It is understandable that a home buyer or seller would try to save money on their transaction wherever possible. But it is also possible to be “penny wise and pound foolish”.
For most people, buying or selling a home is the most financially significant dealing that they will experience. It may be unwise to try to save a couple of hundred dollars in legal fees on a transaction involving hundreds of thousands of dollars. Remember the old adage: “You only get what you pay for”.
I recently represented a couple on a short sale of their home. It took many months for their lender to agree to the terms of sale, and a deadline for closing title was set by that lender. My clients did everything that they needed to do in preparation and were ready to move out. They were excited to be receiving some funds from this sale and starting the next chapter of their lives.
Unfortunately, when we received the title commitment from the buyer’s attorney before closing, we found that there still was existing on the public records, a mortgage and a judgment from my clients’ seller. This was not a matter of timing as my clients had purchased their home more than 10 years before. Clearly, the lawyer who represented my clients when they bought the home had dropped the ball in not clearing these liens at the time of their purchase closing.
We were now in a scramble to try to resolve these prior liens by the deadline imposed by the short sale lender. I asked the sellers to provide me with a copy of their title insurance policy, which would likely be accepted by their buyer’s title company to allow the closing to take place. However, they did not have it, and it appears that their former attorney did not provide it to them. They contacted this lawyer for a copy and he did not have it in his records.
At this point in the story, you need to know that back at the time of my clients’ purchase closing, the sellers’ former attorney was advertising every week in the newspaper that he was charging buyers $595.00 for representing them in a closing. This was about $200 less than the going rate charged by other real estate closing attorneys in our area.
Eventually, my clients learned that a particular title company had been used almost exclusively by their former lawyer at the time of their purchase closing, and they were able to obtain a copy of their title policy from that company just before the short sale closing deadline.
It was evident to me based on my experience that the title company had withheld the title policy from my clients because their lawyer had not cleared the title. Imagine finding out ten years after you closed title that your seller’s mortgage was still on your title. And most important, although it was his error, my clients never heard directly from their former attorney. When you contract for a “discount attorney”, you may never speak to him until the closing, since he can only justify having you speak to his office staff when he charges so little for a real estate closing, and is handling such a high volume of real estate transactions.
Through our efforts, all’s well that ends well, but remember: “You only get what you pay for”. You are much better off selecting an experienced and dedicated attorney to represent you.