What Is Title Insurance? & Why Its Necessary.

Transcription

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Pete: Kelly, how are you?

Kelly: Good, how are you?

Pete: Good, good. Thank you so much for coming in.

Kelly: Thanks for having me.

Pete: Yeah, so this is our fourth podcast episode.

Kelly: That's exciting.

Pete: Yes, super exciting. The podcast is geared mostly toward first-time home buyers.

Kelly: I love it, I love the education.

Pete: Yeah, definitely, and that's our goal to educate and make it very simple to understand, and for someone that's going through the process, there's so much to learn, so much to know, and it's not like they have to know everything because we're there to help them. So you are an Escrow officer, and you work for Fidelity?

Kelly: Yes, fidelity.

Pete: Fidelity National titles. So we have multiple title companies here in Redding, so Fidelity and Fidelity are also owned by. Fidelity owns Chicago.

Kelly: Yes, Fidelity Financial is an umbrella of title insurers, but we also have sister companies like Chicago title, Ticor title, and Lawyers Title. So there are different brands within the umbrella of fidelity, and then there's the Fidelity title in and of itself.

Pete: Okay, so it took me a long time when I got in the business to understand title insurance and what it was there. Really?

Kelly: Same. Yes, it took me some time, even when I first started as an Escrow assistant. It's so vast of the information, and every file will be different, so it takes a very long time.

Pete: Yeah, and I remember when I first got into the mortgage business, the manager I was working for, he took me in the back, and I said, Okay, the first thing you need to know about the mortgage process is the title, and he put up a whiteboard, and he started writing down, and he said First, Second, Third, and he said, mortgage, second mortgage, third mortgage, and he explained what this all meant, and so I was still confused a little bit after that, but it took me a while to understand it. We can talk about this in your own words, but what exactly does the title company do for a first-time home buyer?

Kelly: So we issue title, we do a lot, we not only hold just the title, but we also do the Escrow, which we can go into, but for title specifically, we are looking through the public records and looking at the previous ownerships, looking through all the different channels to see what is currently against the property as far as incumbencies or restrictions, easements, there's so much that goes into it to see what's against that property specifically, and then we find. And then we start to clear certain items, so like you were saying, a first, a second, and a third mortgage, we would work on getting what was required to have those released off of the property, so the buyer had clear title going into ownership.

Pete: Got that. It is such a clear title. I like to think of it as, let's say, a car loan. And it works similarly, right or not? It's not the same.

Kelly: No, no. A title report is similar to a home inspection, where you're getting an inspection of the title of your property. Then you're kind of looking at things that are on it to see if that's going to match the kind of property you want, if you're going to get chickens, you want to ensure that the title is going to allow for it through the CC&Rs, the covenant's restrictions, that sort of thing because that's going to be a big game changer on if you want that property. So, the title report is like a home inspection but with a title.

Pete: You're inspecting. Sorry to cut you off. So you're inspecting any lens or any other. You called them incumbencies that would be attached to this property.

Kelly: Yep, liens, mortgages, anything that somebody has any kind of interest in the property, we're inspecting all of that, and then along the process of the transaction along with anything an agent and lenders doing, we're sitting behind the scenes and clearing all of those items as well.

Pete: So let's say I'm a borrower. I own a house, right? And let's say that house I own doesn't have any loans on it, meaning I've not gotten any. I pay cash for the house, so this property could have other liens, other incumbencies, or other things that are attached that I might not know about. And let's say I went to my neighbor, I'm like, Hey, I want to buy your house. And he's like, Great, and I want to sell it to you for $400,000. I say, okay, great, I got $400,000, or I get a loan, I don't, but I just give him $400,000, and he then transfers that home ownership to me. What's wrong with that picture?

Kelly: Unfortunately, people do it all the time, but you are essentially buying a piece of property that has somebody else's financial restrictions, I guess is a good word to say it, because they might be owed to money, they might be owing somebody money, and that person has put a lien against the property, and now you have taken on a piece of property with a lien where you're going to pick up that financial interest.

Kelly: So it's very tricky not to do something. You also have to consider that you want to look at easements. We've run into this quite a bit, where people are just, here's my $400,000, thank you for the deed, and they go and record it. You don't know also if they are perpetrating themselves as somebody that is a homeowner when they're not a homeowner. There may be a family situation where somebody had it in a trust, and another beneficiary has rights to that property. You just handed over money, and then this other person could say, Well, I'm entitled to money. Give me my money. You could also have a lot of issues with easements. Are you sure you have access to that property? That sort of thing.

