Tag Archives: Listing Agent

Title Insurance And Flying: It’s Not All Burritos And Love

Title Insurance & Flying: It’s Not All Burritos And Love

Walking From Money Requires a Walk!

Walking From Money Requires a Walk!

Walking from a multi million dollar deal isn’t easy when you’re paid on commission. But I did it today.

I’ll tell you why, then you tell me if you would’ve done the same.

Flying

Years ago I gave a few flying lessons to a student who seemed heavy on the confidence side. Unusually confident. Most students walking into a flight school for the first time are demure. This guy was cocky and demanding. Loudly he announced that he pretty much knew how to fly an airplane; he just needed a good instructor. By “good” he meant an instructor good enough to recognize his extraordinary talents and after maybe one or two flights would sign him off for a final FAA checkride.

When we got in the airplane I realized Mr. Confident had a perspective rich with fantasy. Someone had given him a few lessons but he had a long way to go before becoming a pilot.

When Mr. Confident  asked if he could buzz the school where his sister worked as a teacher, I became suspicious. Before 9-11 I would’ve been concerned about his judgment but post 9-11, as this was, I had several concerns. Is he just an idiot or could he be dangerous?

No Shoes No Service

You’ve seen the sign, No Shoes No Service? There should be a sign at flight schools, no common sense, no flying lessons!

I wasn’t making much in those days and I hated the idea of losing a student/client. On the other hand, I didn’t want to wake up to find CNN on my front lawn!

I talked with Mr. Confident over a delicious burrito lunch. Sometimes it’s best to interview students on the ground in a common environment.  They’ll open up and give you insight.  About half way through my burrito I determined he was surely an  idiot but not intentionally dangerous. In fact in my estimation I deemed him too stupid to be dangerous.

About a year later I got a call from the FBI. But first…

Title Insurance And $xMM

There’s a lot of energy around any high value Real Estate transaction. Emotions and ego’s can ratchet up as the stakes get higher. A multi million dollar deal can sometimes get exciting.

In this case the listing agent was yelling at me.

Not always but often I’ve noticed when voices get loud facts get soft.

Mr. Loud was trying to bully his way through the transaction, a common old-school tactic. But in today’s world there are checks and balances in place to protect the consumer. There’s no room for old school tactics.

I held my ground

Stepping back and assessing the situation, here’s what troubled me:

The seller was well past 80 years old and a much younger relative stepped in to handle his affairs.

Red flag #1.

Anytime a party to a transaction is elderly there is concern about potential elder abuse. There are laws to protect the elderly because, believe it or not, there are bad people who prey on them!

Next: The buying agent stopped communicating.

Red flag #2.

Why would an agent stop communicating days before closing? Why wouldn’t the selling agent issue a notice to perform?

Next: The selling agent said it was an all cash deal. Escrow said there was a lender.

Red flag #3.

Why is there a breakdown on the most basic components of a transaction days before closing?

Next: The Title Unit asked for a copy of the appraisal. Common on high value deals because a property value has to be established in order for Title to issue a policy. Simply put, the insurer needs to know for certain how much risk they are incurring.

The buyer had an appraisal done but in this transaction no one except the lender is talking to the buyer, not even the buyers agent!

Of course the lender has a copy of the appraisal but the lender can’t provide it to anyone without the buyers permission. But remember the buyers agent is MIA!

So: The request for the appraisal somehow goes to the sellers younger relative who refuses to provide it because, well, without having a Real Estate License, unilaterally decides providing a copy of the appraisal just isn’t necessary.

Red flag #4.

Who’s controlling this transaction anyway? And why can’t we see the appraisal?

Three Strikes Your Out. Four Strikes I’m Out

I decided there was too much rick in this transaction and when I stood firm with my request for the appraisal the seller’s agent threatened to pull the deal and take it to another Title company. I surprised him by agreeing.  I suggested he do just that.

Most Title Reps would sell-out before walking from a deal this big. In my less experienced days I would’ve done anything to keep this deal alive. But as you mature, you begin to see that shortcuts don’t necessarily bring  you to success. Doing the right thing – counts.

In a previous post, Seduce Your Wicked Imagination / Reduce The Risk I wrote: Insurance company’s are in the business of managing risk, not taking on risk.

The selling agent continued to yell. He told me he’d have the deal closed in two days with another Title company. I told him to do it.

