Are title companies always like this? (Long)

In My Humble Opinion
1

My father left us a house that he was selling to someone on a private land sale contract. Recently, that buyer managed to get real financing from a loan company, and so we, the parties to the sale, entered escrow last March. I may have mentioned this before. By the way, I am pretty happy about this as I will be able to stop administering this loan, and will get a fairly decent infusion of cash for the amount still due on the house.

The title company forwarded me papers with “demands” in them (actually requests for useful information) with no information about what the papers were or why they needed to be filled in. I filled them in and sent them back post haste.

Then weeks and months went by. There had been a target date for closing, at the end of May, and it went by without comment. June went by without comment. July went by without comment. Finally I sent an email asking if there was any progress and/or what was the holdup. My question was answered. (Not their fault, which I do believe, there was a holdup on the loan end.)

There was another target date for closing, and they requested (nay, demanded) that I provide a payoff amount (this happened for every target closing date). I also provided the daily interest accruing so they could calculate their own payoff amount if they missed this date. They missed this date.

I was asked to sign some papers, they would send a notary (I live some distance away). I said I didn’t know what these papers were. They explained (in rather technical jargon) what the papers were. What they did NOT say was that these papers were my part in closing. There weren’t many papers, I thought there would be more, but I have never sold a house before. That was last Tuesday.

Wednesday evening I got a call from the buyer (we do have a relationship, after all, unlike most buyers and sellers) saying he had been called in Friday to sign the papers for closing. Yippee! Does this mean we’re done? He doesn’t know.

So I send an email back to the title company saying I had had this call and does this mean that we’re done, do I have to sign any more papers, and will the money be arriving on Friday as well?

Crickets. No answer on Thursday, no answer on Friday. Also no money on Friday. I figure the weekend is shot, so I put myself on hold until Monday. Monday I do get an answer: I don’t have to sign any more papers, and they expect to be able to wrap things up on Wednesday (that’s now tomorrow). Period, end of email.

So I reply, asking “Will you be notifying me when you send the money via wire transfer?” And their answer? “Of course.” This is the last straw for my mental state. “Of course,” as if I should have known as much. Did I mention that I have told them at least twice that I am not at all familiar with the escrow process? Did I mention that they have not volunteered one single piece of information about what was going on, other than telling me that I have to do this or that (and never why)? They have answered the questions that I thought to ask, politely making me feel like a moron in the process, and then the last answer is “of course.” Like I’m supposed to count on them being sensible and courteous now, after 5 months of acting like I was an enemy spy who didn’t need or deserve to know anything.

After I calmed down, I realized that in most escrows, the title company probably doesn’t deal directly with either the buyer or the seller, they deal with the real estate professionals who a) negotiated the contract between themselves, and 2) have been through this thousands of times already, and who are being paid to answer the customers’ stupid questions. What a nuisance it was for them, to have to deal directly with ignoramuses like the buyer and me. How grateful I should be that they condescended to answer me at all (and that I’m not the one paying for their questionable services).

So I ask the question in the title, oh so long ago and far above: are all title companies like this?

2

Sadly, it seems to me nearly every party working btwn the buyer or seller is this divorced from empathy for either party. They care about the movement of paperwork, the assurance of correctly executed legal steps and the movement of the right amounts of money; critical thinking is not entertained.
Timetables do not matter to them unless it’s for something they need from you. You are the main obstacle to them getting their job done the way they want to do it. They’re like the surgeons of the real estate world.
Legally speaking, the title company takes on quite a bit of liability; but they’re paid for that, by either the buyer or the seller.
To be snappish in a response to you, when this is the final step in a process that began w/ the death of your father, is rude. Had they written, ‘Of course, I’m happy to do that.’, that’s one thing. This was terse and uncalled for.
They left you to be your own advocate in this; I’d call that unprofessional if it was any other profession.

3

Nawth Chucka, you said it more directly and succinctly than I did. Thank you.

4

Whenever I have engaged in a home sale/purchase I have always been frustrated by the lack of what one might think of as a project plan from these folks. I feel it would be so useful for them to put together a schedule of events at the start of the process with tasks and timings and share with everyone. This way I would know in advance that 3 weeks from now I would need to provide X, Y, Z, documents, and on date xx/xx/xxxx I would be expected to sign a stack of papers. Instead, they seem to keep participants in the dark and then without warning it’s, “You need to come tomorrow to sign, and bring X, Y.” Then when you show up, “Oh, you needed to bring in Z also.” I’m sure THEY are organized, but it would be helpful to the other participants if they were prepared in advance for all of the pertinent steps.

