More Questions Than Answers

By: Curt Swearengin

www.icouldbeyours.com

www.amcapholdings.com

The burning question that I am asking is what are the advantages and disadvantages (if any)  to split the title transaction on a purchase?   

Question?   What exactly is RESPA Section 2608?

Answer ?    Although the choice of title company is often made by the listing agent, federal law provides that a purchaser utilizing a federally regulated lender may dictate this choice.

More and more I am seeing additional closing fees being charged to my borrowers by title companies that have a relationship with a Realtor. When we are executing a refinance for our clients, we have a set amount for title closing fees that have been predetermined by our title company and of course us. Yes we negotiated what fees that we will charge for this type of transaction. When one of our clients has chosen a home from a Realtor that is acting as a sellers agent, that Realtor chooses the title company for the seller. Usually this is a Title Company that they have a relationship with. Lately we are seeing fees that are outrages to what we are comfortable having our clients pay for. Examples: A title closing fee of $ 500.00. A doc prep fee of $75.00. A courier fee of $50.00. A overnight fee of $50.00. A fee to pay a fee of $$$ well you get the picture. We have had no control over what these fees might be. The end result is that our client ends up paying more costs for the transaction than they should.

I am not trying to start a fight with my friends at Re-Max offices. Have I mentioned that I love Realtors! But we have to inform our clients when they are going to enter into a contract with some not all Re-max offices that in the contract OUR client will have to pay a $295.00 transaction Fee. I will tell my clients to negotiate this fee. Well in reality what I tell them is to not agree to this fee.

Question?   Why should my client pay the Sellers Agent A Fee at all??

Answer:       They Shouldn't!!

If our title company can issue a simultaneous policy even if the transaction is split. The end result is that our client will not pay more for the policy than they would if the Sellers title company issues both policies. And we can control the costs that are charged to our client. A win win for our client.

Question?   Does the agent get a piece of this transaction fee? Does it offset desk fees?

Answer:        You tell me. After all the Title says more questions than answers

We are getting a lot of requests to split theses transactions. On the surface there seems to be alot of compelling reasons to split these tranactions.

• The cost control
• The fact that the parties are separated
• The fact that schedules are easier to accommodate

Question?     Ever had a conflict between the parties at the closing table?

Answer:        I sure have unfortunately

Question?    Can the closing agent take some additional time to explain some particular aspect of the deal without agitating the other parties?

Answer:       Probably

Question?    What are the Pitfalls?

Question?   What is the down side for the buyer?

Question?    What is the down side for the seller?

Question?    What is the down side for the selling Realtor?

Question?    What is the down side to the sellers title company? Other than the lost Fees?

Questions?   What Do YOU Think????????????????

Curt Swearengin:

www.icouldbeyours.com

www.amcapholdings.com

www.cfic.com/1541