Title Tips

 

Split Closings

 

With the new Real Estate Purchase Contract allowing the buyer, if desired, to select his/her own title company, we are seeing more and more “split closings”.  The following are some frequently asked questions relating to “split closings”.

 

 

Can the buyer and seller close at different title companies?

 

Under the new REPC, the seller can only direct the seller’s portion of the closing.  The buyer may elect to close at the same title company or at the title company of his/her choice.

 

Does a split closing cost the buyer and/or seller more in closing costs?

 

The closing costs should be the same whether or not the buyers and sellers close together.  There may be an additional wire fee; however the title company should not pass this on to the client.

 

Does the split closing take any longer than a conventional closing?

 

The split closing may take up to one day longer with the coordination of documents and the additional transfer of money.

 

What are the logistics of a split closing?

 

The listing and selling agents order title reports from their respective title companies.

As per the seller disclosure in the REPC, the seller (seller’s title company) must provide a copy of the title report to the buyer (a split closing does not relieve him/her of his/her obligation to do so).

The buyer (buyer’s title company) provides a copy of the title report to the lender if applicable.

Seller’s title company resolves any seller related title defects.

Buyer’s title company resolves any buyer related issues (judgments etc.).

Buyers and Sellers sign their respective documents at their title company.

Funding comes from the mortgage company to the buyer’s title company.

Buyer’s title company usually records the documents.

Buyer’s title company wires to the seller’s title company funds sufficient to pay seller’s costs and proceeds.

  

What advantages do the buyer/buyer’s agent have in selecting the title company?

 

The agent has more control over the transaction with his/her title company doing the closing.

The system of the title company and the escrow officer is familiar to the agent, thus providing a consistency.

 

What are the disadvantages?

                                        

The coordination between the two title companies may cause the closing process to take a little longer.

 

What can I as a REALTOR do to better facilitate a split closing?

 

Giving the title company as much information as possible regarding the mortgage company, the other title company, time constraints, etc. will make the closing proceed in an orderly, professional manner.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The contents contained herein are intended for general informational purposes only, and should not be construed or relied upon as legal advice or legal opinion on any specific facts or circumstances.  Anyone needing specific legal advice should consult an attorney.