Lastly, don't sandbag a fellow Trulian if you've got the answer! And lastly, lastly, I agree with you!!
Knowing nothing about the particular property your client was after, it is difficult to pass much judgement one way or the other. I can tell you though that not all of the Sacramento market is suffering in the same way. Sacramento is full of micro-markets, each with its own different market trends. Perhaps the property in questions was priced correctly and your client was not the only interested party? Perhaps the property was in an area less affected by the market downturn in Sacramento, where there is more buyer / seller equilibrium in supply and demand?
I have represented several buyers in the Sacramento area this year where there have been multiple offers on the table (including one just last week) from other interested parties. Depending on the seller's strategies, the seller could very well have an upper hand. Not to make any assumptions Juan, but perhaps being an agent from the Modesto area (about 80 miles from Sacramento), you are not familiar enough with the micro-markets here? I would not know the first thing about your market if a buyer asked me to represent them in Modesto. Food for thought. Cheers!
AAR General Counsel -
HUD has indicated that it â€œwill not enforce
Section 9 of RESPA against a seller who selects the
title insurance company if the seller is paying for the
owner's title insurance policy, and does not require
the buyer to use the title insurance company for the
simultaneously issued lender's policy.â€
the link to her article is below.
On the other hand plaintiffs attorneys are perfectly capable of filing lawsuits even if HUD is reluctant to enforce the furthest edges of a weirdly written law.
Individuals have one (1) year to bring a private law suit to enforce violations of Section 8 or 9.
. Lawsuits for violations of Section 6, 8, or 9 may be brought in any federal district court in the district in which the property is located or where the violation is alleged to have occurred.
HUD, a State Attorney General or State insurance commissioner may bring an injunctive action to enforce violations of Section 6, 8 or 9 of RESPA within three (3) years.
Juan you may not like my answer very much but if the deal was lost both sides are to blame. If the seller was paying the closing cost for the buyer than they should have been able to choose. If the argument was that fierce over a title company and escrow company than perhaps both sides were fighting a battle of who was going to win. Our egos can get the best of us. Did it really matter what company was used? Yes, we want to support our vendors but not to the point of losing the deal for our clients. It sounds like EGO cost you a closing and your buyer a home they liked. Sometimes the bigger and better person lets the other person be a winner every now and again... that makes you the bigger winner in the end.
I think that agents need to be very careful with the questions asked or statements made on Trulia for many reasons. I do not believe this is the place to "shout" your frustrations over a deal. In my opinion, it is unprofessional behaviour that makes our industry look bad to the buyers and sellers who are on Trulia to get advice. We all understand that most of the country is experiencing a buyers market...some areas more than others. This is a fabulous market for buyers; however, I think we would all be insensitive not to have compassion for the sellers and to understand that this is a painful market for them emotionally and financially. Sometimes agent/owners are the worst for reasons JIm explained earlier. We are already putting the knife in the back and giving it a slight twist with the contracts we are presenting... the contracts that reflect today's prices coupled with the knowledge that the market is going to take time to recover. This is the last place we want to twist the knife even further with our words.
Juan... an agent/ owner cussing at you is inappropriate and unprofessional. It could be that they are in a financial mess so the emotions have the best of them or it could just be ego. Whatever the case, I am sure that they are aware of the market. Could be that like many sellers... they believe their home is the best home on the market compared to all other homes and they will get another buyer.
Thanks for quoting a section from the CA contract... I am in Georgia. It is all negotiable here!
IN CALIFORNIA IT IS THE BUYERS CHOICE.....TITLE COMPANIES
SEC. 9. (a) No seller of property that will be purchased with the assistance of a federally related mortgage loan shall require directly or indirectly, as a condition to selling the property, that title insurance covering the property be purchased by the buyer from any particular title company.
(b) Any seller who violates the provisions of subsection (a) shall be liable to the buyer in an amount equal to three times all charges made for such title insurance.
