Here's a hypothetical scenario
that highlights some of the issues that can arise when a Purchaser uses an out
of state settlement agency:
1. The seller's closing
paralegal advises the buyer's out of state closing agent in writing about
Central Virginia closing procedures, namely that seller's side needs a wire for
all seller side disbursement prior to releasing the deed. The closing paralegal
provides these closing procedures to the buyer's side a full THREE weeks before
closing. The buyer's agency agrees to close the Central Virginia way.
2. On the day of closing (a
Friday), the buyer's side suddenly refuses to close the Central Virginia way.
The seller's side contacts the senior title underwriter, and a compromise is
reached. But not for long...
3. The local agency of the
actual Title insurer refuses to budge. They insist on making all seller
disbursements post recordation. The out of state settlement agency threatens to
return the lender's wire, stating that the closing will just not occur. The out
of state agency requests that the seller's side UPS/FedEx the original Deed from
Virginia to their out of state office so that it can be "processed"
and mailed back to record in the local clerk's office.
4. The seller's side offers
to facilitate the transaction, i.e., sit with the buyer for closing, supply a
conference room, update title, and record. The buyer's side does not accept the
offer and sends a traveling notary to meet the buyer at the property to sign
closing docs.
5. The traveling notary is
late.
6. The day of closing
passes...
7. Negotiations continue
into the next week. It makes no sense and does not protect the Seller to send
the executed Deed out of state without any guarantee as to when or if the sales
proceeds will be paid to the Seller. Just when it seems as though no compromise
will be met, the closer from the buyer's agency calls the seller's closing
paralegal and asks if she will be willing to record and update. The buyer's
closer says she will send all seller disbursement except the payoff but will
send confirmation of payoff immediately after recording and sending her wire.
Buyer's closing agent agrees immediately as it is now Tuesday afternoon of the
next week.
8. The Deed is finally
recorded Wednesday. Also, the Seller's loans were paid off a full week after
closing, adding several days' additional interest.
If the above scenario sounds
convoluted, use it as a reason to encourage buyers to use local settlement
agencies!
P.S. The real estate commission
was mailed directly to the listing realtor from the out of state settlement
agent. Unfortunately, it was mailed to the wrong address and took an additional
week to get to the realtor.
Contact me at 434-951-0858 or Tucker@TGBLaw.com if you have questions.
William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville & Lake Monticello
434-973-7474
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