In an effort to keep Hampton Roads Realtors®, agents, brokers and lenders up to date on title and closing issues, Reliant Title is now publishing a bi-weekly email we thought you might be interested in.
Clarification of Settlement Agent’s Role — The Seller insists that we use their attorney/ title agent for settlement. What does that mean?
Paragraph 7 of the standard REIN contract, Settlement/Possession, reads "Settlement agent and place of settlement to be selected by __ seller/ __ buyer." This sentence is quite often misconstrued to mean that should the seller have the preference in the selection of the settlement agent, the buyer must also "use"/ be represented by the sellers attorney/ settlement agent for the closing. This most certainly is not the case. Allowing the seller to select the settlement agent merely means that the preparation of the settlement statement (HUD-1), recordation of document(s), and the disbursement of funds is the responsibility of the seller’s representative. The buyer is still free to engage their preferred title company or attorney for their side of the transaction. Furthermore, the buyer is not required to purchase the title insurance from the settlement agent.
By allowing the seller to select the settlement agent, they are appointing their closing agent the responsibility for:
- making mathematical calculations involving the proration of taxes, insurance, rent, interest and the like in accordance with the contract or local custom;
- completing form documents selected by and in accordance with the instructions of the parties to the transaction, but not drafting or selecting such documents;
- obtaining lien waivers from mechanics or materialmen in a form acceptable to the parties in interest, but not drafting such waivers or giving advice as to the legal sufficiency thereof;
- preparing settlement statements, such as the HUD-1;
- receiving and disbursing settlement funds;
- drafting receipts and certificates of satisfaction, but not deeds, deeds of trust, deed of trust notes, or deeds of release;
Please call us at 493-7600 if you have any questions.
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