ACS Archives - Attorney's Closing Services

Anticipating problems before they happen will help your closing stay on track. Having a contract is just the beginning. Between 10 percent and 14 percent of pending real estate transactions do not close. Another 20 percent are delayed, according to a Realtors Confidence Index survey conducted by the National Association of Realtors®.

Setting realistic client expectations and educating your clients about possible issues that can occur at closing are essential- from buyers who may not qualify for a loan to delays with title. Most hurdles that delay or prevent a closing fall into three main categories, which include:

1. Loans & appraisals

2. Titles

3. Home inspections

New lending and closing regulations have resulted in more delays. Having a thorough understanding of the rules and allowing time for compliance will help you get over this hurdle. Changes to the federal Truth in Lending Act and RESPA have slowed down the closing process. The updated HUD-1 form adds a few more hours of document preparation.

Lending rules have also made it harder to close on time if circumstances change late in the deal. Amendments to the Truth in Lending Act require a three-day disclosure period if a borrower decides to change the loan amount or anything else that can change the interest rate.

To prevent delays, avoid last-minute changes whenever possible. If the matter is out of your control, the best thing you can do is help your client have realistic expectations about how long the transaction will take.

Title defects are another major closing hurdle, but one that can be avoided with the proper preplanning. Adding a checklist to the purchase contract can help identify issues that can hinder a title- basically anything that can be tied to the property such as bankruptcies, oil and gas leases, etc. Short sales and bank-owned properties are particularly prone to title issues. HOA fees and unpaid repair costs can have an effect on the title and delay a closing.

If a home inspection uncovers serious issues, the time it takes to negotiate which party pays for repairs and gets estimates, can result in big delays for a closing. Alerting buyers to possible high-cost repairs and suggesting that they factor those potential repair costs into their offer can help minimize post-contract negotiations.

By focusing in on these most common closing hurdles, you can successfully take control of your transactions and master the close!

Attorneys’ Closing Services (ACS) assists everyone from the sole practitioner to fully-staffed offices. We offer full service processing for commercial and residential attorney title agents. Whether your office needs assistance with full or partial closing processing services, ACS stands ready to assist you at a moment’s notice. ACS is owned and operated by Ronald J. Conte and David H. Trevett, practicing attorneys who have more than 50 years of combined experience in the fields of law and real estate. We would be honored to work with you on any and all of your real estate closings. To learn more, click here or call us today at 407-270-8855 to see how we can help you.

In Florida, a legal conflict between the buyer, seller and a third party with a vested interest in the property can quickly derail the closing in a real estate transaction.

These third parties can include contractors who have performed services to improve the property prior to sale and have filed a lien in the public records to ensure they get paid for their work. Until these title issues are resolved, the closing cannot occur due to the seller not being able to convey “marketable title.”

Here are a few examples of common title issues that can arise during a title search prior to closing.

Florida Statute Chapter 695 Record of Conveyances of Real Estate protects people from schemes and silent deals when it comes to the ownership of real estate. For example, let’s say a contractor is in the process of replacing hardwood floors in the home. If the deal closes, whose responsibility is it to pay the contractor? The seller who hired him or the buyer who is enjoying the new floors? In accordance with Florida’s recording law, the title to the home is not marketable if the contractor filed a notice in the public records that he performed the services to improve the property. The contractor in this case has the superior interest, which would likely prevent the real estate transaction from closing.

You might be surprised how often two individuals claim to have deeds or titles to the same piece of real estate. In Florida, we have what is referred to as the “common source of title” legal doctrine. Here, there is a conflict when two parties both claim title to the real estate from a single source. Under the law, the party that can provide evidence of “better” title from that single source will be given legal title to the property.

When a buyer decides to purchase real estate in Florida, and takes title to that real estate knowing that there are prior claims on that property, then the buyer accepts full responsibility to those claims. For example, there may be a covenant within the deed itself that stipulates that the buyer assumes a specific debt against the land as part of the sale and purchase price. That covenant will legally make the buyer liable for that debt. The buyer does not have to sign any document agreeing to “accept the debt as their own,” by simply paying the purchase price and taking the deed, the buyer has accepted responsibility.

ACS is owned and operated by Ronald J. Conte and David H. Trevett, practicing attorneys who have more than 50 years of combined experience in the fields of law and real estate. We would be honored to work with you on any and all of your real estate closings. To learn more, click here or call us today at 407-270-8855 to see how we can help you.

Source:

http://www.abajournal.com/blawg/About_Florida_Law

Tips to Clearing the Most Common Closing Hurdles

Key Title Issues that Can Derail a Florida Real Estate Closing