Flying And Mr. Confident

A year after asking Mr. Confident to find another flight school,  I got a call from the FBI.  Mr. Confident was being investigated for suspicious activity consistent with possible terrorist planning. I’m not at liberty to give up the details but I can tell you this much. My statement to the FBI suggested that if Mr. Confident were doing the things they were investigating him for in order to impress girls in a bar I’d say they were on right on track. But knowing how utterly incompetent he is I figured he’s not much of a threat to anyone other than himself. I never heard from the FBI again so I’ll pretend they came to the same conclusion.

What Would You Have Done?

Pick your area of interest:

Real Estate or Flying

Tell me below in the comments section what you would have done. Would you have closed the Real Estate transaction in-spite of the red flags? Would you have continued to give Mr. Confident flying lessons?

 

Epilogue

Mr. Loud came back a few days later and asked to keep the deal open. He would provide the appraisal. After three weeks he did provide the appraisal and we closed the deal successfully with all boxes properly checked. I can only presume the other Title company asked for the same documentation.

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Stats Be Damned. The Fear of Flying & Real Estate

Adored When Needed For Immediate Rescue

I’m standing within arms reach of a fully equipped, reasonably self-sufficient, mostly educated, all faculties operable, grown man with a full-time job and a car, who is telling me he’s afraid of flying. I’m a Certified Flight Instructor. I get this a lot.  And I understand.

“You’ve got a better chance of being struck by lightning than of crashing in a jet. In fact, you’ve got a better chance of being struck twice by lightning than of going down with one of the big commercial operators.”  The Unfriendly Skies by Willie Stern, The Weekly Standard.

The stats be damned. Math isn’t a subject most of us grasped in school. How can we be expected to embrace it later in life?  Few of us have any trouble driving our cars yet nearly 33,000 people were killed in 2010, one of the best years on our nations roads according to the NHTSA, (National Highway Transportation and Safety Administration). There were no, none, zero airline fatalities in 2010. None. See USA Today Travel. Does knowing this chase away the fear of flying? Hell no.

Real Estate is scary too, until you’ve traversed it a few times and start to understand what makes it fly. I remember buying my first condo. I knew nothing. Didn’t understand a single thing. I was told to sign here, and here, and here… and the next thing I knew I was a homeowner. I blindly bought a home.

Most of the non-pilot population will do the same thing with flying. You’re told to get onboard, fasten your seatbelt, put your stuff under the seat or in the overhead bin and turn off your phone. The next thing you know you’re in Kansas!

In Real Estate transactions I try to explain what’s going on in the simplest terms. But sometimes what I have to say isn’t what the person wants to hear. That’s when ego’s step up and logic runs for cover. Besides flight Instructing, I’m in Title, so I get to work with all sides of a Real Estate transaction. Not just the buyers and sellers, but mostly the Realtors and Lenders.

Title guys like me are similar to lifeguards on the beach. We’re hated when we’re telling people they can’t swim because the water is too rough but adored when someone is drowning and needs immediate rescue.  An astute Realtor once told me, “I don’t even think about Title unless the $*** hits the fan. Then Title suddenly becomes the most important aspect of the Real Estate transaction.” Well said.

When teaching people to overcome their fear of flying I start by showing how and why airplanes fly. And, once we get in the air, I let students take the controls and actually fly the airplane themselves. We conclude with looking out the window and enjoying the perspective few people have the privilege of experiencing. If you’ve ever flown an airplane, even if for a few short minutes, you are one of the elite. Most people in the world will never have that story to share.

There hasn’t been a nicer time to buy Real Estate than right now. Home prices are low and money is cheap. If you need someone to walk  you through it, contact me. If I can’t walk you through to your goals, I have many experts in every area of Real Estate I can refer to you. See, “Does Your Realtor / Lender Know What You Drive“.  Once you’ve signed here, here and here, look out of the window in your new home and enjoy the view. You’re now part of the American Dream.

Flying airplanes, buying a home; scary at first. But once you understand the basics it’ll become second nature. It might even become enjoyable.

Please feel free to leave comments.  And Remember, Sharing is Caring.  Thank you.

Note: Besides being a CFII, MEI, Pilot, I’m a Title Rep.  In other words, I sell Title Insurance. Comments made here are my own and do not necessarily belong to my employer; Chicago Title & Escrow.

Chicago Title has been in business for more than 160 years. It’s a company you can trust.

For more information about Title Insurance or flying airplanes, contact me directly at ric.Lippincott@ctt.com.

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Does your Realtor or Lender Know What You Drive?

Popular assumption: There are only three reasons a man drives an expensive car. (1) Small tallywhacker, (2) Big Ego, or (3) Midlife crisis. But popular assumptions aren’t true all the time.