[Codified to 12 U.S.C. 2608]
[Source: Section 9 of the Act of December 22, 1974 (Pub. L. No. 93--533; 88 Stat. 1728), effective June 20, 1975]
AND SINCE WE ARE IN A DECLINING MARKET THE ONLY ONE WHO TRULY LOST WAS THE LISTING AGENT/BROKER/PROPERTY OWNER WHO WERE ALL THE SAME PERSON....HE CUSSED ME OUT SAYING IT WAS HIS CHOICE...I SIMPLY HUNG UP ON HIM AND WAS IN CONTRACT ON ANOTHER HOUSE AT A BETTER PRICE AND A HAPPIER CLIENT WITH IN A 3 DAYS....SO ALL WAS SAYING IS I KNOW THE MARKET IS TOUGH ALREADY LETS NOT MAKE IT AN EGO MATCH. LETS ALL USE THE K.I.S.S. PRINCIPLE
It has been said that the best deal is struck with both parties would have settled for a better price, but they will accept the amount agreed.
It seems that if a transaction fell apart based on only title and escrow, the agents involved need to practice their negotiating skills a little. Usually if both parties are negotiating in good faith something suitable agreement can be negotiated wih both parties so they both win. In this case...they both lost.
In the example you gave, where the seller was also the listing Realtor, he left himself somewhat unrepresented. That is, he did not have an arms length agent to advise him to put his own best interests ahead of his special demand ot dictate the choice of escrow and title company.
Or perhaps he was acting in his own best interests. He lost the deal ? Maybe he only lost YOUR deal.
The owner - agent still has the listing of his own house and can sell it to someone else. Maybe for more money, maybe the escrow issue was a stalling tactic so that he could encourage a higher offer from another competing buyer while holding your buyers offer out as bait to a competing buyer.
Have you thought of that?
You have taken a single failed deal with one other agent involved to represent Realtors in the plural.
That was a mistake. Almost all Realtors realize that the Central Valley of Sacramento is in a "Buyers" Market. You found one (maybe) exception to that rule and publicized it here on Trulia. Wrongo.
As for your question that it is not even the sellers choice, it is the buyers choice? The answer is NO.
The choice is "negotiated" between buyer and seller. Neither one can choose the escrow and title providers without the consent of the other principal.
Either seller or buyer may be the first to suggest an escrow company. Often the MLS listing remarks will state " escrow already opened at XYZ escrow company" If there is no mention in the MLS then perhaps the buyer is the first to suggest a particular company when they write the offer.
In a third of a century of lending and real estate, I have never lost a deal for the reason you cite. So I kind of think it might be a rarity. - even if that hadn't killed the deal, probably something else would have. Why did your buyer refuse to accept the sellers choice of escrow provider? ...since it is usually not enough of a matter of dissension to kill a deal?
What is standard & norm can be different in all areas. But how I see it, is the client that is paying for the title & escrow should have the choice, so if the seller is paying all of title & escrow, they should be able to choose the company. Especially if they are an agent, since they might get some type of discount from their title/escrow company of choice. Now if your buyer was paying for all of title/escrow then they too should have the choice. That is very logical. You might be talking about a different issue such as 50/50, then it is all part of the negotiation.
I say that if you can't work it out with that seller, find another home. If your buyer really loves that home and doesn't want another one, find out what that title company's fees are beforehand, and if they are normal, go for it. I wouldn't let that stand in the way of the sale.
Did you read Section 9? It says if the buyer is to pay for the title insurance then they have the right to chose. If the seller is paying for it then the buyer does not have a right to chose. And on top of this all, you have to offer a fiduciary duty to your client, If you are causing issues with your clients purchase a home and you cause the deal to fall apart because your client is having the sell pay for title, then I think you owe your commission to the buyer as a credit for their closing costs. If you cause a deal to fall through because of your opinion then you are breaking the fiduciary duty to your client! And further more title and escrow are 2 different things. Escrow is fully negotiable, whereas title is the issue stated in section 9. Both can be held at the same company but they also can be done at different companies!
it appears that section 9 is a law that is violated as often as the 55 MPH speed limit on the interestate.