Pete: Yeah, so this is why the title is so important.

Kelly: It is because it's much more vast than people realize. It's not just mortgages.

Pete: It's not just how much they owe on this property. It has to do. Because what is an easement exactly?

Kelly: An easement is access to your property or on your property so that I can have an easement to my property, say there's a vacant lot in front of my property and I have to go down a driveway to get to my property in the back, you have to have an easement to cross that person. Yeah, because you're on somebody else's land, the first law would have to provide an easement to allow me to get to my property.

Pete: So what you're saying is, let's say I owned a house and there was a house in front of mine, that there was a road that I needed to get to my house, I had to go through this other person's property.

Kelly: Yep they would have to provide an easement.

Pete: They give me an easement, and that easement gets recorded, is what you're saying. And you guys manage that.

Kelly: Yeah, it needs to be recorded to show the true right to cross their property.

Pete: The ownership, yeah, to be able to move, and that stays with the property, it doesn't go with the actual person that stays for that specific property?

Kelly: There are easements that can be voided based on ownership changes, but typically it stay with the property because it's a recorded item for both of those properties. It's the same thing if you have a telephone pole and it's a pigeon telephone pole. You will have an easement where pigeons can access your property to get to their telephone pole to deal with anything that might need to be done for that pole.

Pete: I just had a borrower who is a first-time home buyer, and they were buying this home and the title. When we got the title report, it showed the easements, like what you're talking about in the report. The report showed that they couldn't locate these easements, so the lender's concern is, Hey, these utilities could be underneath the house. And what happens then? And we didn't know. So I had to go down to the city and say, "Hey, can you locate where these easements were." Well, what happened was these easements were recorded back before the house was actually built, and so the easement was way away from the house, and it didn't show where the location of these easements was.

Kelly: And you have to think about why that's so important to have title insurance because the ownership goes back years and years and hundreds of years to times where they created lots that you can hand over whatever item you needed to say this is your property and whatnot.

Kelly: So you're looking at generations of family members and non-family members, and ownership, and so you have to think about how that all affects you and you're a lot, because at some point, somebody could have moved the boundary lines, you can do what you call a property line adjustment, and you can change your boundary lines and share or give or receive, so there's a lot that goes into it, and you want to protect yourself from understanding what your property looks like, why is somebody on my property, why are they driving on my property? There's so much to think about, the same thing as with the chickens; many people want to have chickens nowadays.

Pete: Can you have chickens in the city?

Kelly: I believe you can, but you would need to make sure that there are no CC&Rs, which are record, which are conditions, covenants, and restrictions that are recorded against a piece of property that would not allow for that.

Pete: So CC&Rs, let's talk about that real quick because that's part of the title. What'd you say?

Kelly: A CC&Rs stands for Conditions, covenants, and restrictions and so on. Yep, it will give what you can and can't do on a property.

Pete: And it could be like a neighborhood.

Kelly: It could be a neighborhood, and the misconception is, is that it's only in an HOA, a homeowner's association. But that's a total myth. You can have CC&Rs without being in an HOA.

Pete: Oh, interesting, I didn't know that. Yeah, so you can have CC&Rs that are not a part of an HOA. What is an HOA?

Kelly: An HOA is a homeowners association, so it's a community per se. Now, it could be big or small, where you're paying dues into something, and then you're getting certain perks out of it.

Pete: Oh, I see. So I had an HOA where I paid 45 bucks a month, and they managed and took care of the landscape on the road inside my neighborhood.

Kelly: Right. Yep, so that could be an HOA, or maybe you have a shared pool with your community, and you pay dues for them to keep that.

Pete: Maybe it's a gated community, and you pay, and you need someone to manage that. And so that's an HOA cost or fee. HOA is very common with condos for HOA.

Kelly: Yep, but you can have an HOA without a condo too. We have plenty of those here in the Redding area.

Pete: Yeah. My house wasn't a condo, but I still had an HOA.

Kelly: Right, exactly, yeah. I live in a homeowners association, so I did my due diligence of understanding not just what my property looked like but what I was getting into of the ownership within that, because sometimes there are guidelines as far as what your landscaping can be or what your paint color can be, so it's just. And again, that's going to be disclosed on a title report that you're in an HOA so that you can do your extra due diligence, and then we are still helping to get you that documentation to review it.

