What's in a Title (Search)?

Title searches are a part of the real estate industry that exist mainly behind the scenes.  When I started in real estate years ago, the seller almost always paid for the title search.  Although buyers resisted the change to their tab when it first started happening, that makes much more sense--the title search affects the buyers from the time of purchase, and into the future, so they want it to be done correctly.  When the buyers hire a closing attorney, that attorney does the title search in almost all cases now.  His or her commission on the sale of the title insurance policy usually brings down the cost of his or her services considerably, so that what the buyers pay the attorney is lower than the hourly rate would otherwise total. 

The policy protects against claims against the title--by encroaching neighboring properties, by earlier conveyances done improperly, or by the taking of land by adverse possession (this is an arcane bit of legal terminology, but I actually had a policy once that paid off in a case where the prior owner had let an abutting property owner continue to use a corner of the property, and that adjoining neighbor succeeded in changing the boundaries going forward).  Titles come in different categories, since certain types of owners, especially banks and estate executors often convey only what they got, as a hedge against a mistake made by a previous owner before they got involved.  Relocation companies also convey only what they received, for the same reason. 

All of this may be more nitty gritty than the average buyer needs to know, but it's helpful to know what you are paying for, and to be aware that sometimes, and I'm working on one such problem now, an impending closing will uncover earlier conveyances done improperly, which can affect a sale from the current seller.  Once in my career, I've had an entire chain of back-to-back closings fall through, due to the inability of the first seller in the queue to "convey clear title", the phrase you will see in most real estate contracts.  Although this is extremely rare, that's why mortgages generally require title insurance as a condition of the loan, meaning that you cannot usually choose to bear this risk yourself.  Even if you wanted to do so, you'd not want to resell later without having it.  Any specific questions can be addressed to the closing attorneys, who deal with these issues on a daily basis.  

News from Tulsa

I just got back yesterday from meeting with The Leadership Council, a group of large independent brokers from around the country.  This time we met at Chenowth & Cohen in Tulsa, where growth is high and unemployment is low.  Tulsa turns out to be almost in the exact center of the country geographically, both north to south and east to west, so it is home to a lot of company distribution and service centers, as well as energy companies and others.  It is just approaching the million mark in population. People are moving from all different parts of the US, and many that I met had come from Texas. Boy, does it seem different from New Haven in those regards!

Tulsa has about two and a half months of housing inventory.  Prices are rising, and units are growing.  Like us, they have problems with mortgages and closing times, and sales are not easy.  However, it's really about jobs.  If people have jobs, and employees are moving into the region to work, then it's obviously easier to sell your home and buy another one, because there is a steady supply of buyers being created.  In addtion, the West has ranches and open land all around, making it much simpler and cheaper for builders to add new product. 

The real estate business has some characteristics in common all over, but there are some differences.  They have centralized showing, so agents make one call to arrange all the properties for a buyer to see.  They also have lots of listings where contact is through the owner, which seems odd to us.  States with title companies owned by real estate companies are more real estate agent driven than lawyer driven.  Towns and cities are farther apart, and many agents I met worked an hour or more from home.  There seemed to be more concentration--one agent I met with had 159 listings!  Advertising has left newspapers in many places, and you don't see the big Sunday ad sections.  Everything is done on line, or directly by real estate companies. 

Other practices were similar to ours, including the work ethic of agents, the changes brought by technology, and the complications of lending and governmental regulations.  It's always refreshing to see both the old and the new, and to step out of the regular daily grind and view it from a distance.