Most Coto De Caza Realtors will tell you that red flag scenarios may cause delays or other problems within an escrow and must be addressed before the escrow closes. The Preliminary Report or “Commitment of Title Insurance ” will reveal a handful of red flags, so the escrow officer will go through it carefully and thoroughly.
Coto De Caza Real Estate Agents and parties to the transaction should also review the preliminary report for scenarios which could cause delays. “Many life changes cause a red flag,” as can other outside influences.
Here are a few red flags to be on the look out for:
• Business trusts
• Clearing liens and judgments, including child or spousal support liens
• Encroachment or off-record easements
• Family trusts
• Proper execution of documents
• Proper jurats, notary seals
• Recent construction
• Transfers or loans involving corporations or partnerships
• Last minute change in buyers
• Last minute change in a type of title insurance coverage
Red Flags When Buying A Coto De Caza Home For Sale
1. The buyer or seller has been has a history of bankruptcy: If the bankruptcy is still pending, obtain the contact information for the attorney. Escrow cannot close until the property is released from any pending bankruptcy proceedings.
2. The seller or buyer intends the property in question to be part of a tax-deferred exchange: To prevent delays in closing this transaction, obtain the contact information for the (1031) tax deferred exchange accommodator. Your escrow officer will work closely with the exchange company to make sure all state and federal tax guidelines are followed.
3. Your clients do not speak English: Our diverse population includes many buyers, borrowers, and sellers who do not speak English or for whom English is a second language. If .you do not speak the language spoken by your clients, seek a qualified and reliable interpreter. If you plan to use an interpreter, inform your escrow officer so that appropriate accommodations may be made for correspondence and the signing appointment.
4. The property is being sold because of a divorce: Is the divorce final and are the appropriate documents available? Has one spouse deeded the property to the other? If not, both the husband and wife will be required to sign all listing and escrow documents. Will two separate checks be required for proceeds? In addition, do you have current addresses and other contact information for both parties?
5. Sellers are recently married: Is the new spouse going to be a seller in this transaction, or will that spouse be required to sign a quitclaim deed conveying his or her community property interest in the property to the other spouse?
6. One of the owners is recently deceased: Many red flag situations arise from the death of a property owner. If this is a sale, appropriate documents must be prepared in order to close the escrow.
Is there a probate proceeding on the estate of the deceased? If so, a court order confirming the sale of the property will be needed prior to the close of escrow. Was a family trust established prior to the death of the seller? If that is the case, you need to know who the Successor Trustee is in order to obtain proper signatures. Our Coto De Caza Real Estate Agents suggest you involve your escrow officer early and save frustration for all.
7. One of the principals is using a Power of Attorney: Is the Power of Attorney legal and binding? The document should have been recorded in the county and state where the property is located and should be no more than two years old. Make sure to provide a copy of the document to your escrow officer as soon as possible.
8. Buyers want to hold title in the name of a Trust: Coto De Caza Real Estate Agents say the new lender may not allow this type of vesting, so be sure to raise this issue as soon as possible.
9. Seller lives in another state or is selling a property other than the principal residence: Some states (such as California) require tax withholding on the sale of specific properties. Our Coto De Caza Real Estate Agents suggest you check with your escrow officer instantly to talk about special tax reporting situations.