Pete: Yeah, that's important because whoever is buying this property, they need to know, okay, how much is the HOA and what are the requirements at the HOA that I had, I had to make sure I couldn't park my boat in my driveway, and I got frustrated because they sent me letters they put letters on my door. What happens if I don't comply with HOA?

Kelly: They're going to fine you. And depending on what they've set up as the association, which are agreeing to by becoming a homeowner.

Pete: And you sign these documents at close.

Kelly: You do. Yeah, so everyone's going to be different. Still, they're going to start with the warnings, then the fines, and then they'll start levying it against your title. They're going to file something against the public record that says this amount of money is owed to me, and then it goes from there where an HOA can actually.

Pete: Eventually take your property.

Kelly: They can. Yeah, they can foreclose on it because you owe them money you never paid for, and they have. You're obligated to pay them so that they can make sure everything's maintained properly.

Pete: Gotcha. Well, so interesting. Okay.

Kelly: It's fast. That's the crazy thing about title insurance and why it's important: there are so many different elements. It's not just one specific thing, and title insurance is very different than homeowner's insurance, medical insurance, or anything of that nature because what you're doing is you're only paying a one-time fee. It covers the past for future ownership if that makes sense. So pretty much anything that anybody has a legitimate or a false claim to your property from something that's in the past, but you're now the owner, you can then file a claim for something that's happened in the past, and that is a one-time fee that follows you through the life of ownership, whether you own it for five years, 20 years, 30 years, 50 years.

Pete: If I am my first-time home buyer and I go and buy property, let's say its property is $300,000, and I get a loan for $300,000. You're ensuring that that loan is the only loan on the property. So if I got 10 years down the road, someone suddenly knocks on my door and says, Hey, I have this lien that I put on the property from the previous owner. This lien was for $10,000 because I did their roof, and they never paid me. Then maybe he put a lien on the property, but I got insurance to cover that $10,000.

Kelly: Correct, yep, so title insurance is really a good financial move to get because we're going to not only it's an and situation, we're going to help with the legal obligations of making sure that gets cleared up and also the financial obligations.

Pete: Yeah, and that brings me to another point. We're talking about two insurances because you're also ensuring the lender. After all, if I'm giving the loan, the lender is very interested in ensuring they protect that lien, so they want to be in first position.

Kelly: Right, it's called the Golden Rule in the title and escrow. We call it the golden rule because it's first in, first out. So if you have a first and a second and you pay off your first, that second then moves in, and then that would come off, so you have a first in, first out is what we call it.

Pete: And why is that important? Why is it important to be in the first position instead of the second position?

Kelly: Because if somebody defaults on their loan and say you have a mortgage against your property and a HELOC, and you can't pay your mortgage, and you're still paying your HELOC, well, the moment that your mortgage forecloses on you, it wipes out all of the other debts, so that lender, that's the second the HELOC lender, they most likely aren't going to get the money that is going to be made when the foreclosure goes through.

Pete: They're going to get the leftovers.

Kelly: Yeah, exactly.

Pete: So let's say there's a first mortgage for $200,000, and then there's a second mortgage for $50,000, and then let's say there's a third mortgage for 20,000, it's 270,000 total 250 and 20. So let's say they sell the home, let's say the first four closes because they're not making the first or pay in the second and third, the first four closes, and then they end up getting their money, their $200,000, but when they go to sell it, they sell it for 220. The second mortgage would get 20,000, and a third would be.

Kelly: They get the pennies that are left over essentially.

Pete: Whatever. Everyone must be made whole before the next person gets the money.

Kelly: Exactly, exactly. Yeah. So a lender needs to know that, but they also want to know the other things, like who else can come in and foreclose? Your tax collector can do that if you're not paying your taxes, the HOA.

Pete: The tax collector actually is the real first.

Kelly: Yes, but the HOA, same thing, if you're not paying your HOA dues, so the lender wants to know all of what's going on, not just their first lien position, but all, which is why they get a full title insurance policy, just like an owner gets a full title insurance policy to all those vast things that are having a title.

Pete: Makes total sense. The process for a first-time home buyer is that they don't necessarily have to go and get this; this will be done. The lender helps out with this. Yeah, we'll help out the buyer and facilitate and work with the title company for the buyers to make sure we actually review the title. We call it a prelim or the actual title report.

