Close It!™ House of the Week: Modernized and move-in ready

This week we cross over the District border into Bethesda for this charming 4 bedroom, 3.5 bathroom cape colonial located on a corner lot less than a mile from the Red Line. 

The interiors are bright and clean. There's a finished basement. The spacious kitchen features stainless steel appliances with a gas stove as well as granite countertops. It's listed at $899,000.

Assuming a homebuyer puts down 20 percent on a conventional loan, her cash to close number will be approximately $204,574.23. The monthly payments would then be around $4,401.80 per month. For a complete picture of the cash to close, or for a run-down of the seller's side of the deal, plug the numbers into the Web version of Close It™ or download the free iOS app.

Headlines: A look at DC's tiny houses and million dollar 'hoods

Here's a quick look at what's happening in real estate in and around the District of Columbia.

Refinances drive meager mortgage volume again

Applications to refinance jumped 4 percent from the previous week but are still off 39 percent from the same week a year ago. — CNBC

6 DC neighborhoods where homes cost $1M and up

The most expensive neighborhood so far in 2014 is Massachusetts Avenue Heights, to the west of the Naval Observatory, where the median sales price this year is $1.847 million. Unsurprisingly, it is also the DC neighborhood where homes take the longest to sell (61 days on average). — DC Urban Turf

Millennials should be buying a home right now

Assuming that home values stayed constant and that a home buyer would put 20 percent down and take out a 30-year fixed-rate mortgage, Zillow found that a D.C. area buyer who waits one year to purchase a home would probably pay an additional $186 per month. — Washington Post

DC's 'Tiny Houses' highlighted in ReasonTV video

Take the politics as you will; the video is worth watching for its explanation of the tiny-house dilemma and its provocative arguments in the ongoing debate over how cities like the District should manage their growth. — Washington City Paper

What you need to know about Dupont Circle's secret tunnels

Even those who do know about the underground tunnels beneath Dupont Circle may not know about its storied and occasionally sordid history, nor about the plans to turn it into to a destination the likes of which D.C., and honestly the United States, has not seen. — Curbed DC

Why 83% of real estate agents become obsolete after handing over the keys

One major reason homeowners do not rehire their real estate agent is that they simply cannot remember their agent’s name. A dismal 17 percent of homeowners actually use their agent again. — Inman News

Close It!™ House of the Week: Colonial with an English garden

For the inaugural edition of Close It!™ House of the Week, we chose a property that's right in our own back yard.

This detached single family home is a brick colonial with a fenced-in English garden located on a tree-lined street in Friendship Heights, Washington, D.C. It has 3 bedrooms and 2.5 baths and is listed for $799,999.

Assuming a homebuyer puts down 20 percent on a conventional loan, her cash to close number will be approximately $183,510.61. The monthly payments would then be around $3,657.70 per month. For a complete picture of the cash to close, or for a run-down of the seller's side of the deal, plug the numbers into the Web version of Close It™ or download the free iOS app.

Federal Title targets consumers' best interest with 'Best Practices'

While real estate settlement service providers across the country groan about new government regulations stemming from Dodd-Frank, the largest independently owned title company in the region is capitalizing on the changes in its latest effort to turn the title industry on its head.

A "leader in compliance," Federal Title & Escrow Co. at the beginning of this year became one of the first title companies in the country to implement a series of business procedures with the best interest of their clients – homebuyers and sellers – in mind. The procedures are known as "Best Practices," and financial institutions and real estate agents working with Federal Title can rest easy, too, knowing each settlement is federally compliant and hassle-free. 

"The consumer is our client," said company founder Todd Ewing. "They are the ones paying the bill at settlement, not their agent or lender. Therefore it's our duty to look out for the consumer's best interest." 

Protecting the consumer's best interest

Among other things, Best Practices established procedures for protecting consumers’ identities and something called non-public personal information: social security, driver's license, and credit or debit card numbers for example. It also established procedures for safely storing, emailing and disposing of sensitive documents. 

To further protect consumers, Federal Title took out several insurance policies including a cyber protection policy that's good for up to $1,000,000 per claim with a provision for hacker attacks. Copies of these policies are available upon request. 

