escrow/closing/title company and offer questions

[DaveNan]

I am in a different state, but it sure seems shady to me. I was just in a realtors office earlier tonight watching my DD put in an offer on her first home. One of the forms the realtor had my daughter sign was a standard form stating that the agency had a financial interest in a mortgage company and a title company. She had not been steered towards either, and was not using them, but every person making an offer had to be informed and acknowledge that fact. My guess is they had historical conflict of interest issues.

To not inform you of the conflict of interest and then "screen" offers, is a clearly shady. If it is legal- that is based on the state laws and I can't answer that. But your trust has clearly been violated.

How good/difficult to find the deal is, including the excessive closing costs, should drive your decision to ride it out or not.

Good luck

 

[CarolMN]

http://www.leg.state.fl.us/Statutes...ute&URL=0400-0499/0475/Sections/0475.278.html

475.278 Authorized brokerage relationships; presumption of transaction brokerage; required disclosures.—

(2) TRANSACTION BROKER RELATIONSHIP.—A transaction broker provides a limited form of representation to a buyer, a seller, or both in a real estate transaction but does not represent either in a fiduciary capacity or as a single agent. The duties of the real estate licensee in this limited form of representation include the following:
(a) Dealing honestly and fairly;
(b) Accounting for all funds;
(c) Using skill, care, and diligence in the transaction;
(d) Disclosing all known facts that materially affect the value of residential real property and are not readily observable to the buyer;
(e) Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing;

While most timeshare sales agents are licensed as transnational, some still choose the more "traditional" licensure and thus legally may have a fiduciary/single agent relationship with the seller.. It's possible that the company the OP is working with has that type of license.

OP - IMO, it's not worth it to fight this. I'd walk away and at most, file a complaint with the appropriate Florida regulatory agency. Sorry you ran into this situation - the next one should be better. Good luck!

 

[CMNJ]

Unless the law has changed the buyer absolutely has the right in Florida to choose the title company. We had an issue with the timeshare store (http://dvc-resales.com/) in a similar situation. We were in the process of bidding on a contract when we discovered it was an Australian owner (they used to not include that info in their listings). In doing our research we discovered about the tax withholding requirements for a foreign seller and the need to supply our SS# to complete them. We wanted to use a different company (who was used at the time by several other brokers) as we felt more comfortable with them concerning the potential tax liability. The timeshare store said no that the title company could not be changed. We asserted that we had learned it was our right as the buyer to choose but they said that we either sign the contract with their designated title company or the seller would cancel the sale. That was the end of that contract for us.

 

[mustinjourney]

You seem to be mixing up posts. In one area, I said an agent has no incentive to present a new offer in which the only change is the agent / title co earn less money by cutting their rep out of the deal when another offer is already there. That is not reasonable to expect.

Not sure how I mixed up posts. I took one quote from one post...that's it.


My whole point is I don't give a damn what is the incentive for the agent. It is completely immaterial. They have a duty...and that is to sell the property. It's very simple. They're choosing to ignore their duty. The fact that their incentive is reduced does not matter at all. That's my entire point.

On the other hand, I said that requesting to use your own title co is perfectly reasonable to do, if you do it up front instead of after you've agreed to use theirs. It all comes down to what you agreed to.

the agreement is between the buyer and seller. Not the buyer and the agent. the agent should have no other fiduciary interests in the sale other than making the sale. Double dipping on the title company is improper if it is NOT DISCLOSED UP FRONT. This is not that complicated.
[/quote]

True. But this is the case of being an armchair lawyer or whatever.

I'm not being an armchair lawyer. I am an attorney. The law is the law.

If you want to argue whether the law is worth enforcing...that is a different argument altogether.

OP asked about what his legal rights are. That is what I responded to. His rights are quite simple. The agent misrepresented all kinds of things. The agent is LEGALLY bound to report all offers to the seller. the agent is supposed to disclose his fiduciary interest in the closing company. The agent is legally required to allow the buyer to choose his own closing company.

How this gets enforced is a completely different discussion...and is not what the OP asked.

 

[MrInfinity]

I am an attorney. The law is the law.

You're suggesting legal grounds for something which is not going to go there. As already stated, if the buyer is not happy with the offer, and he has not paid a deposit, then he can walk. Done. If he has paid a deposit, then that complicates things since an aggressive company, however little entitled to your deposit money, can try to get it, or at least make it exhausting to get back. If the buyer wants the contract, then he should just move forward on his already signed offer.

That is what I responded to.

Technically you responded to me, never to the OP. "You are dead wrong here" or whatever you said.

The agent misrepresented all kinds of things.

Dang! This is awful to say without all the facts. Do you not get the info before making such declarations? What did this agent disclose? Did the buyer ask about the title company? Did the buyer ask about the closing costs? Did the buyer unknowingly agree to use this title company? You're throwing this company under the bus and we know so little. I think you're going down a bad path here slandering this company without all the information. Maybe they are awful, maybe they are not. But to this point, we have only info from one person on the internet who has since left the conversation. We haven't seen the offer, we haven't gotten details, so I'm not going to bad-mouth a company. Moving on. Hopefully the OP comes back and shares what happens.

 

[TinyTGO]

Wow... so an update here and maybe some clarification...

- I never signed a purchase agreement. Had I, I would canceled within my 10 day window which is very easy and can not be contracted around or prevented regardless of "skill level" or more accurately ethical disposition. I agreed to price of the contract and closing costs over the phone. That does not give the seller's unethical agent the right to put any number in he chooses.

- If the seller is paying the closing costs, then he can stipulate who he/she uses. If the buyer is paying, buyer has the right. This can not be contracted around. It can be manipulated if the seller is paying a portion of the closing costs.

- I would like to send a complaint to the regulating agency that cares about the unethical practices of this agent. Would love some incite here as to how. I was thinking about just copying and pasting the entire email chain. I don't think anything will come of it as I did not sign a contract and force the issue of choosing my own title company, but at least there will an official inquiry... at least there would be in Chicago... and maybe that would be enough to at least set him straight for the next person. I mean he said with all the words that he did represent my offer with the seller, that I am not allowed to use my own title company, that I'm not allowed to choose my own escrow or closing company, and that paying a fictitious resort transfer fee (not the admin or the doc fee) were compulsory. I'm not a lawyer, but I think there is something wrong with making up fees and representing them as third party fees

- He also did not disclose their financial interests in the title company... again i'm not a lawyer, but in my industry (securities) you go to jail for that.

In the end, I decided that I would not go through with the deal, but not before I got a whole chain of incriminating emails. Then he had the gall to call me back 2 days later with a different "deal." I told him that if it entails me paying closing then I want to choose my own company, and if that's a problem for them then to stop calling me.

 

[Dean]

As far as presenting the offer, in Florida they are legally required to do so unless they have a written stipulation from the seller otherwise. My understanding is the buyer has the technical right to select the title company but in reality this doesn't normally work out that way unless it is a company that the broker normally works with anyway. Some work with more than one. There are legal issues and they were practical issues here. Trying to fit a square peg in a round hole is it not work very well.

 

[Orsino]

When I bought resale earlier this year, I expressed concerns to the broker about the Title Company they suggested (The Title Company was not taking my concerns about how we would hold Title seriously). The broker immediately offered alternatives and said we could use one of those or anyone else we wanted -- no push-back whatsoever.

Also, both the buyer and seller have to agree on the Title Company insofar as either could refuse to sign the contract if the selected company is not acceptable. When I switched, the buyers had to agree. They of course didn't care, but they had to agree.