Kelly: So, do you know why they call it a prelim? So it's a preliminary report to your final policy, and so you're seeing what's needed to either clean up or accept before you get your policy after we close the Escrow so you get. Your policy goes into effect after we've closed the Escrow for your ownership, so it's preliminary to that, which is cool if you think about it. So that's what the preliminaries are.

Pete: I didn't know that either.

Kelly: It's funny because people don't realize that we are behind the scenes doing so much with lenders and agents and sellers and buyers to ensure that at the end of the day, everybody's cleaned up with their title, the seller did everything that they needed to make sure those obligations were completed, and then we are cleaning up the title for the buyer, making sure that all the things for the buyer are taken care of. Making sure all the things for the lender are taken care of.

Pete: Here's a question, so what about IRS liens? Do those go in position for a second? Can they just go in and beat the first? Let's say I have back taxes. It's still first in, first out. Okay, so the IRS says I'm self-employed and haven't paid my taxes. They can put a lien on the property.

Kelly: Totally, but if you're self-employed and you put a lien on your property and then you go to sell your property, we have to make sure that IRS gets paid before you get your proceeds from your sale.

Pete: Is your job providing title insurance? Otherwise, the next person who buys the home would have been on the hook for that if you didn't.

Kelly: Right, and say that was missed for whatever reason, there's a vast majority, there's such a vastness of why it could be missed, but say it's missed, that's where title insurance comes in, and we're going to and help with the legal obligations of these claims, and the financial obligations of these claims.

Pete: Wow, so can you give us an example of where this came into place where you had to step in and protect a buyer that got insurance?

Kelly: Yeah, we've had a couple of situations. I think the one that sticks out the most is that I had a transaction in which we closed Escrow, and it was after the buyers closed the Escrow. They had somebody on their property and were like, why are you on my property? Get off it.

Pete: So they moved in and someone's comes on their property just.

Kelly: And they were on the back of the property or somewhere where.

Pete: Working doing something.

Kelly: They were doing something. They were pulling their boat to the side of theirs. I am not exactly 100%. But they were like, Why are you on my property? And they said, because I have the right to, here's my easement, which was missed through the transaction. And so we made it whole for them by making sure that claim got taken care of because it wasn't disclosed, and of course, somebody has access to your property that you did not agree to.

Pete: Wow, so how do you make something like that whole?

Kelly: I'm not exactly sure how that all played out because it's a lot of.

Pete: I guess there are multiple ways you could figure it out: you could compensate the easement holder, you could compensate the new buyer, or maybe a combination of both.

Kelly: Yeah, and there's going to be some kind of maybe legal ramifications that could be done, so we're going to help with all of that to make sure that it's all taken care of appropriately, but it's important to understand that we are covering you for those types of things that's to me, the one that sticks out the most is that an easement was provided and not disclosed and somebody had access to their property that they were not aware of a time of ownership.

Pete: Wow, so the other side of what you guys do. That was a lot, by the way. Thank you for covering all of this. It's a lot of information. I know that you guys also do what's called Escrow. This Escrow is completely different than actually providing the insurance for the property, and so the amount of knowledge that you guys have for first-time home buyers like I would recommend, if you're buying your first home, definitely utilize and talk to whoever the Escrow agent is, and pick their brain do you get people to call you?

Kelly: A yes, no question is I always crack up because people say like, Oh my God, this might be a stupid question, there is no stupid question when it comes to real estate. After all, every transaction is so different. Everything is going to be catered to what's going to be right for you because this is the biggest investment you're going to make as a first-time home buyer, this is your biggest transaction, the most amount of money you're ever going to spend, do not hesitate to ask the questions, you don't feel like you can't ask those question.

Pete: Totally. I'd say the same.

Kelly: Because you need to know beforehand what you're getting into so that we can assist you in making the best decision you can, we're 100% there. I love those questions. I am a total Escrow nerd, so I love those questions. I love it when people take the time to understand it because it's such a big thing. I love being a part of people's transactions. I'm not sitting there with the keys, but I get to be a part of their transaction and make sure they love what they're getting into.

Pete: Yeah, I love that. I love that. Yeah, I always say that. No question is a dumb question. If they don't ask anything and just assume, then that would be not smart, but ask the question, and we will help them. So, on the topic of Escrow, what exactly does Escrow mean for a buyer?