I buy the nicest certified preowned cars I can afford, not because I have an oversize ego or under sized something else. I buy nice cars because I don’t want car problems. Period. I want the car to start, go, never need maintenance, and never fail me. I don’t want to wait for tow trucks. I don’t want to haggle with mechanics while they experiment on my car. I don’t want these things because I value my time. Time I spend worrying about my car is time I’m not able to work or be with my family. Simple.

I Don't Want To Be Broken Down Guy

Lets Talk Title Insurance and Cars for a moment.

When you buy a house, or refinance the house you own, you’re going to need Title Insurance. The lender will require it. So here’s the question. Do you want good Title Insurance or cheap Title Insurance? The answer is, you probably haven’t thought about it.

In California it’s customary for Listing Agents to pick your Title Insurance. In the case of a refi it’s your lender who decides. You pay for it. They pick it.  Do they know what you’d pick – if you were to pick? (By the way, you can pick your Title Insurance but most people don’t.)

For my fancy preowned cars I buy insurance from a large reputable insurance company. I do this because I’ve had experience with cheaper companies. I’ve spent hours on hold, trying to get a call back, filling out forms, waiting for appraisals, and finding out things I thought were covered really weren’t. Since I value my time I’d rather pay a little more for my car insurance knowing that if something happens, it’s handled. No fuss. No mess. No hassle. No broken down guy.

How does my Real Estate Agent or Lender Choose My Title Insurance?

Ask them. I have. And here are some of the answers I’ve heard:

My office requires me to use our own in-house company (This is very common)
The Rep is really cute (I swear I’ve heard this)
The Rep is a friend of mine from High School
They are cheaper
(From a lender) When we do those no cost refi’s I have to use the cheap guys otherwise I have to pay the cost and I’m not doing that!

Another untruth:

All Title Companies are the same. No, they aren’t. While most Title Companies offer the same type of coverage, sorta like Car Insurance companies, Title Insurance companies aren’t the same and neither are car insurance companies.

Let’s go back to premium cars. I pay extra for a premium car because I value my time and I don’t want to be the broken down guy. Same for Car Insurance. I go with reputable companies because I hate getting the runaround, sitting on hold, finding out what I thought was covered really isn’t and never getting callbacks.
Title Insurance companies are just like every other business. Some companies are in business for years, others come and go. Chicago Title, for example, has been in business for almost 200 years! Many others like United Title, Investors, Micro General, Pacific Title, American Title and National Title were flashes in the pan.

Quick- why do so many Title Companies go under?

Well, it’s easy math. If they are trying to gather market share with pricing and don’t charge enough for their product, they won’t have enough in reserve to pay claims.

What happens if my Title Insurance company goes down?

In most cases a larger Title company will buy the underwriting like in the case of Lawyers Title. When Lawyers went BK,  FNF, (Fidelity National Financial) the parent company that owns Chicago Title, bought the underwriting from Lawyers Title for pennies on the dollar.

So what’s the problem?

Your time and stress level. If your Title company fails you will most likely still be insured. But good luck finding someone to help you with the claim! Your first call will go to, “I’m sorry, you’ve reached a number that is no longer in service.”

Another untruth.

Title companies never pay claims. Oh really? Last year Chicago Title paid $500MM in claims. That’s a half a billion dollars!

Just the other day a lender at a large bank told me he’s only had one claim in eight years, so he’s using the cheaper on-line Title Company for his customers. Does he really know that to be true? Some homeowners will I guess call their Lender if a Title dispute pops up. But I think more people would contact their insurance company instead. In the case of my friend the Lender his customers may be suffering with claims he’s unaware of.

The full circle.

People who buy premium cars don’t often skimp on their cars or their car insurance. Your house is your largest expenditure. Bigger than a car. If you can afford the house do you really want go cheap on the Insurance that insures you as the rightful owner? Is your Realtor or Lender really doing you a favor by making you the broken down guy?

At the end of the day you might save a few hundred dollars on a cheaper Title Insurance policy. But I’m willing to bet if you ever have a claim you’d trade that two hundred bucks in a heart beat for a reputable Title Insurance Company who will be there to defend you.

Please feel free to leave comments. Thank you.

Note: Besides being a CFII, MEI, Pilot, I’m a Title Rep.  In other words, I sell Title Insurance. Comments made here are my own and do not necessarily belong to my employer; Chicago Title & Escrow.

Chicago Title has been in business for more than 160 years. It’s a company you can trust.

For more information about Title Insurance or flying airplanes, contact me directly at ric.Lippincott@ctt.com.

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