While the title agency tends to take on its fair share of the detail-oriented work of a transaction, it’s when communication and cooperation collapse that closings tend to be delayed. Here’s why both companies need to work together and communicate clearly.
Most agents and brokers have their share of experiences where a smooth sale turned into a nightmare during the closing process. In fact, many real estate agents turn to Tylenol when the sales agreement phase gives way to the title and closing phase.
It’s a love-hate relationship that often leans more toward hate than love – the title broker and the real estate professional.
However, while the title agency is sometimes to blame for the late closing, that is rarely the case. Sometimes it’s just the process itself and a lack of understanding about it. Many times, it is a lack of communication and collaboration that leads to unexpected and unwanted results.
For example, I am aware of a case involving a recently widowed saleswoman who was ill. Once an agreement was reached, the buyer’s lender demanded that the mobile home titles be removed prior to closing.
Of course, it was eventually discovered that the mobile home dealer had never bothered to register the motorhome with the DMV in the first place. Naturally, that mobile home dealer was difficult to locate, uncooperative, and unresponsive to requests from title companies.
Then the title agency had to go through the process through the DMV. The closing process it is slow enough under the best of circumstances. When the DMV is injected into the process, there are no happy holidays. Of course, it was the title company that took the blame for the heist.
It is not just the lack or delay in communication that slows down a shutdown. Sometimes the title agency and the real estate professional need to meet halfway. As Hoyt Mann, president and co-founder of alanna.ai said via email:
“Sometimes the challenge is the title agency’s inability to make things easy for the agent. Why aren’t more title agencies enabling text technology for data collection or communication? Is it what many REALTORS prefer? Agents are constantly on the move. They often work from their phones off-site, not from web browsers or laptops. But a title agency is also not always useful to create an application or a portal for REALTORS. An agent is likely working with multiple title companies at the same time. If each requires the agent to log into their own application to communicate, who can blame the REALTOR for eventually ignoring all applications? “
Sometimes it is simply a matter of understanding and experience. Jim Paolino, CEO of LodeStar Software Solutions, also said in an email:
“Some newer agents think of the title as an inherent delay in the closing process. But most of the smart REALTORS I know have a pretty clear understanding of the typical moment to close; what is the purpose of a title policy, etc. Those are the agents who seem to have the least concerns about their clients, in my experience. ”
That understanding can help an agent ease customer stress from apparent delays, as well as save them a few emails, texts, or phone calls.
In some cases, the division between the real estate professional and the title professional is a matter of paying attention to even tedious work. While the many requests for additional information from the title agency may seem like a hurdle, attention to detail can make all the difference..
It is true that both title agency and real estate agents are constantly engulfed in a constant increase in emails, texts and calls about multiple transactions, client inquiries and even applications, making it very easy to lose a email or text message with the necessary information. But it is important nonetheless.
I know of one case where the listing agent did not actually contact the title agency. throughout the transaction. When that agent received the settlement statement, based on the commission information provided to the title agency by that agent during processing, the agent quickly approved it with just a glance.
The closure came and went. But when the sellers received the final signed closing documents, they realized, after the closing, that the sale price and commission they were in fact wrong. Only then was it discovered that there was an addendum to the contract that changed the selling price / commission that had never been posted to the title during the transaction. Needless to say, the cleaning from there was disgusting.
On certain occasions, everyone plays its role in creating a closing delay. A title agency I know received a new contract. The vendors quickly notified the agency that they were traveling and that they would be in contact for payment information once they returned to town. The title company got down to business and found that the property had two mortgages.
Here, the error was on the title side, as the file was not marked for follow-up with sellers on the necessary information. Ten days before the scheduled closing, the title agency realized that the seller’s information was missing.
Quickly, they called one of the sellers about the second mortgage only to learn that one of those notes had been canceled, but a Mortgage Satisfaction had never been filed.
This required the title agency to contact several potential lenders and await their painfully slow investigation, which included information kept with lenders that had closed during the 2008 crash or acquired afterward. The sale was closed, but after days of delay.
The real estate transaction is as much a matter of detail and communication as it is of fulfilling the American dream. While the title agency tends to take its fair share of detail-oriented work, it’s when communication and cooperation collapse that closings tend to be delayed.
And when both companies make a good faith effort to work together and communicate clearly, there is no reason for the closing to be the worst part of the sale.