Title Company Choice in Short Sales

Do you work with a specific title company? Most working in the real estate, will have one, maybe two companies come to mind.  Those outside of the industry may remember the name of the company they went to for the closing on their residence, but many couldn't name it on a bet.  So, you may be surprised to learn that the title company involved in your transaction plays a most important role.

Both market centers I have worked at have an affiliated business arrangment with a title company: that means they receive a financial benefit when you choose to use that company.  This fact is disclosed to the buyer or seller when the contract is written.  You trust that much thought went into that decision, and I certainly know that to be the case at my current office.  However, more and more of late, I have had reason to believe that someone needs to remind many in the industry of their fiduciary duty to the client, not their bottom line. 

When dealing with short sales I use Lawyers Title because they stepped up and paid for their closer to become certified in short sale closings.  They recognized the value of being educated in effectively dealing with what is quickly becoming a sizable portion of the market.  It should be noted that neither my market center nor I have a business arrangement with them.  

In a short sale transaction, estimated HUD statements must be submitted with each offer.  Further, there are lender requirements and government guidelines that need to be followed and once you "have the bank's ear" you do not want to risk the deal by not delivering a correct HUD in a timely manner.  Although I cannot require that the buyers of a short sale property use Lawyer's, I do explain how the title company choice can affect the transaction and hope they understand the risks.

Short sale transactions are filled with pitfalls and aggravations.  I believe that, just as Realtors need to recognize the need, and become educated in the way to deal with them, title companies should also address this need.  Working together in uncharted waters will help deals stay afloat.