Comments on: What is escrow’s role when agent & loan officer are present at difficult signing

By: Real Estate » What is escrow’s role when agent & loan officer are present at …

Fri, 21 Sep 2007 10:40:07 +0000

[...] unknown wrote an interesting post today onHere’s a quick excerptIn light of all the mortgage turmoil going on in the sub-prime arena I thought that it may be meaningful to address the awkward situation when a borrower is showing clear signs of “discomfort” with the loan terms presented by the escrow … [...]

By: DB

DB — Fri, 31 Aug 2007 21:03:25 +0000

An unfortunate, yet all too common occurrence. In a perfect world the closing or “signing appointment” shouldn’t take more than 20-30 minutes to complete (sign and initial the pertinent docs). Prior to arriving @ closing/signinng appointment all of the items should have been discussed and reviewed etc.

By: craig

craig — Wed, 15 Aug 2007 23:41:34 +0000

Again, IMHO, not nearly enough. That is basically my business model, although I also encourage people to forego the MLS entirely, particularly if they have some time in which to find a buyer. I charge a flat fee of $795, which is a lot less than 3%, plus you get better legal counsel than you do from an agent (with all due respect, agents aren’t lawyers).

By: biliruben

biliruben — Wed, 15 Aug 2007 23:38:06 +0000

Thanks, Craig. So maybe10% of all buyers?

How about sellers? I heard some dude talking on the radio a few years back, and his recommendation was that if you knew a reasonable amount about the market then a decent option for a seller would be to hire a lawyer, pay a flat fee for an MLS listing, offer full fee to the buyer’s agent.

Is that an option many sellers take?

By: craig

craig — Wed, 15 Aug 2007 23:01:19 +0000

David — that approach takes you directly to one destination: anarchy. The law imposes obligations and provides a mechanism to create and enforce rights. Yes, people are inherently biased, and yes the law is the creation of people. Nonetheless, the law is the only method by which we can strive towards fairness and justice.

The law requires escrow to be neutral. If escrow fails in that duty and causes harm to a party, then the party has a remedy through the law. It may be flawed, but its the only system we have. By your logic, we should give up on that system and… what? Anarchy, I assume. Given that we are in the business of “property,” I think anarchy would be a bad career move.

By: David Young, LO #510-LO-34429

David Young, LO #510-LO-34429 — Wed, 15 Aug 2007 22:43:34 +0000

Philosophically speaking, it boils down to the idea that there can in fact be a ‘neutral party’. Sadly, this idea is the ’sine qua non’ of our industry, in other words, it’s the cornerstone, the foundation.

This fails.

No on is absolutely neutral (i.e. objective). We are humans, that means we have emotions. Only computers are neutral, and objective…they have no emotion.

However, I don’t know escrow law….or much of any law for that matter! If the law requires you to be ‘neutral’ or ‘objective’, then I would argue that that law is ‘non sequitur’, it does not follow. Arguably, the law is unfulfillable.

By: craig

craig — Wed, 15 Aug 2007 16:38:09 +0000

IMO? Not nearly often enough…

In all seriousness, if agents are involved, almost never. If a party is not using an agent, they are far more likely to hire an attorney such as myself who can provide counsel on a flat fee basis. However, I suspect that it is still the exception rather than the rule.

By: biliruben

biliruben — Wed, 15 Aug 2007 16:11:28 +0000

Anyone have a guestimate as to how often a RE lawyer is retained be the buyer in a standard SFH transaction? The seller?

Thanks.

By: craig

craig — Wed, 15 Aug 2007 15:45:57 +0000

Ardell — I have no idea about the timing of things, as I’ve practicing in the area of real estate for two years, so I’m not aware of the change. As to whether or not an agent should insert a “rate cap” in the financing contingency absent a blank space in the form for such info, presumably that would need to be done on a Form 34, and I’m always concerned when agents draft additional clauses to the contract.

I have not yet had the opportunity to fight a battle over the issue: When does a buyer satisfy her obligation under the contract to make a good faith effort to obtain financing? There is some confusion, as at least arguably absent a rate cap the buyer is obligated to seek a sub-prime (sub-sub-prime? a guy-on-the-corner?) loan, and be unsuccessful, in order to get a return of the earnest money under the financing contingency. On the other hand, the law requires a reasonable, good faith effort by a party to a contract to satisfy the terms of a contingency. Plus, the contingency itself references “Buyer’s lender,” thus implying that buyer can work with a single lender. So, I suspect that the law (as applied to the existing contingency language) requires a buyer to apply for a loan from one lender and, if the buyer does not qualify for a “reasonable” loan, the buyer satisfies her obligations under the contingency and would get the earnest money back.

Wait a sec — this would be a good post topic…

By: ARDELL

ARDELL — Wed, 15 Aug 2007 06:09:26 +0000

Russ,

It would be nice. But if it’s not part of the form, not likely it will be as well recieved by the other side. Better if the form accommodated it with one of those favored blank spaces. Seems if you fill in a blank, eveyone accepts that it belongs as part of the offer, don’t you think?

Were you around when the blank was removed? Do you know what the rationale was for removing it?