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Your Thoughts: Title Companies writing contracts?

This past week, we received a call from a local appraiser asking to be let into one of our listings. Upon asking questions, it seems a lender ordered the appraisal based on a sales contract. Oh, really? What sales contract?

After making a few phone calls, we found a local title company had written a sales contract for the seller and the buyer. They had no idea the property was listed for sale and that we had a valid listing agreement. The title company said the seller never said a word about having a listing and that they never asked.

The National Association of REALTORS has spent a great deal of money keeping banks out of real estate? How about title companies? Our local title company promotes "full service" in the newspaper and on the radio. Obviously, full service includes writing a sales contract.

There isn't enough room in the sales price to pay our full commission. The title company suggested we write a letter "for their file" requesting any proceeds of the deal be paid to us based on our listing agreement. The proceeds will be a quarter of what is actually owed. (To further complicate this story, the seller has expressed she is walking the road to bankruptcy.)

I'd like to hear your thoughts - title companies writing sale contracts borders on practicing law not to mention real estate without a license. How do other states handle what a title company can and cannot do?

Posted by Debbie DiFonzo - Southwest Missouri Real Estate on 01/28/2007 01:47 PM

Comments (9)

title companies, nar, missouri real estate

9 Comments on Your Thoughts: Title Companies writing contracts?

Debbie,

I have heard of title companies providing the paper work for FSBO's but nothing more than that. Writing the offer sounds like practicing real estate. Is there a buyers' agent involved? I am presuming no.

Welcome to ActiveRain.

01/28/2007 03:38 PM

by Maureen Francis & Dmitry Koublitsky, SKBK Sotheby's - Metro Detroit (SKBK Sotheby's International Realty)

Thanks Maureen!

No other agents are involved. The title company will not give us a copy of the "contract" but my agent was allowed to look at it. She said it is one page, typed - it did not look like a fill in the blank type document that could be procured online or at the local Office Depot.

Do you have any title companies promoting use of such forms and paperwork?

01/28/2007 04:51 PM

by Debbie DiFonzo, United Country VIP Realty, SW Missouri

Debbie

I was in the title business for twenty years and feel comfortable commenting. At this time, it's improper for a title company to write a contract of sale in every state. The drafting of a contract is pretty much characterized as the practice of law or real estate sales. I feel saddened that a title company was desparate enough to openly take a chance like that. That company must be in sad still financially.

Consider calling the title insurer to mention that this particular title agent is writing contracts. You would be doing your profession and community a great favor.

01/29/2007 04:22 AM

by Ed Rybczynski (Rybczynski Consulting)

Working for a Title Company - I LOVE getting a great lead..... and I immediatly pass it onto one of 'my' Realtors or if a Re-Fi, 'my' Mortgage Brokers.

We have no interest in working out the Sales Agreement. I have never heard of Title Co's doing this.

01/29/2007 09:45 AM

by Rob Robinson- Lehigh Valley PA (Bertrum Settlements (Title & Abstract))

Thank Ed - I ordered your video from your website. Great stuff!

Rob - not only do they write the contract, they advertise that they will! Thanks for your input.

01/29/2007 09:52 AM

by Debbie DiFonzo, United Country VIP Realty, SW Missouri

Just curiosity - can you link the Title Company website? I'd like to see what they are advertising.

01/29/2007 10:00 AM

by Rob Robinson- Lehigh Valley PA (Bertrum Settlements (Title & Abstract))

i dont have a problem with a title company providing a service..... but i dont know the law here.

but for the seller to not mention the listing? that isnt right. and maybe the title company could have been more diligent in getting that info.

i have had many clients write their own contracts.... and i send it to the title company for them to review. but never would i encourage this behavior, especially if the home has a realtor attached

01/29/2007 10:56 AM

by Tom Burris | Texas Home Loan Expert (DallasLoanGuy.com)

sounds like a minefield to me

01/29/2007 02:03 PM

by Leigh Brown Charlotte NC Broker/Owner (RE/MAX Signature Properties)

The attorney for the Missouri Assoc. of REALTORS said there are court cases to support a title company filling in the blanks of a standard contract - such as one any buyer/seller could pick up at the office supply store. However, in Missouri they are not allowed to "write" a sales contract.

I can assure you, the contract in this case was typed up - was not in "fill in the blank" format. But, in a small town - what is one to do?

02/16/2007 10:59 AM

by Debbie DiFonzo, United Country VIP Realty, SW Missouri