Now, what happens to me internally when I encounter people in these roles who leave me frustrated is that I conclude, “These are not educated people.” I know this is judgemental and a negative trait of mine. But, it provides me with a sorting mechanism so that I adjust my expectations accordingly.

5

When you say “secured financing” was he actually clear to close? The lender would be a party to this transaction as well, and usually they would handle the actual scheduling with the title company. IS it possible the delay was on their end?

6

The title company is looking after your interest as well. They are making sure that the seller has all his ducks in a row before closing can happen. Trust me they want to close as soon as possible as well, because that’s when they get paid. The delays weren’t their doing, it was because the buyer hadn’t met all the conditions to close.

Could they have explained things more clearly to you, of course. Maybe they assumed you had done this before. My advice, ask more questions.

7

It is a VA loan. 'Nuff said?

8

The VA doesn’t do the actual lending, they just provide a portion of the funds through a private lender. Like I said, it may not be that title was the one causing the delays, it was the buyer/lender. I can’t say I’ve ever seen a situation where buyer, lender, and sender were all ready to go and the title sat on it for months.

Just from a lender’s perspective, a VA loan for a land sale contract from an estate sounds like a nightmare loan.

9

Yes - well said. I’ve often been astounded by the attitude of parties to a RE closing. The buyer and seller want to do whatever they can to make it happen smoothly. They have plenty of time to address any issues before the anticipated close date. And specific close dates are likely VERY important to them.

But the banks and title companies are just black holes, acting as tho there is nothing they can do ahead of time, but that everything is just going to magically come together at the appointed date. And - in the majority of cases - it does. When it doesn’t, the buyer and seller have to decide how many $100s-$1000s they will throw at an issue to make it go away, or how much inconvenience they will accept to reschedule the close. The day before a close, some one brings up an issue that could have easily been handled at any time in the past weeks, but now is a crisis.

The only thing I’ve come up with is to understand that that is how these things go, there is nothing you can do about it, and just try to build in as much flexibility as you can to deal with anything that might come up.

10

You’re welcome. I don’t think you’d be as annoyed by how long it took if they’d kept you in the loop w/ more than a day’s notice and professional communication.
I know each real estate or mortgage transaction will be different but so long as the people involved are being honest w/ me and appear to hold themselves accountable in their role, I have little to be peeved about. It’s the agents telling white lies about everything under the sun, the title company ignoring my replies to their requests, the mortgage company pushing out closing dates so far that another month of statements are needed by underwriting (but they think you know to send those automatically) - these are the things that are so frustrating that sometimes people think of the whole process as something to avoid at all costs.
I was taught to take ownership of my work, I expect that from others when important things are on the line.
ETA - I say this all as someone who worked in the mortgage industry and saw all these cogs from the inside as well.

11

I never felt so ready to buy a house as I did 10 minutes after I bought a house. I finally understood how everything fit together and knew how to navigate my way through it. Of course, at that time, I didn’t have any money as I’d just spent all of mine on the house.

The feeling I got is that they’re so used to the process that they don’t realize what a black hole it is to people outside the industry; a lot of the things that they think go without saying really need to be said; and that they’re familiar with the internal timelines to a point that they don’t need to talk about it. Meanwhile, the buyer and seller (doing something they rarely do for some of the biggest transactions of their lives) don’t have a clue what’s going on.

12

Indeed, it is more reasonable to attribute their attitudes to carelessness, than to any nefarious motivation.

But I can’t help but get a nagging feeling that they do this because of that old human need to exert power over others, especially those that may in some way be perceived as their “betters”. After all, how many title processors are out their buying $700,000 homes? So, they know the process inside and out, but it’s kind of a kick to see these swells getting cranky and sweating about the timeline, yah? Y’know, bureaucrats.

But that’s just my most cynical take on it.

13

I guess not 'nuff said. Sorry if I pinched a nerve, but you have apparently failed to read my posts accurately.

