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If Real Estate Is Local Why Are The Answers Universal?

Tuesday evening I was on the phone to a California real estate agent who was dumbfounded that we don't have "escrow" here in Kansas City. We didn't have it in Tulsa, either. Frankly, I'm not really sure what is meant when REALTORS say a house is "in escrow."

Here in the three states that I have practiced real estate a sale is "pending." An agent turns the contracts over to the title company. The title company gets "title work" and takes the earnest money check and prepares the HUD-1 settlement statement. They do more, as well. But it's the agent's responsibility to make sure inspections are done, that the co-op broker is keeping their sellers or buyers in line and moving in the right direction.

True, some agents will hire a closing coordinator. And that seems like a good idea. But I found that by the time I communicate all my needs to the cc I could have already taken care of it. There seems to be a big difference between our practice of real estate and states that have "escrow."

new york

When I read Noah's UrbanDigsblog I'm truly fascinated by the different approaches New York real estate agents take to the whole real estate thing. Borderline fraud and deceit spring immediately to mind as well as "dog eat dog." But maybe that is just my midwest understanding on what they do there with the bright lights and big city.

Heck, moving from Tulsa to Kansas City was an eye opener. Here are are a few "cultural" differences between the former Oil Capital and the BBQ Capital;

  • Buyers and Sellers met at the closing table together in Tulsa - almost forbidden in KC
  • All deals in Tulsa had to have original signatures on the contracts for both sides and their real estate agents and their brokers (that's 6 sets of original signatures if you are counting) - in KC a more sensible "copies are fine" policy is in place
  • In Tulsa you left every closing with your check - imagine my surprise at my first Kansas closing when I didn't get paid till nearly 4 days later because the funding has to come, then the title company has to issue the check, then they mail the check and then my office finally receives the check
  • Agents met on every deal in Tulsa. I met every agent I ever worked with. In KC I can go month after month after month without meeting a co-op agent. Most I have never met and wouldn't know from anyone on the street
  • In Tulsa nearly every transaction gets a mortgage survey - I don't think I've ever seen one in KC

My point is that we all have our accepted standards and practices for our "market area." Whatever that may be.

So I'm always a little taken aback on active|rain when I see people get into small squabbles about what is acceptable and what is not.

Or my favorite, an agent from Texas will answer a consumer's question from New Hampshire. May I ask a question? How would you know the first thing about how to answer most questions? I realize you get points for the answer. Does the consumer? Or how about a mortgage officer answering a real estate question? Or, of course, visa versa.

All real estate is local. We are quick to point that out when it is to our advantage to do so. And you know, it's true. Hopefully we can all keep that in mind and respect the opinions of others who are willing to come out and share their experiences.

Posted Thursday Jun 21
(06/21/07 08:46PM) — Jeff Schraeder

Every state is different.  Here in Texas you do not have to escrow.  I have heard in other states a purchase takes several days to fund.

(06/21/07 08:53PM) — Ken Nimmo

Well I can see your concern here.  AS Realtors (R) we all have a Standards Of Practice that we must abide by.  In your community you turn everything over to a Title Company.  We do the same in Arizona and they do in California too. Escrow is the process of the title company doing the title search, hud-1 and basically making sure the property is free and clear of liens and taxes and checking to make sure there isn't others on title.  So the escrow as we call it is the pending process. It is just another word.

 

 I agree that agents in Texas shouldn't cross the line with the agents from New Hampshire and vica versa. Agents talking with their clients about mortgages should be careful as that is not their areas of expertise. Mortgage officers shoudn't comment on how a Real Estate transaction should be done unless they are licensed. It would be like stating that there are dry-wood termites in a house. Let the licensed termite inspector do that.

Standards of Practice is the easiest way to get in court...

(06/21/07 08:55PM) — Ken Nimmo

If you don't escrow how do you know the property is free and clear of leins, other sellers or tax leins?

Sounds kinda scary..

 

Ken

(06/21/07 09:04PM) — Coeur d'Alene Real Estate - Come Live the Life Style - Christina Ethridge

"in escrow" for us simply means pending.  Title work, etal is being taken care of, hence the term "in escrow".

As far as the statement that it's faster to do your own things than to hire a transaction coordinator, well, I beg to differ.  If you have systems set up and in place, you'll be able to do more transactions each month/year while still providing top quality service to your clients :D 

(06/21/07 09:08PM) — Lori Lincoln- Taunton-Fall River MA Assonet MA, Rehoboth, Dighton, Swansea

Massachusetts is an attorney state. Attorney's office must do the closing with both buyers and sellers present, original signatures etc. All title work is done by attorney's.

(06/21/07 09:53PM) — Chris Lengquist, RIPS

Jeff - Texas doesn't even recognize other state's licensing.  See what I mean?

Ken - great points.  We have different termites here in KC than we have in Tulsa.  Only four hours apart but different deals, again.  We have title searches.  Nothing closing until it has "clean title."  But the house doesn't go "in escrow."

But heck in Oklahoma they still  have abstracts.  Literally every house should be researched all the way back to the days of the Native Americans.  What do you think about that?

Christina - When the property is "in escrow" does the agent not follow everything too?  And you are probably right (in fact I know you are) about the systems.  I average 24 closings a year and I know I need to put systems in place to allow someone else to do all that so I can average 50 closings a year.  Just haven't taken the step.  My broker reminds me all the time.  :)

Lori - I believe Chicago is, as well.  Well, that would be Illinois, wouldn't it.  :)

 

(08/12/07 11:25AM) — Anthony Clark

Chris  You'll be glad to know that copies, faxes, and emailed files now act as "counterparts" and originals aren't necessary (unless the other agent is "old school" and insists).  Unfortunately we still have abstracting, but a law went into effect this year allowing a supplemental abstract to be built rather than updating the base - if there's a title insurance policy.

(08/12/07 12:18PM) — Chris Lengquist, RIPS

Anthony, Wecome to the 21st Century!!!   :) 

I remember that OKC real estate was practiced (and probably still is) very differently than Tulsa.  But I'm glad to hear you don't need 6 copies of everything anymore.

(08/12/07 12:33PM) — Anthony Clark

Chris  Last year the OREC adopted a "Uniform Contract" that both the OKC and Tulsa markets now use.  It is a combination of all of the "best" parts of the two old contracts.  The ironic thing is that in Tulsa we had one contract for most types of transactions.  The "uniform" contract is only for SFR, so now we have multiple contracts - one for SFR, condos, new constructions, etc.  Oh well. 

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