Settlements Gone Awry

Settlements Gone Awry

My favorite quote during the years I was a Settlement Agent was “It’s Real Estate, not Brain Surgery – No one is going to die!” As settlement providers, we often experience chaos on an everyday basis. There are so many components that make up a real estate transaction, not to mention the number of people who are involved. As a purchase or refinance transaction progresses, many different things can occur from contract ratification or loan application to settlement and closing. Everything from title clearing issues, personality conflicts, buyer and seller disagreements over repairs to last minute walk through nightmares. It goes without saying that as real estate settlement professionals, we are more often than not, problem solvers, hand holders and all around peace makers. We often handle the daily aspects of chaos with a calm concise frame of mind and extreme professionalism. So what do we do when we experience that unusual transaction or a scenario we have never encountered? As the world changes, we encounter so many new things it is almost impossible to be completely prepared. It is for that reason, I felt it best to point out a few things that might assist or prepare settlement agents in their daily transactional processes.

In today’s society we must be aware of regulatory and law changes that affect our daily business practices. For instance heterosexual marriage, same gender marriage, gender transition and divorce. What do all of these things have in common? Name Change! It has always been common place for women at marriage to take their husband’s last name, as well as to retake their maiden name after they are divorced. The important thing to focus on here is that the word “marriage” has the same formal definition regardless of the type of couple. While name change orders with regard to individuals are filed in the land records for various reasons, often times they are not. After a marriage and/or divorce name change orders are not required to be formally filed in the circuit court land records. That being said, it is important to ask your customer, whether you are assisting a buyer or a seller, if they have ever been know by any other name. In doing so, you are covering all of your bases in an effort that any and all names a customer has been known by can be properly run in all of the proper indices during your title examination. This will help eliminate potential liens or other issues that would have not ordinarily been discovered.

Another matter to point out is the importance of identifying the type of transaction you are handling. Is it a purchase? If so, what type? Is there a lender? Is it an all cash transaction? Is it a refinance? Has the property been refinanced by its owner previously? All of these questions will bring more depth and focus to the transaction at hand. By bringing identified focus, we are able to ask additional questions and eliminate potential issues that may arise at closing or prior to settlement. An example in particular is an all cash transaction whereby the buyer is a member of an Amish community. Would you know what to do in this scenario? Would you know what important questions would need to be asked to ensure a smooth closing? What if your transaction is a short sale or a foreclosure? Are you aware of the special circumstances that surround these types of transactions? Would you know what types of documentation is necessary to close these types of transactions? What if your buyer or seller is not an American Citizen? Do you know what the rules are with regard to those individuals? The point here is to take the time to make sure you understand the type of transaction you are going to close and what special circumstances may or may not need to be address during the closing process.

It goes without saying, that Title and Settlement Professionals are faced with very stressful and sometimes chaotic days. But remember, by taking the time to identify the special needs of each transaction, we make certain that the settlements we handle and the title policies we issue are in the best interest and protection of each person we have been asked to assist during the closing process. It will also reduce stress and the need to say “IT’S REAL ESTATE, NOT BRAIN SURGERY – NO ONE IS GOING TO DIE!”

Written By:

Stephanie Campbell | Southern Virginia Agency Manager