I live in Florida. For those of you who have spent any time here in Florida, you have most likely noticed that there is a Title Agency office just about on every corner. Some of these offices are owned by non-attorneys and some are owned by attorneys. Additionally, some of these offices are actually owned by the title insurance underwriters themselves. These are known as “direct offices”, in the industry. Lastly, there are the law offices, who concentrate their work in Real Estate transactional matters. These practitioners don’t typically get involved in any litigation. Because there are three distinct service providers in the marketplace, competition is keen, to say the least. Particularly in this marketplace, where there is anywhere from 3-5 years worth of housing inventory available for sale, not to mention the refinance marketplace… In many areas of the country, this competitive setup is very similar, with slight variations too numerous to discuss in this article.
For the non-attorney owned title agency offices, there is only one function that they truly exist for, and that is to produce a title policy to insure either the lender or owner of a property, or both. They are allowed to process whatever paperwork is required and necessary to the transaction, as long as a policy of title insurance will be issued. Many times, this is really all that is needed from the closing company for a particular situation. And that is fine. However, many times there really is much more that should and could be done to insure a trouble free closing for all parties.
As a transactional Real Estate Attorney, I am a Title agent who happens to be a lawyer. The major difference in hiring me to process a closing rather than a title agency is that you get the benefit of having an attorney’s eyes looking over the paperwork rather than someone who may have just squeezed out of high school recently… Many times I have reviewed Deeds as part of my normal examination of the title search materials, that have attempted to transfer property, but really didn’t. I have also reviewed Powers of Attorney that were completely ineffective, that were used to transfer interests or execute mortgages. These are issues that have come up during routine refinance transactions and purchases, where I now had to try to clean up the mess... It is also at this point where the title agent normally should refer you to an attorney to get things fixed, but many times will not. Not because they don’t want to do what is right, but because they just don’t recognize that there was a problem, in the first place.
There is another huge benefit to having an attorney handle a transaction. Only an attorney is legally authorized to answer questions that may affect the property rights of the owner. I am sure you have all had these types of questions pop up at a closing, and watched the non-attorney agent, wing it, with some off-the-cuff, “Reader’s Digest” answer… Again, they don’t want to say something wrong, but they also don’t want to say that they aren’t allowed to answer the question. That could cause them the opportunity to finish the closing and earn their living. As an attorney, I can represent the buyer, the seller, the title insurance company, even the bank. Not all at once, but I can answer the questions posed at the closing table to insure the complete understanding of the parties as to what is happening.
Lastly, I want to address the issue of the costs involved in closing a transaction. It is not automatic that having an attorney involved means the deal will cost more to the parties. Many times I have been given a copy of a title agent’s fee quote and there are fees on there that aren’t even legal to be charged to conduct a closing. The settlement/closing fee was very small, but the ancillary fees were illegal. When I compared my fees to this quote, I was significantly less costly. I have also seen fee quotes from other attorneys where the fees were obscenely high. Typically, there is minor, if any differences in costs. Sometimes these differences involve the use of third party vendors that may be higher or lower in their fees, which affect the bottom line costs, but not the fees of the closing agent. Remember though, when you pay less, you usually get less. Piece of mind is always worth a little more…
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