Certified Funds at Closing

I am often asked why certified funds are necessary for closing. We do take personal checks up to a certain amount, but any large amount must be a certified check or wire transfer so that there is certainty that the funds are "good". In other words, a personal check can be written even though funds are not actually in the account, but certified checks and wire transfers are only made if actual funds are in the bank's possession before creating that check or sending the wire. Each title company has a different threshold for what they will accept in personal funds, based on how stringently or carefully they oversee their escrow accounts. So though it may be inconvenient to work with a title company that has a lower threshold, all it does is tell you how careful they are with their escrow accounts. 

I wish you all a safe and warm holiday!

Happy Holidays!

Happy Holidays from all of us at Ritz Homes Realty!

Erroneous or fraudulent charges paid at closing

I read an article recently about Maryland consumers who were going to be reimbursed for overpayment of recordation taxes, in some cases from a closing that occurred more than 5 years ago. It stems from a complaint that was filed by one consumer against the title company in question (one that runs their business out of Pennsylvania), which launched an investigation on the company by the Maryland Insurance Administration. 

The article does not go into whether these overpayments were fraudulently charged or if they were just miscalculations, but in any case, any overpayment would have been quickly realized once the consumer's loan documents and/or deed was sent in for recordation, as the treasury and land records offices in Maryland usually have policies in place in which they will reject a document for recording if the check is over by more than a very small amount (typically around $10.00). So my only assumption is that the amounts collected by the title company were deliberately overcharged and paid over to themselves.

There are ways to double-check the taxes that are being charged at a closing - for starters, you can call the county directly and see if they will assist you over the phone with calculating the various taxes. Or alternatively, ask them for the rates so that you can calculate them yourself. 

But really what this all boils down to is the importance of finding a title company not only with a stellar reputation, but one in which you yourself trust. Core Title Group will certainly not play with your money. For starters, I would never allow my company or my bar license to be put on the line for a few extra bucks. We have never had a claim against us, nor have we ever been "dropped" by an underwriter. I hope that speaks to you about how we do business. As hard as it may seem in this day and age, it is still possible to find honest people out there. 

As always, have a warm and safe weekend everyone!

Seller financing

Seller financing does not occur very often, as it is usually only an option under very specific circumstances. For starters, the seller must either have no open mortgage on the property, or one that can be readily paid-off at closing. Traditionally, it's the buyer's financing that supplies the funds necessary to pay off a mortgage. With seller financing, there is typically only the buyer's down payment available at closing. 

But when there is no open mortgage to worry about, then seller financing can certainly be a very viable option. The seller of course wouldn't benefit from an immediate payoff, but the seller would ultimately walk away with significantly more because of the interest that would be collected on the seller financing. Benefits for a buyer would be the lack of lender closing fees (i.e. origination charges, application and underwriting fees), or for buyers without the ability to obtain traditional financing - they would be able to get just that, from the seller. 

Seller financing is not for everyone, which is why it doesn't happen very often. But when the pieces fit, and the need is there, seller financing can be a lifeline for a sale to go through.