Jan 22, 2015

Tip 33-2014: Use Only Local Settlement Agents

The actual closing process is regulated by state law and local practices which protect both the Buyer and the Seller. In the vast majority of the Commonwealth, the Purchaser's settlement attorney or settlement agent disburses all the proceeds from the transaction. The Seller is basically unrepresented.

In Central Virginia, our local practice results in actual representation for the Seller. As a result, the Seller's attorney or Settlement Company disburses the Seller's proceeds including pay off of the mortgage and real estate commissions. Our local bar has procedures in place which allow this to occur while still protecting the Purchaser.

Unfortunately, whenever a lawyer or settlement company from outside our area is hired to represent the Purchaser, a major issue occurs. The Purchaser's non local settlement agent, unfamiliar with our practices, insists on the closing occurring their way. This may mean that someone unfamiliar with our local practice demands to record and disburse all the proceeds. Not only is there no protection for the Seller, but the use of an out of the area settlement company may result in several days delay in recording the Deed and paying the mortgage and realtor.

It makes no sense for an out of state title company to insist that the Purchaser meet a traveling notary at a fast food restaurant to sign closing documents. It also makes no sense to send an original deed to an out of state agency so it can be "processed" only to have it mailed back to record in a local Clerk's office. Yet, all of those requests are possible when dealing with an out of area settlement agency.

Rather than deal with the potential headache of arguing over who will be disbursing funds and rather than deal with potential delays in the closing, strongly encourage Purchasers to use a local settlement agent. There are a number of excellent real estate attorneys and settlement companies in the Central Virginia market. The time involved and problems caused in requiring the settlement agent to follow our local practices is not worth all the problems caused.

P.S. This Tucker's tip is not meant as a self-advertisement but is really just trying to create solutions for a smooth closing. Out next tip will outline a "hypothetical" situation where an out of state settlement agency caused major issues with a local closing.

Contact me at 434-951-0858 or Tucker@TGBLaw.com if you have questions.

Charlottesville Real Estate Attorney
William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville & Lake Monticello

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