Preparing to Sell Your Home
Selling your home is a big undertaking. Today we get the inside scoop on how to make sure the process is a smooth one with Kellye Clarke. Kellye is Counsel and Branch Manager with RGS Title in Old Town Alexandria with twenty years serving clients in Virginia, Maryland and The District. Kellye has seen pretty much everything imaginable in her tenure, and offers homeowners tips on how to proactively ensure a smooth transaction from contract to close when selling their home.
Welcome to episode two of Keepin' It Real. I'm your host, Adam Tabaka. Today, we're looking at how homeowners should best prepare for their home sale from the perspective of a legal professional, Kellye Clarke. Kellye is counsel and branch manager of RGS Title in Old Town, Alexandria. She's an expert in real estate settlements and title, with 20 years of experience serving clients in Virginia, Maryland, and the District.
Since returning to RGS six years ago, she's earned membership in the President's Club as a top 10 company-wide producer in each of those six years. She was recently named a fellow with the American College of Mortgage Attorneys, and is the very first diversity officer with the American Bar Association Real Property Trust and Estate Section. A mother of two recent graduates, a lacrosse mom, a baseball mom, a runner, and a yoga enthusiast. Impressive in so many ways, and always a pleasure to speak with, I present the one and only Kellye Clarke. Kellye, thanks for joining us today.
It is my pleasure, Adam. And wow, that was a nice intro. Thank you for that.
Thanks for being here. I appreciate it.
So you've been in settlement in the title business now for 20 years. But give us a little bit of background about you, yourself, and how you ended up where you are today.
Sure. It's somewhat interesting to me. I am from the Hampton Roads area, about three miles south, down 95, and ended up here going to George Mason University for my undergraduate education. I majored in public administration, and found a work study job at the Virginia Department of Transportation while I was in school that ended up being a title examiner for VDOT. And when VDOT goes and condemns, unfortunately, slithers of property along the road for taking to widen the road, well, that's what some of my friends and I had the pleasure of doing during college.
And so, the best part of the job was actually driving the big orange trucks during that time period, and traveling around to all of the local five courthouses here. And we learned the ropes. We researched the land records. They were literally physical books that we pulled back then. And we got to see everything, from the archives, to the very old language that was in the deeds way back when, to the present. And that was my introduction to real estate. And so, once I graduated from undergrad and ended up at George Mason Law School, I had that real estate experience on my resume and ended up falling into positions where the attorneys were practicing real estate law, and developed a love for the area. And here I am today, still doing it.
Wow. That's impressive. Now. Now did you... I would imagine you might have gotten some pushback when you were doing some of that work, in terms of people not wanting the roads widened near their property.
Absolutely. Absolutely. It was an interesting position to be in. So, VDOT definitely has the different representatives that actually go out and meet with the homeowners and go through that process. There's absolutely a process. They cannot take your property away from you without paying you fair market value for it. However, that can be pretty subjective, as far as the value.
Everybody has their perspective on that. So definitely, it got a little sticky with situations. But we weren't always involved in that part of it. We were sort of the background aspect of it, and providing the reports and the title records to those folks in the office, so that they knew what they were working with. But yeah, it was interesting. We did get a chance to go out on a couple of calls back then.
It's funny though. I came full circle with that. I actually... I didn't share this when I was sharing a little bit about my background. I ended up working for VDOT as an attorney, doing some of those takings as well. And I ended working with some local homeowners, and did end up having that initial introduction, and working with them, and negotiating, and coming up with the fair market value. And so, definitely, it's an interesting process, but it is a fair one, as much as they can have in place. Yes.
Now, for everyone who maybe hasn't bought a home or sold a home, or for anyone for whom it's been a while, before we delve into today's topic, tell us just a little bit about your role and the role of the title company in general, as it pertains to the sale of a home.
Yes. So the title company is sort of the middle person. We handle the administrative aspects of that real estate transaction. And I am counsel to the title company, and so I'm reviewing all of that information. I'm reviewing the sales contract, making sure that both parties have provided the information per the terms of the agreement. And I'm also here to make sure that I'm facilitating the information from the lender involved in the transaction, to make sure that their instructions, as far as what they need to have met to close the transaction, are appropriately followed.
The title agent, we are truly an agent for a title insurance underwriter, which is a larger nationwide company that underwrites the title insurance that we provide. And all lenders, institutional lenders, corporate lenders, just trying to make sure people understand when I say that, any of the lending institutions require that the buyer purchase title insurance to protect the lender's interest in that transaction.
