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