Kelly: So it's going to be more than a buyer; it's going to be for the whole transaction, so Escrow is considered a neutral or disinterested third party, so it's going to be somebody who is going to hold the funds for the buyer to make sure those funds are coming into Escrow, we're collecting everything that's needed to clean up their title, documentation that all the different parties need disclosures, anything the lender needs, and then we are going to be the ones who go and record that based off of your cleaned title to then disperse to your seller so that you do not have to do all of that, you don't want to hand the seller a check and expect that that check is going to give you the property, you want to make sure that I'm taking care of it because I'm not interested in either party, I'm not taking sides or anything like that, I'm there. Just to hold your money. Make sure everybody's taken care of.

Pete: I always tell buyers, anyone that's buying a piece of property, you never want to just give the money directly to the seller even if there's a deposit or anything, even if you're buying from a friend, family member, you want to give it to a third the reason for the third party is it's a neutral party to the two buyers and seller.

Kelly: It's a holding account as well.

Pete: Yeah, and they're going to go off of what's legally written on the contract, and so this way, you don't get into any arguments with the buyer or the seller of whose money it is and give me my money back I want to refund.

Kelly: Yep, even if it's family, we know that they might be your best friend, but at the end of the day, your money is most important, you want to make sure that you're protected to the best of your abilities and the seller would want. If they truly do care, they're going to want you to make sure that you're taking care of yourself because I'm also going to give them the money in the right way that they're supposed to get it.

Pete: So the first step of the Escrow process, from what I understand, is where the buyer will give a deposit, so they write the offer for the house, and they. Let's say they get an accepted offer. And in the contract, the realtor will put a specific dollar amount for a deposit. Can you explain what a deposit is? What earnest money deposit is?

Kelly: It's got different terminologies. So, earnest money can also be considered a good faith deposit, and it's good faith that you intend to buy a piece of property. You're showing some financial interest by saying, Look, seller, I'm not yanking your chain. I want this property, so here's my say: $500; everybody sets it in different amounts.

Pete: Each one is different; it's what's agreed by the seller and the buyer.

Kelly: But let's just say it's 500. Here's $500 to show you I have the financial interest to buy your property. I am not wasting your time. I am here to help you buy your property, especially because you could have 10 offers. You're showing that I want this, and here's my good faith for that, and so that's the best way to describe it: earnest money.

Pete: Okay cool. That makes sense. With the earnest money, I will share my best practices with earnest money because I get a lot of work with many first-time home buyers. They just have never gone through the process, so when it comes to the earnest money deposit, I always say, Hey, make sure you don't borrow the money from someone. Make sure it's not cash you just deposited that was maybe in a safe or under the mattress money you kept at home. They can't just bring you the cash.

Kelly: Right. I don't have a cash register. There's no way I can take cash.

Pete: Yeah, it's not like you guys don't have any.

Kelly: I'm going to say okay, I'm sorry, I'm going to have to take a check.

Pete: And if you take a check, then you have to hold it for 15 days or something. Yeah.

Kelly: It's about seven to 10 business days for a personal check to clear.

Pete: Yeah, which could hold up the Escrow process, could hold up the closing on time with.

Kelly: We can only do a cashier's check or a wire for closing funds, and that's an actual good funds law where it requires.

Pete: I didn't know that, so they can't write a check for the actual closing part.

Kelly: No, because if that check bounces and I have dispersed to the seller, then.

Pete: Even if you waited.

Kelly: Exactly, because you can. There's. Every banking system is different in ways they can fool those funds and defraud. A cashier's check or wire is the only way I could take closing funds, but as far as earnest money, because you're usually doing a 30 to 45-day Escrow, we can take a personal check upfront. We just can't take the cash. We don't have that kind of ability.

Pete: So I always say, talk with your lender, talk with the lender that you're working with when it comes to the deposit. Many first-time home buyers may or may not have the money readily available. They love the property, they're excited, and now they must come up with $500%1000. And they may not have that. So then I always say it's okay. We can figure this out. Talk with your lender and work it out with them before borrowing money. Take cash; the lender will help, and I've helped many buyers figure out how to get that money to title.

Kelly: I always tell people to check with their lender before they come to me to ensure that they've disclosed the proper accounts and check with your agent as well to make sure that there's nothing contractually that would make a pause for anybody because we want to go 50 miles per hour to get this transaction done, so always think about all the parties that are involved and what that money is going to entail for each of these parties, credit card's not going to work, be careful about money orders.