And so, we're making sure that the title is good, and marketable, and insurable, and we are also making sure that that's the case for the buyer as well. Because in the contract, the seller agrees that they will convey good marketable and insurable title. And so, that's what we're looking for as well, to make sure that everything is in order.
So it's an interesting tight rope to walk, because I don't represent the buyer or the seller, although I do interpret the terms of the contract to let people know what one side has agreed to do, and what the other has agreed to do, and what the contract actually says. But I am not here to advocate the one side over the other, but to close the transaction and pull all of the various pieces together.
Makes sense. Makes sense. So, we're talking a little bit today, specifically, about what a home seller could do to prepare before they get ready to sell their home. In your experience, when issues arise between, say, contract and closing, what are some of the more common challenges that could have, or should have, been addressed maybe proactively, prior to going active on the market to sell their home?
Right. So I do think that most people, they hire a great realtor, such as yourself, to walk them through preparing the home for the transaction. However, they should also think about preparing the legal paperwork and the background information for the legal conveyance of that property as well. And just taking a little bit of time to pull out that deed, to think about the mortgages that they have on the property, and any other outstanding items that may exist. People forget about things.
So for example, people will know that they have their main mortgage that they're paying on monthly. However, let's say 10 years ago, they decided to do an addition, or redo a bathroom, or something, and they took out a line of credit for that, but they've since paid off that line of credit. And let's say the line of credit was $400,000. They spent $40,000 of it for the remodel of an area in their home. And over time, thankfully and gratefully, they've been able to pay off that $40,000.
However, that lender more than likely still has a lien against their property for the full amount of $100,000 that they could have taken out. And so, when they then go to sell the property, we find what's called two deeds of trust, two liens, or two mortgages against the property, and people sometimes are surprised about that, and they don't have the documentation, they don't have the paperwork for that loan, showing when they paid it off. And then, that sends us down quite the trail of trying to figure out the pieces and put it all together. So that's one thing, is pulling out the documentation.
Also, pulling out the deed to make sure that the owners are available. Now, I know that sounds weird. You would think people know who owns their house. But for state planning purposes and for a variety of reasons, sometimes people will put their property in the name of a trust. Or if one spouse has passed away, confirming that it automatically conveyed, or that the surviving spouse is the sole owner of the property, or if it has conveyed to children, if it's being conveyed via a will. Just making sure all of those various pieces of paper, legal documents, are available for us to review.
And one way that people can definitely be prepared, Adam, is to come to a title company or come to someone like you, and through your relationships with someone like me, have us do a preliminary title search so that we can confirm the legal status of the title, so that they're not under contract, and then, with a 30 to 45 day time to close, and then figure out that they have some issue that they have to resolve and they don't have necessarily a good amount of time to take care of it. Or it just adds another level of stress that's unnecessary to the transaction.
Oh, that makes sense. Now, let's say, in a situation like you were discussing earlier, maybe there's still lien against the property, even though the line of credit has been paid off. Now, if you have a situation where maybe a lender has since been bought out by another banking institution, lending institution, or has folded all together, how is that kind of situation addressed?
Yeah. Those are always interesting for us as well. So, that's what we call another way of the unreleased trust, and then we're trying to find that lender. So let's say, even the line of credit we were just talking about, let's say we'll pick an older bank, Riggs Bank. And Riggs Bank is no longer around, so then we have to figure out, well, who took over handling the transactions for Riggs? And I should have picked a bank where I know the chain of who bought out who. But I don't know who bought out Riggs Bank.
But nevertheless, we have databases, we have title department. We also have our title insurance underwriters that assist us with getting to the right department to figure these situations out. But it takes time sometimes, to submit the information and to get a response back. Also, the homeowner has to have some documentation to help that company find their loan, so something showing that old loan number, a settlement statement where they perhaps had previously refinanced a loan and paid something off. We need something to go on to show that they truly did pay off that amount of money to help us figure it out. So having that documentation handy is always helpful.
And then, say the case of a mechanics lien or something like that for work that was done on a property, is the process pretty similar? Say that there's still a lien against the property, where the work has been completed and paid for in full.
Yes. And so, those are somewhat a little easier to handle if it's something like a mechanics lien, because there are time periods in place, where an action has to be filed within a certain time period for it to remain valid. And so, if that time period has expired, it may be something that we don't have to worry about. But if it hasn't, then hopefully, we can also track who the contractor was, or who counsel for that contractor was, to make sure that we have a payoff letter and appropriately get the release that we need for those types of situations.
Now, from your perspective with a good bit of experience here, in an ideal world, what does the process look like for a homeowner who is, say, thinking about selling their home? And how far out would you recommend that they start taking action in terms of taking a look at how clean their title might be?