What I meant was that the VA was the one sitting on it, making their decision, and nothing could go forward without them. I said earlier already that I believed the title company when they said they weren’t responsible for the delay. I don’t blame the title company for delays, I blame them for LACK OF COMMUNICATION. Which I believe is casual on the part of the grunts that I dealt with most of the time, while the higher-ups think it is not worth wasting company resources on.

Follow-up to Tuesday’s rant: yesterday morning I got a call from a very chirpy young lady, calling from the title company to verify the details of my bank account for the wire transfer. Late yesterday afternoon I got an email (for which I am very grateful, because they weren’t absolutely obliged to do it) saying that they were waiting on the loan company for something before they could wire the money. Nothing so far today, but I have both hope and patience.

It actually does help me to see that I am not the only one who views title companies this way. The fact that they don’t care how they are viewed just goes to show that there is no alternative, and that they have us and everyone else by the short and curlies, i.e. that the demand is very inelastic. I suspect that if one of the big players decided to make customer service their byword and motivation, they would not see a significant increase in business or profits. They certainly aren’t going to do it out of goodwill.

14

Calm down Francis, your post was pretty much about blaming title, so I was just trying to clarify things.

The problem with pretty much any real estate transaction, is that as a private seller, you really aren’t the customer of anyone. No one’s there to make sure you stay happy. The buyer is the lender’s customer, so they want to keep him happy. If you had agents, the lender would try to keep them happy for future referrals. title is happy just sitting and waiting until the lender needs something or is ready to close. So if you’re on your own, the onus is pretty much on you to keep on them for updates.

15

That’s so brilliant, of course it would never work. :wink:

I got gentle revenge on a title company once through pure malicious compliance. It was my second home purchase so I knew what to expect. I felt that the realtor who did my paperwork (I was the buyer) was a complete newbie - she didn’t do anything wrong, but on the estimate paperwork (I forget the form number now, HUD-1?) she put down a totally wild guess for the taxes. She admitted as much and said we’d get all the estimates corrected before closing, and I knew that to be true so didn’t worry about it.

Day before closing, the title company emails to tell me to bring a check for the closing costs. I ask them for the finalized numbers because I hadn’t seen any updated numbers since the first estimate. Silence. A few hours go by until I need to get to the bank NOW to get that cashier’s check before they close, so I call the title company and again ask what the actual closing costs are. She tells me to just bring a check for the amount in the estimate form. I tried to tell her that the estimate was a complete guess and likely to be very, very wrong, and she adopted a tone of talking to a 3-year old. I gave up and asked her to confirm that if my check is too high, will they refund me? She said yes, they’ll write me a check for the overage.

So closing day, after ALL the papers are signed on both sides, it’s time for me to present her with my closing check. Her eyes absolutely bugged out of her head. She had to cut me a check for 4 digits (to the left of the decimal). It was hard not to smirk, but the knowledge that it was pure luck that the estimate was in my favor kept the smirk off my face. I’m sure if I had to go get them another check it wouldn’t have been so much fun.

… not to mention the idiocy of swapping checks like that. What are we, a money laundering service?

16

JcWoman, that is simple but beautiful. It’s funny b/c part of the process is designed to keep it from being a money laundering method.

17

This is one of the reasons why in Canada, real estate transactions, even for house purchases, are handled through law firms. Both the buyer and the seller have solicitors. As seller, you have someone whose sole job is to look out for your interests in the sale, and keep the transaction moving in your favour, not to the bank’s timetable.

Plus, in provinces that use Torrens title, there’s no need for title insurance. You own what’s shown on the title.

18

I’ve only bought and sold real estate in Connecticut, and have always used a real estate attorney here as well. In my experience here in Connecticut, there is usually only one attorney present, and their fees are paid by the buyer (which means that they are technically working for the buyer, but in practice, they make sure everyone is playing by the rules and that nobody is getting ripped off or defrauded). All funds that are transferred go through an escrow account controlled by the attorney.

For my first house purchase, our real estate agent recommended the real estate attorney. We liked him, and used him for every real estate transaction afterwards, including another house purchase and 3-4 refinancings. For the sale of our first house, we suggested (through our real estate agent) that the same attorney be used (even though we weren’t paying for his services that time), and that’s indeed who was used.

I’ve always felt more comfortable with an attorney looking over all of the paperwork and making sure everything is done properly. It would be really, really bad to make mortgage payments for decades only to find out you don’t actually own the property because something wasn’t done correctly at the time of purchase.