Kelly: We can't take the cash. You don't want grandma writing you a check, and you want to be cognizant of all the parties involved because, again, it's good faith for you to want to buy that property; you must truly be able to show that you legitimately want that property.

Pete: And that it's coming from you, not someone else, because if. I always explain it like this: if it's not their money, then they don't have any consideration or any skin in the game, the skin in the game. So, what else involves Escrow?

Kelly: So we're also the people that handle all the documentation as well to make sure that the buyers' documentation has been put into Escrow, that the lenders' documentation that they need to give out the money for your loan is taking care of, sellers documentation which is tax forms and deeds and all the legal documents that you're going to record for the new ownership, all of it needs to be compiled into this one Escrow, and it needs to be done by a neutral, disinterested third party, which is what we do to ensure that everybody is going to be able to get their ownership and get their money at the time of transfer.

Pete: At close, you guys do so many things.

Kelly: It's a lot of moving parts.

Pete: There are so many people who are involved in the sale of a property. You have the buyer, you have the seller, you have the realtors representing the seller, they're realtors. That's representing the buyer. You have the lender, appraiser, title, and home inspector.

Kelly: There really is a lot of parties.

Pete: And, all of these parties are coming to one spot, and that's you, and every single one of them will get paid from you, so then you disperse out the money.

Kelly: It's like me. I'm writing your checks for you, I'm writing the checks for five or six or seven different people to ensure that everybody's getting paid appropriately, and I'm balancing out the register as I'm giving out the money, so I'm like, Mom who sits down at the table and write the checkout and then puts it in her little register and balances it out, we're sitting there doing that along the side of documentation and title insurance. All of that is to make sure all those obligations are also cleared. You only see me twice; you hear about me from the beginning when I talk to you about your earnest money, and then I see you again when you sign your paperwork, and then that's it. But I'm working super hard. Everybody in the title is what I see super, super hard to cheerlead for all the people.

Pete: Yeah, when you break it down on everything you just shared, that's quite a bit of work. I know you guys do a lot of work, but when you break it down, I'm like, man, that's a lot.

Kelly: It's fast and furious.It's kind of like addicting, though. You get addicted to how I can do this much better or how I can make this so much simpler for this person. It's always fun to have the challenge of what I can do for this client to make it that much more special. So I have a lot of fun so that it could feel like a lot, but at the end of the day, it's your biggest investment. This will be where you lay your children in bed at night. This is where you're going to have so many memories. You're going to live with your spouse, and so at the end of the day, all that work is so necessary, but it's also so fulfilling to ensure you get it and get what you want.

Pete: So good, that's cool, that's cool. I know you know this, but there are different states where they call them attorneys, and then there are different states where they call them titles. Can you explain the difference we may have listeners in, let's say, an attorney state, not a necessary title state?

Kelly: So Massachusetts is an attorney state, so you are a full-blown attorney, you go through law school, you're going through all of the things a jury attorney would, but you're specifically going to do the real estate transaction, and you're still coming to a title insurer to do, to ensure the title, but they're doing essentially everything an Escrow officer is doing.

Pete: So they handle all the Escrow, and you have to be an attorney to do this. In these states, you got it.

Kelly: Yep, and the attorney is going to be the one who notarized everything, and then there's. It's an organ, so you just cross the border. We're three hours away, right? It is completely different. So, you have an abstract completely different from the title report in Oregon.

Pete: Oh really. I didn't know. I didn't know.

Kelly: And it's just one thing and even.

Pete: It's called an abstract, not a title report, and what's the difference?

Kelly: The title report is preliminary to a final policy where the abstract is, here it is, this is what it is. And then they sign what you call a warranty deed rather than a grant deed, where that deed has certain warranties within that document, whereas a grant deed says, I grant you this property, and then you paid X, Y, and Z for this amount. So everything, and then the funny thing is, up here in Northern California, title and Escrow are completely different than in Southern California. Hence, I do title and Escrow. I do it all. Whereas if you go to LA or anywhere in Southern California, you have a title officer at one company and you have an Escrow, they could be completely different companies. They're completely separate. And so you're working with a title officer and an escrow officer.

Pete: Now that you say that, it's been a long time, but during the big foreclosure market that we had back in 2008, we were working with out-of-town title companies, because the banks were saying, Hey, you have to use this type of company or this Escrow Company.

