Congratulations! Your clients ratified a contract and are well on their way to settlement.
What happens next?
Do you simply submit the contract to the title company, and move onto the next deal? I sure hope not.
If you want to keep your client and title company happy, here are four title tips to make the closing process go smoothly.
1. Manage your clients’ expectations
As a settlement attorney, I once had sellers come to me at the eleventh hour to assist with their closing because they had lost faith in their real estate agent, the agent’s broker and the title company. This all could have been avoided had the agent managed the expectations of his client.
Being able to guide your clients and keep their expectations in check throughout the closing process is a valuable skill that will help your clients have a smooth settlement — especially given that in today’s world of instant information, internet research and HGTV-style shows, many clients have unrealistic expectations about the home search and closing process.
You’ll be of great service to your clients by managing their expectations — from the beginning of your agent-client relationship through settlement day.
2. Minimize walkthrough issues
I cannot tell you how many times I have walked into a settlement to be told by the agent that there is a walkthrough issue, and they want to do an escrow or a credit for a repair. (Full disclosure: This may not be an issue in your state, so this may or may not apply to you.)
The walkthrough issues include a lightbulb not working or home inspection repairs being incomplete (such as a deck permit not being removed).
The cardinal rule to remember with credits and escrows is that those must be approved by the lender — emphasis on “must.”
Because the lenders are required to send out the Closing Disclosure so that the buyer has it at least three business days before consummation of the transaction, there is less of a chance that they will agree to a last-minute credit or escrow due to a walkthrough issue.
Additionally, depending on the type of loan that the buyer has, an escrow or credit for a repair may not be allowed.
3. Review the settlement statement before closing
You should make it a priority to review the settlement statement.
Any errors that you find should be brought immediately to the title company prior to settlement.
I have sat in many settlements and reviewed the settlement statement only to be told by someone that a number is incorrect or a number is missing.
Title companies rely upon information given by third parties. So in the event that incorrect information appears on the settlement statement, it is important to let the title company know ahead of time — preferably early.
This will avoid having delays during the settlement.
4. Check your commission
One time a listing agent decided that she deserved — wrongfully so (a story for another day!) — a 3.5 percent commission.
She told the title company to change the commission so that she received 3.5 percent and the buyer’s agent received 2 percent. That being said, nothing was said at the table about the issue, and the money was disbursed.
Take my word for it: It is far easier to fix the commission before everyone signs the document than after the money has been disbursed. You have worked hard for your commission.
Do not be shy about reviewing it to make sure that it is correct. If you notice an error in it, let the title company know ahead of time. Believe me, we want you to get your money as well.
My goal as a settlement attorney is for your clients to be happy with the service you — the agent — provide. Incorporating these simple recommendations into your business practice will go a long way toward ensuring your client’s happiness and your success as an agent.
From where I sit at the table, these things are the ones that truly matter.
Karen Daily-Ekofo is a settlement attorney in Ashburn, Virginia. Connect with her on LinkedIn.