With respect to title insurance, our real estate attorney is the one who has always purchased the policy on our behalf (and on behalf of the lender). I’ve never had to deal with a title insurance company myself.

19

As somebody who used to work in title (but never liked it), I’m not going to defend the title company. But, perhaps I can give some insight into the process.

A title company, in case anybody isn’t sure, is responsible for providing (and insuring) that clear title, or ownership, of the real estate is passed from seller to buyer. Real estate is somewhat unique amongst forms of property in that it can be pledged in lots of different ways (in law school, the clumsy analogy is that it is like a ‘bundle of sticks’ which can be disbursed) : so, for example, you can own a home, but rent it to one person, pledge that another person gets it when you die, and impose obligations on how it is to be used after it is conveyed.

A title company first identifies those encumbrances, then does whatever is necessary to clear them up so the buyer doesn’t discover, for example, that the person who sold them the house only “owns” it for the remainder of their life, or that another person has the right to live there.

Typically, these clouds on title are relatively easy to clear up - if somebody has recorded a lien against the house to assure that they get paid back (i.e. a contractor or mortgagee), the title company gets a payoff, in writing, to guarantee that if, at closing, they pay the debt, it will be released. Other times, they may need an affidavit from somebody. Or, they will need a new or corrective deed. While clearing title can be routine, it can also get quite dicey.

The point of all of this is to provide title insurance, which is a guarantee that the buyer (who gets an Owner’s title policy) and any lender (who gets a lender’s title policy) in fact owns, or has a priority lien on, the home. If some debt or claim is missed, the title company is on the hook (an exception in the policy is made for listed exclusions; the title company does not guarantee that there is no tax liability for the property, for example. But these are generally narrowly drawn, and may be limited by statute).

THIS explains the title company role. Unless it is a cash transaction, title insurance is required by the lender. So, the title company (who the buyer’s lender insists is used) holds the key to announcing when they can insure the sale. And, since they are the ones doing the insuring, they insist on handling the money (which is, after all, used to pay off any identified debts).

BUT, having said that, the title company isn’t really in control. The lender usually is. Why? Because they have the money which the buyer will use to buy the house, but they won’t give it up until the buyer has given over sufficient information to assure the lender that they are qualified. Problems and delays can arise because either something came up in the borrower’s application (i.e. credit concerns) or the property’s condition is problematic (i.e. it’s not appraising high enough to justify the amount being lent).

Practically speaking, then, once the title company is prepared to clear title, they are then waiting for the lender to announce that they are cleared to close and can schedule the closing.

And, as mentioned upthread, since the title company doesn’t disburse money until the lender sends it, the title company also doesn’t get paid until closing. They want to close quickly, too.

All of this means that it would be quite rare for the title company to be dragging their feet. If they were, it would be because they are trying to tack something down to clear the sale, but that would normally come from the seller who has some encumbrance on their property.

Meaning, if you are the poor seller who has signed your docs (which, you will note, includes affidavits assuring that you haven’t sold or mortgaged the property to somebody else on the eve of sale, which is the title company’s last gasp to ensure that they can provide clear title) and you are just waiting, waiting, waiting, it’s nearly always a lender thing, meaning it’s a buyer thing.

Sure, the title company would have been smarter, better, or more considerate to call you to tell you, but a) they don’t have any control over the lender, so they probably can’t give you any sort of estimate as to closing, and b) the problem is probably your buyer, and they don’t want to scare you or anger you by making you think that your buyer is a flake and possibly backing out.

Of course, the problem is that unless you have another buyer with a better offer (i.e. more money, or cash with an assurance that they will close quickly) the Seller’s most realistic option is to extend the contract and wait for the buyer to finish up their end (in fairness to the buyer, this is usually quite stressful and they are likely doing their best and are responding to some underwriter who insists that they document some random expenditure; although you might be surprised about how many people don’t consider not making other big expenditures right about the same time a lender is scrutinizing their entire financial history).

Buying and selling homes can be very stressful, for everybody involved, and delays are eminently frustrating, but very common. Best of luck!

20

Details matter. You didn’t absorb them, and chose to bloviate about the wrong thing. Just own it and move on.

The rest of your post is just repeating what I and others have already said.