I close a lot of deals in title companies. Some are really good and some are really bad. During a purchase I may have problems with the title company and I will decide to pull the job and take it somewhere else. Here are some indications that your title company isn’t the right one for your deal.
1. During first phone contact they ask me if I am attorney or a realtor because that is who they normally deal with.
2. They said you don’t have a down payment for escrow. You must have a down payment for us to open this file.
3. During initial title search they report a large first mortgage on the property, but fail to report the mortgage release that was easily available on-line.
4. In an email addressed to both Buyer and Seller they reported the incorrect mortgage information and added a paragraph explaining that the offer amount was not valid since the property was sold for ten times that amount ten years ago.
This actually happened to me recently during the purchase of property in TX. I was already looking for another title company at step 2. I will give you some more details from each step.
1. The title agent insisted that I needed to get an attorney or a realtor. She said that the attorney could draft a Purchase Agreement. I said I have a Purchase Agreement like that and it is signed by both parties. End of discussion.
2. After receipt of the contract from me, the title agent called me and told me that it was not valid without a down payment for escrow. I have done dozens of deals in title companies with no down payment. I basically said “take it or leave it.”
3. This was a deal breaker. The title agent called up to tell me that there was a $233K lien by a bank on the property. I took notes and then checked on a site that I use called Texasfile.com. For most counties in Texas I can look up deeds, liens, mortgages, etc. I found the lien and I found the mortgage release for it. This was just incompetence.
4. It should never get this far. Anytime the title company or one of their employees tries to coach the seller to reject the deal, they should be hung without trial. In this case I agreed to purchase the property for $30K with $40K in back taxes. The seller was about to lose this property and get nothing. I am putting $30K in her pocket after close and wiping out the lien. I am her best friend right now. She recommended this title company because “They were real good for her in the past.” When I called her and told her that I needed to move this transaction to another title company she agreed right away. They had been asking her for information that is on public records and she thought it was odd.
Make sure that your title company is working for YOU. Some of them have weird policies and they believe that they are there to judge whether the deal is valid or not. If you get a whiff of this attitude, run to another company right away.
Kevin Farrell - Moderator
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