“Cause the good ole days weren’t always good…and tomorrow ain’t as bad as it seems.” Billy Joel Keeping the Faith
Believe it or not…this is a post about Title Companies and Escrow Services and…my ever favorite topic: Homebuyer’s Rights. It’s a plea, really. A humble request for help from someone, or many someone’s, in authority.
In “The Good Old Days”, an agent ordered “Preliminary Title” AND “pre-opened” escrow, when they listed a property for sale. To encourage this practice, Title Companies offered the seller a discount for pre-ordering escrow so that the Title Company was guaranteed not only the Title Insurance business and money, but the right to be the Escrow Closing agent and earn that money in addition to the Title Insurance premium. A good business practice, I guess, and reasonably appropriate back when every agent represented sellers of homes and never buyers of homes.
You know…”the Good Old Days…(that) weren’t always so good”, when buyers were represented by no one, had no rights, and the Rule of the Day was Caveat Emptor.
In the present day in the here and now, meaning “The Seattle Area”, our basic Real Estate Contract has a provision for choosing Title Insurance Company that does not refer to anyone’s choice. Just a blank place for the writer of the contract (usually the agent for the Buyer – since buyers write and make the offer on this contract) to enter the name of the “Title Insurance Company”.
Then there is another line after it that says “a qualified closing agent of buyer’s choice:”
There are still some real estate agents, with the encouragements of added benefits to do so from Title Companies, who are PRE-ORDERING ESCROW before the buyer of the home is a known entity. Who CHOOSE the “qualified closing agent of buyer’s choice” in advance of the buyer being a known entity. Please stop that. And Title Companies…please, please stop offering seller’s agents and sellers “bribes” to encourage this practice of “pre-ordering” escrow in advance of the buyer being a known entity.
I agree that the owner/seller should choose Title Insurance Company, because the seller has to procure and pay for an Owner’s Title Insurance Policy and give it to the buyer in this area, as part of the means of conveying clear title to the buyer of their home/property.
And…it’s quite OK to “suggest” that escrow be X in the Agent remarks section. But to OUTRIGHT DEMAND THAT ESCROW MUST BE SELLER’S CHOICE instead of the obvious contract intent of “buyer’s choice of escrow”…well, frankly, it’s an antiquated and totally inappropriate activity in this day and age.
I know that Rome wasn’t built in a day and change takes time…but I urge you to at least move in the right direction so that tomorrow can, and will, be a better time.
Until then…I’m gonna Keep the Faith.