contingency, there is a strong argument that there is a “binding contract” – it is just subject to a contingency.  (NOTE: Consult an Attorney or Accountant for your own circumstances).

Thus, a seller who accepts two offers to purchase (without a provision that one offer is a “Secondary Offer”) has likely breached one or both of his contracts. And, on a positive note, a buyer who receives an accepted offer to purchase from a seller prior to April 30, 2010, may qualify for the Tax Credit even without the short-sale lender’s approval.  An eligible taxpayer must buy, or enter into a “binding contract” to buy, a principal residence on or before April 30, 2010.  The IRS has not explicitly defined the term “binding contract.”   Nevertheless, when a buyer and seller sign the offer, they have created a contract, with or without short sale approval — short sale approval is just one of many contingencies, including inspection, testing, title, and financing contingencies.   Whether this contract is ‘binding’ as defined by the IRS is unknown.  There is a good argument that the buyer would not be disqualified from the tax credit solely because the bank approval contingency is met after April 30th.  Nevertheless, any buyer encountering this issue should consult with an attorney, accountant, and/or tax advisor. We cannot say whether the IRS will interpret a contract to be binding before bank approval.

Feel free to contact Homestead Title if you have any Short Sale questions.

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