Tuesday, November 24, 2009

Not All Title Companies Are The Same

We previously wrote an article why its important for a buyer to pay owners title insurance and select a competent title company. Sometimes, that becomes a problem in negotiations if the seller wants to control the title work, or listing agent or brokerage has an aflliated business arrangement or receives illegal kick backs from the title company.

As mentioned, seller title companies with bank foreclosures are some of the worst in service and competency. They have asked the buyer to sign very unusual documents, for instance, they wanted the buyers to sign a 3 page document stating the title company had limited liability when holding the escrow check or buyers money. So basically, if they lose the money they are not responsible.

Also, at a closing a buyer had to review and sign title company disclosures, indicating that the closing statement they are signing is not final as "not approved by seller". Typically, when buyer gets to closing table, signs documents, and provides their check means all parties have reviewed the closing statement with finalized charges.

And for the real shock, the title company presents illegible lien search documents and buyers had to sign a disclosure indicating that title company will NOT interpret the lien search. This should be interpreted by all title companies, buyer is not qualified to do this especially at the closing table.

So if a buyer uses the seller chosen title company, it may be a good idea to have an attorney review the title work process with checks and balances along the way in the event the title company does provide full service and conduct a through job. This extra cost would be valued added for such as large purchase.