Yeah. On the low end, one month. On the high end, at least three months. You just never know what you're going to get when you do the title search, and if it's going to be a major issue or a small issue. So giving yourself enough time for us to work through an issue if we find one is great. It really varies. Three months would be a pretty big issue that is going to be time consuming and take some time to work through.
Most of these situations, within a 30 day time period, they can work themselves out, but sometimes, they take longer. And I hate to even put myself in a box with one to three. Title issues run the gamut, as you can can imagine. Sometimes it could be even much longer than that. I have plenty of stories, unfortunately, and interesting scenarios, where you wouldn't think these things happen, but they do. Yes.
Well, that actually leads me to my next question that I was going to say. Without divulging any names, or PII, or anything like that, is there any one particular story that was particularly interesting, entertaining about a settlement or something like this, that you're able to maybe share with us, that folks might get a chuckle out of?
Oh goodness. Oh my gosh. They really do run the gamut. So let me think of something that I have going on right now, because there's always something. Gosh. And some of these and be sort of sensitive issues. I mean, we have situations where there are judgements that pop up, and they can be from IRS liens to various judgment creditors, and having to negotiate with the creditors. Now, that wouldn't be something that I would take on for the individual, but they would hire a counsel, or the individual themselves can call the creditor and negotiate to have amounts reduced, to pay off a judgment, so that they can still move forward with selling a property. Trying to think about some other title issues.
We've had some, where, let's say someone has a power of attorney to sign and convey title on behalf of someone. People have to make sure that if the person is no longer deemed competent, that it's a durable power of attorney that's in place, which is a power of attorney that remains legitimate or valid when someone is no longer deemed competent. And so, we've run into situations like that occasionally, where... I have one right now, where in the chain of title, the mother is on title, mom and dad were on title, father passed away, mom inherited the property, of course, mom is in another country, and mom is no longer competent.
Daughter is trying to sell the... They already had a deed prepared at one point, conveying title to the daughter. However, in the chain of title, there was an error in the prior deed, and so my title insurance underwriter is requesting that we receive what's called a confirmation deed, wanting mom to sign, confirming that the appropriate property was conveyed. Well. Yeah. How do we take care of getting mom's valid signature, who is not in the country, who is no longer deemed competent, and they don't have the structures in place already with an appropriate guardian, or comate, or someone from the courts that's designated to sign behalf of mom? That's when the durable power of attorney would've been great.
So those are the kinds of situations that I run into sometimes. They can be doozies, you all. Adam, gosh, I'm trying to think of some others. There have been situations where there have been trust agreements, where perhaps both trustees are not available to sign, and we need to look to a successor trustee, and we need to track down where that successor trustee is located before they can sign. There are always the interesting estate situations where there are a number of heirs, and trying to figure out who has the authority to sign.
I did have another one recently, where mom and dad got a divorce, there was a tenants in common, so mom owned 50% interest in the property, dad owned 50%. Mom was alive and well, and the son had a power of attorney to sign on her behalf, which was fine. Dad had passed away, but his interest did not convey to mom since they had divorced and it had severed what's called the tenancy by the entirety, so there was no longer a right of survivorship. So his interest passed according to his will.
Well, in his will, it conveyed the interest to his two children. However, when he passed away, he passed away in another state, and so then, we had to go to that state to get the probate documents. It was just a whole trail. I'm boring you, Adam, and maybe other people that might be listening. But it can get quite interesting, you all. I mean, there's so many scenarios that can come up. And I remember that when we were running around trying to get the documentation to the probate clerk timely so that they could sell the property, and it just got quite interesting, but we got it done eventually. So yes.
This is quite intriguing. A lot of potential moving parts there, it sounds like.
Lots of them. Yes.
Yeah. You've got your hands full, for sure.
Well, Kellye, I really appreciate you coming on today and talking with us a little bit about this. If folks want to get in touch with you or find you online, what's the best way to touch base with you?
Yeah. They can definitely visit the RGS Title website, www.RGStitle.com. They can find me on LinkedIn. On the RGS website, we have a great home buyer's guide, which helps walk people through the process and knowing what to expect from a title perspective. And getting back to your original question, just making sure that they sometimes do that preliminary title search, so that they know the legal status of the title and have that documentation available for you, so that it'll make the process just that much easier when it comes time to sell the property.
Excellent. Well, thanks for a few minutes of your time, Kellye. It's been a pleasure, and I'll see you around soon. And love to have you back again sometime soon here.
All right. I'd be happy to do so. Thank you.
All right. Thanks so much. Take care now.
Okay. You're welcome. Bye.