 | Clearing The ConfusionOccasionally, a party to one of our transactions will call and ask me, “who do you guys actually represent in this deal?” There is some understandable confusion as to whom we, as a title company, represent in a transaction. Is it whomever orders the title? Is it the Buyer? Seller? Lender? The answer is… |
Yes to all, and No to all
Huh?!?!
Yes, we represent all parties. No, we do not represent any party exclusively.
Let me explain: there are multiple “agents” involved in any given real estate deal. In a residential deal, it’s usually real estate agents. In a commercial deal, it’s usually commercial brokers and attorneys. And, in fact, each of these agents will each represent one side or the other. There’s an attorney and/or agent for the Buyer. There’s an attorney and/or agent for the Seller. There’s even an attorney for the Lender.
Regardless of who “sends” or “orders” or “transmits” the title order to us, this does not change the relationship of the title company to the parties. The title company does not represent one party or another exclusively. We leave that to the agents, brokers and/or attorneys. The title company actually works for everyone involved in the deal - we work for the “contract.”
What does "working for the contract" mean?
It means the title company must act as a neutral third party - an umpire or referee, if you will - to insure all aspects of the contract of sale and lender instructions are being complied with. The title company does not favor one party or the other like an attorney or broker represents a client.
For the buyer, the title company is responsible for clearing title, transferring clear ownership of the property and issuing title insurance. For the seller, the title company is responsible for paying off and clearing existing liens on the property. For the lender, the title company is responsible for recording the new mortgage and following the lender’s closing instructions. And, for all parties, the title company is responsible for disbursing the proceeds from the settlement according to the terms of the contract.
Because of this special relationship with all the parties, you will often hear one of our settlement agents, when asked a question that could be perceived as favoring one side or the other, say, “I can’t advise you on that.” Is this because we don’t know the answer or that we’re trying to be mean? No, it’s just to make sure there’s no appearance of conflict or favoritism or representation of one party over the other.
One final point. I have represented a buyer or seller in negotiating a real estate contract and have been told by the opposing agent or attorney that my title company cannot handle the title work because it would be a “conflict of interest.” This is mistaken. Attorneys very often represent a client on either side of a deal and have a financial interest in the title company conducting the settlement. This does not change or lessen the fiduciary obligations of the title company to all the parties of a transaction. I continue working for my client during the deal, and the title company continues working for the contract.
Jeff Shiller, Esq.
Yes, we represent all parties. No, we do not represent any party exclusively.
Let me explain: there are multiple “agents” involved in any given real estate deal. In a residential deal, it’s usually real estate agents. In a commercial deal, it’s usually commercial brokers and attorneys. And, in fact, each of these agents will each represent one side or the other. There’s an attorney and/or agent for the Buyer. There’s an attorney and/or agent for the Seller. There’s even an attorney for the Lender.
Regardless of who “sends” or “orders” or “transmits” the title order to us, this does not change the relationship of the title company to the parties. The title company does not represent one party or another exclusively. We leave that to the agents, brokers and/or attorneys. The title company actually works for everyone involved in the deal - we work for the “contract.”
What does "working for the contract" mean?
It means the title company must act as a neutral third party - an umpire or referee, if you will - to insure all aspects of the contract of sale and lender instructions are being complied with. The title company does not favor one party or the other like an attorney or broker represents a client.
For the buyer, the title company is responsible for clearing title, transferring clear ownership of the property and issuing title insurance. For the seller, the title company is responsible for paying off and clearing existing liens on the property. For the lender, the title company is responsible for recording the new mortgage and following the lender’s closing instructions. And, for all parties, the title company is responsible for disbursing the proceeds from the settlement according to the terms of the contract.
Because of this special relationship with all the parties, you will often hear one of our settlement agents, when asked a question that could be perceived as favoring one side or the other, say, “I can’t advise you on that.” Is this because we don’t know the answer or that we’re trying to be mean? No, it’s just to make sure there’s no appearance of conflict or favoritism or representation of one party over the other.
One final point. I have represented a buyer or seller in negotiating a real estate contract and have been told by the opposing agent or attorney that my title company cannot handle the title work because it would be a “conflict of interest.” This is mistaken. Attorneys very often represent a client on either side of a deal and have a financial interest in the title company conducting the settlement. This does not change or lessen the fiduciary obligations of the title company to all the parties of a transaction. I continue working for my client during the deal, and the title company continues working for the contract.
Jeff Shiller, Esq.