"Behind the scenes, we're going above and beyond the minimum requirements according to Dodd-Frank to deliver the highest level of protection to our clients, that they hopefully never have to realize," Ewing said. "Agents and lenders in the area are hearing about our efforts from other real estate professionals as well as their buyers and sellers – we take these compliance requirements seriously."

Turning the title industry on its head

Too often, in today’s environment, title agents depend on the referrals of agents and lenders – often leading to added cost for the consumer.

Real estate brokerages have forged Affiliated Business Arrangements (ABAs) to refer business to title companies for a price, Ewing said, and that expense gets kicked down to the homebuyer or seller. The federal government's Consumer Financial Protection Bureau has paid close attention to ABAs in recent years, resulting in a rise in Marketing Service Agreements (MSAs).

"It's like putting lipstick on a pig," Ewing said. "No matter what they call it, it’s a kickback with the same end result taking more money out of the pockets of consumers and putting it into the pockets of big brokers."

A large swath of Federal Title's business comes from referrals by real estate agents and lenders, but Ewing said he will continue to target homebuyers and sellers directly while appealing to like-minded real estate professionals who have the consumer's best interest at heart. 

"Demonstrating a level of professionalism to our clients – that we take seriously their privacy as well as compliance with the federal regulations – is the latest in a string of efforts to earn the consumer's trust and ultimately their business," Ewing said. 

Leveraging technology to earn clients' trust

The implementation of Best Practices is one way Federal Title has leveraged technology to change the way the title industry interacts with consumers. Last year the company developed a free iOS and Web app known as Close It! that accurately calculates cash to close for home buyers and cash in pocket for sellers. 

They were the first title company in the region to publish their rates online and offer an instant discount on transactions where the order was placed through the company's pioneering online order system. (Coincidentally the discount illustrates how much is kicked back to referral sources through ABAs and MSAs.)

"No other title company invests as heavily as we do in consumer-driven technology," Ewing said. "We have to try to reach the consumer directly before they get steered to their broker's preferred title company partner and pay more for inferior service."

Dodd-Frank Wall Street Reform and Consumer Protection Act and the title industry

Passed in 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act mandated new consumer financial laws and created an agency known as the Consumer Financial Protection Bureau to enforce them. 

Among other things, the CFPB is tasked with regulating financial products and services such as home mortgages. They have the authority to supervise financial institutions for compliance with these laws and, by extension, third-party service providers such as title companies.

Banks are under the CFPB microscope, and they in turn are taking a hard look at third-party service providers to ensure business practices and services are on the up-and-up in terms of the new requirements mandated by Dodd-Frank.

To guide settlement service providers through the changing landscape, the American Land Title Association developed a series of industry guidelines dubbed "Best Practices." Implementation is voluntary, but in doing so title companies can demonstrate to the consumers and real estate professionals alike a level of professionalism – and ensure a compliant real estate settlement experience. 

$3,000: personal check limit at closing

The Federal Title & Escrow Company team will make every effort to provide its clients with a precise Cash to Close amount, in advance of the closing date, so our clients can arrange for a wire transfer or obtain a cashier’s check for the exact amount.  

In some instances, due to last-minute changes in financing or sales contract revisions, the Cash to Close amount will change after the client has already wired her funds or obtained a cashier’s check.  

If the change results in an additional Cash to Close amount exceeding $3,000, the law prohibits the client from writing a personal check to Federal Title and the client will be required to wire or obtain a cashier’s check for the additional amount.

DC Code §31-5041.06(d)(3) states, in part, that a title insurance producer may accept a check in an amount not to exceed $3,000 that has not been finally paid before any disbursements.  

This means that Federal Title & Escrow Company is prohibited from accepting a personal check at the time of closing that exceeds $3,000.

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Our blog contains general information only, not intended to be relied upon as, nor a substitute for, specific professional advice. Rate tables and figures that appear on our blog are deemed reliable but not guaranteed. For current rates & policies, refer to our Quick Quote and Consumer Guide. We accept no responsibility for loss occasioned to any purpose acting on or refraining from action as a result of any material on our blog.