Steve Dalton commented on my last post that sometimes "title companies get in the way" of closing legitimate real estate purchases and refinances.
Title companies are at the bottom of the hill that is a real estate transaction.
And guess what? It all rolls down hill. Delays, misunderstandings, mistakes, and last minute stipulations get compressed as the closing date looms. And since the title company is the last one that generally has to do anything prior to closing, I'm not surprised, and even expect, that clients may feel that we get in the way from time to time.
What may seem as needless meddling in the consummation of the sale or refinance is usually the title company trying to resolve conflicting instructions received from one or more of the parties to the transaction.
Common conflicts between the Purchase Agreement and the Lender's Closing Instructions revolve around the Buyer's net cash back or net cash to close being outside the Lender's permitted tolerance, handling inspection and repair credits, and how the Seller's contribution towards closing cost is defined and set out on the HUD-1. In Indiana, the Purchase Agreement often requires prorating taxes in a way that is simply not possible given the inherent one to two year lag time of tax assessments.
We resolve all the conflicting instructions by requiring written clarifications and Amendments to the Purchase Agreement, Closing Instructions or Title Commitment. If this process seems to you to be getting in the way of a closing, it's probably our fault for not explaining this correctly.
Just like you, we don't get paid unless the deal closes. Why would we want to make things needlessly difficult? We don't. All we're trying to do is resolve the conflicts so that we can close the transaction without compromising our fiduciary responsibilities to all the parties.
There's always a reason behind what a title company may require. If we don't explain it sufficiently keep asking until you understand. Sometimes, you can clear up a misunderstanding that will make things easier or even eliminate the requirement. As always, good communication is the key to a successful closing experience for you and your clients.
Good communication helps us dodge that rock at the bottom of the hill, too. For which we are eternally grateful.
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