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CEO’s Corner Fall 2023

I know several people who don’t like fall. Summer is over, daylight savings time ends, and winter is coming when it gets dark at 5 o’clock. Personally, I’m a huge fan of fall. I like the change of seasons. Fall is also a time to start business planning for the next year, reflect on the past year, and figure out what worked and what didn’t.  

Here’s a couple of issues that are very confusing to many in the title and real estate business, but super important and have come up many times this year. One is knowing how buyers should take title. When I bring this up when talking to realtors at office meetings or CE classes, I usually get at least one or two people who appear to be thinking more about when their Hello Fresh Box is going to be delivered than what I’m talking about, but it’s something that needs to be addressed on every deal. What if a married couple is buying? Everyone assumes they take title as a married couple, thereby creating a Tenancy by the Entireties, right? Meaning if one predeceases the other, the survivor owns the property, but what if that same couple had been previously married with children from those prior marriages? They may want to take title as Tenants in Common so that if one predeceases the other, their ½ interest would go to their children. 

On the other hand, there might be 2 individuals buying who are not married. The only way to know how they want to hold title is to ask them. Keep in mind, the buyers may not be thinking about this issue at all, at least not until one of them dies and the survivor thinks they can sell the property, but finds out the deceased owner’s 4 siblings/heirs must sign deeds. When this happens (and yes, it has happened), the surviving owner/seller is very unhappy and wonders why this wasn’t dealt with properly when they first bought it. 

To help with this situation, we created a “Tenancy Selection Form” that we ask buyers to sign at least by closing. This form instructs and confirms for the closer how the buyers want to take title in an effort to alleviate the confusion or misconceptions some buyers may have regarding their ownership.

The second issue that has come up frequently this year involves the 5 word phrase at line 85 of the Residential Sales Contract: “Deed as directed by Buyer.” What the heck does that mean?  It’s been in the board contracts for as long as I can remember. What it means is that the buyer can direct not only how the buyer takes title (like I was discussing above), but also the buyer can direct who will take title. Who” takes title? You mean that a buyer can enter into a contract and tell the title company to add someone to the deed to take title with them even if that someone is not a buyer on the contract? Yes, in fact, a buyer could tell the title company to not put their name on the deed, but to put someone else on the deed. In other words, a person can buy a property for someone else (of course, if the buyer is getting a loan, the lender will have to weigh in and may not approve. However, an increasing number of deals today are closed where the buyer is paying cash). 

By the way, no contract, amendment, or assignment is needed for the buyer to give the title company this instruction. A real estate company or broker may have that policy, which is their choice, but the contract does not require it.

Anyway, I hope this was helpful. May your fall season be everything you want it to be and may all your Hello Fresh boxes be timely delivered. Talk to you soon!