Kelly: Yeah, they have special companies that they hire.

Pete: And come to think of it, I think we did do a few deals, quite a few transactions where there was an Escrow company and a title company, which made it very, very confusing.

Kelly: Yes, yeah, it's just more people that are rooting for you, but at the end of the day, they can be very separate.

Pete: Yeah, interesting.

Kelly: Yep, it's very different in California, California to Oregon, everywhere else. So it's just a matter of again. No question is stupid because it's so different, right? So ask away, make sure you understand what's happening in your county, state, and region. You're a city, all of it.

Pete: Yeah, that's very, very important to make sure you ask the question.

Kelly: Yeah, totally. The more you know, I mean, knowledge is power, so you want to be empowered in your home ownership because you're going to own that for a long period of time, you're going to want to know and feel empowered to know that you made a great financial decision, not just a great paint color or pretty handles in the kitchen, you're going to be empowered to know you made a really strong financial decision.

Pete: I love that, I love that. I could ask you a ton more questions on this topic.

Kelly: I could keep going.

Pete: A couple more questions, and then the first one is, are there any other topics that you think are important for a first-time home buyer that you think would be important for them to know?

Kelly: Not specifically. When you get there, let's look it over, talk about your documentation, talk about your title report, and look at the maps together so that you understand easements. Still, it's all going to be very much about that piece of property. So I don't know that I could necessarily give anything for a generality other than you're going to want to make sure that you don't just think that I can get a credit card or that you can show up with a lump of cash under the bed, you want to make sure that you're having these conversations with people on what your plans are so that they can come along with you through that transaction and it won't be bumpy.

Pete: I love that.

Kelly: Yeah, so just ask the questions. That's the best advice I could ever give.

Pete: That's awesome, cool. And then I always ask anyone on the podcast to share with me the first time you purchased your home.

Kelly: Okay, so mine was a little bit interesting. So we were renting a piece of property, my husband and I, we were dating at the time, and we were renting a piece of property from a family friend, and we absolutely loved it, and we were going Hall about buying it. So we went and got a home inspection and found out we did not want that property, but at that same time, we're like, Oh, wait a minute.

Pete: Were you entitled at this time or no? You were.

Kelly: Yeah, I was an assistant been in it for about three, four years at this point, and so I was like, You know what? We're already shopping. Let's see what's out there. So we got into Escrow on one, and unfortunately, the same thing happened: the home inspection returned with a very bad septic. We did not want septic issues, so we canceled. The moment we canceled, the home that we are in now came into our price range on the market at the perfect timing, and we just. It was our dream house. Everything we've been looking for. So we jumped right on it. We went through a 30-day closing. It was perfect. We closed on our first home, and yep.

Pete: Yeah, I love the fact that you guys hung in there. One of the big challenges for first-time home buyers is finding a home they love and then hearing that it can't be their house for whatever reason. A home inspection, like your story or something, comes up, but you guys hung in there.

Kelly: It's kind of like trusting the system. You have to have a certain trust in yourself. Still, also the system, because at the end of the day, you have to find the property that's going to be perfect for you, but to me, it's worth hanging in there because it's scarier to go through rent increases or be tied to a landlord who's not taking care of the maintenance that you need for your home, or that's just sometimes they're icky. You know what I mean? There's so much to renting that's so hard that if you could just hang in there and get past the media scares or the scare of inspections, to really. You're going to pay off at the end of it. It just feels like a lot at the time, but there's no better feeling than getting through all that and holding the keys to your home. Yes, and going, Oh my God, I can pick paint colors, or I can pick carpet, or you get to do anything that you want to, so it's worth all of it at the end of the day.

Pete: I love that. Thank you so much for sharing that.

Kelly: Absolutely. Yeah, it's fun, fun, hard. There were tears along the way, but you just have to trust the process and the people with you who are championing you, your realtor, and your lender.

Pete: Yeah, there are so many team members that a buyer has on their team. They have the lender that's helping them, they have the realtor or the buyer's agent, you have the title that you're going to ask questions, you have home inspectors that.

Kelly: You have a lot of quiet cheerleaders, people who are sitting in the background cheerleading that you don't even realize, that you might say, a five-minute conversation.

Pete: That's awesome. Well, Kelly, thank you so, so much for coming. This has been awesome.

Kelly: Yeah, it's been fun.