Have you ever confronted a toddler about eating a cookie before dinner only to have them deny the accusation? But what they don't realize is they have chocolate all over their face. Guilty as charged, they refuse to admit their wrongdoing until you hold a mirror up for them to see their reflection. I had a similar event occur this week with the manager of an escrow agency.
An agent under my brokerage had been dealing with a nightmare of a transaction the past six weeks. The seller he was representing challenged him and kept him on his toes at every turn. In spite of the obstacles he was able to get the buyer and seller to the closing table only to have a previously negotiated cost on the wrong side of the final settlement statement. Early on in the contract negotiations my agents seller refused to pay for a home warranty and specifically reference the section number and line number of the contract and stated that the home warranty was to be changed to read 'paid for by buyer'. Both parties signed this counter offer which referenced the agreed upon change. The seller did however agree to pay a percentage of the buyers closing costs which also was referenced in all the appropriate sections of the contract and was signed off on by both parties.
As the seller sat down to sign her closing documentation she was surprised to see the home warranty was still listed on her side of the paperwork. She asked the escrow officer to make the correction and referenced the contract counter offer where the change was made. The escrow agent refused to make the change and informed her that she agreed to contribute a set percentage towards the buyers closing costs and that she, as an escrow agent, was authorized to apply the fee wherever needed. No amount of discussion from my agent or the seller was able to convince the escrow officer that the closing statement was incorrect and the file was sent to be recorded.
When I finally received my copy of the closing statement the seller was still incorrectly charged for the home warranty fee. I placed a call to the escrow agent in an attempt to have the seller reimbursed for the mishandled charge. Despite my attempt to walk the escrow officer through the contract which defined the closing costs and where they needed to be applied, the escrow representative doubled down on their insistence that they were correct and nothing further could be done.
In a further attempt to resolve this egregious error, I drafted an email to the escrow officer, and copied the seller, my agent, and the buyers agent. I outlined the pages, sections and line numbers of the contract and the terms the parties negotiated. I also included a link from the Department of Real Estate and NAR where they specifically outline the Residential Resale Contract and define what are considered allowable Seller Concession charges, and what costs are not allowed (the home warranty being the first non-allowable example they list).
Wouldn't you know, two days later I received a response from the escrow company advising me that their senior legal council had reviewed the transaction and would be fully refunding the seller for the incorrect charge. So what did I learn in real estate this week? I learned the importance of knowing contract language in regards to legal definitions and intent. I also learned that whenever faced with a difficult individual, relying on years of experience in how to handle these types of challenging situations will almost always result in a positive outcome.
If you or someone you know are interested in purchasing or selling real estate in Gilbert, Arizona or the East Valley contact us at ZionRealtyAZ.com. We know Arizona real estate law and will fight for your rights as a buyer or seller.
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