Thursday, October 14, 2021

We Had Our Offer Accepted. Now What?

Masked bandit at the Cocoa Beach Country Club.

This is an excerpt from a post five years ago. Those who haven't been involved in a Florida real estate transaction often don't know what to expect nor who pays for what. Here's a simplification of the basics. As always, the contract spells out the exact responsibilities for the parties involved. It is entirely possible to negotiate to have the opposite party pay for an item that is not customarily paid by their side.


A real estate contract is considered executed when all parties have finished signing. After that, the next step is to send the file to the closing agent which in Florida is usually a title company or, sometimes, an attorney's office that is also a title company. The title company then does the title search, co-ordinates with the buyer's lender if a mortgage is involved, determines tax liabilities and gets an estoppel letter from the association if the property is a condo. They then pull all this together and generate a settlement statement with exact numbers in enough time for the buyers to wire their funds for arrival by day of closing and then have all parties sign their respective documents (couriered or emailed to parties who will not be attending actual closing), disburse funds after closing and record the relevant documents. It's a complicated and under-appreciated job. The majority of closers I work with are legit rock stars at the process. I often think of them when I'm in one of those closings that has run past an hour and the closer is slowly reading every document before sliding it over for signatures. I see it like paper route math. As a paper boy if I've got 100 papers to deliver and can throw four a minute from my speeding bike, I can do my route in 25 minutes. Slow my pace down by just 21 seconds per paper or stop for  a couple of short discussions with customers and that same route takes an hour. A closer who can only do one signature page per minute is going to take at least an hour to do a 60 page closing. There are stars who can do a sixty page closing in 15 minutes. You know who you are and I appreciate you more than I can express.

Title insurance rates tend to be very close among the different companies and government charges are identical but the settlement and other fees paid to the title company can vary by several hundred dollars. In my experience, the slower and less efficient the title company, the higher these additional fees. Makes sense. A closer who can only close two or three deals a day needs to charge more to make up for inefficiency.

In Florida the seller typically selects the title company since they are the ones paying (usually) for the buyer's owner's policy. If the seller doesn't have a preference, their listing agent will suggest a title company that's, hopefully, conveniently located and good at what they do. Sometimes they are neither. I wish it were different because the difference in closing agent can be the difference in whether a transaction closes on time or actually closes at all. Since the buyer has very little influence in the selection I would encourage listing agents to recommend title companies that are good at what they do and to please use one somewhat close to the property and/or principals. It is a disservice to the seller and buyer of a Cocoa Beach condo when the listing agent selects a title company in Palm Bay because it's convenient to her office. Likewise for continuing to use a company that wastes everyone's time with closings that last way too long. I'm thinking specifically about a closing last month attended by nine people that took an hour and a half for no good reason. There were times when I expected someone to poke the closer to see if she was still awake. For the record, this was at an attorney's office and not a title company. 

On that subject, listing agents, please stop insisting that the buyer's escrow deposit be held in an attorney's or title company's escrow account. By doing that you are depriving your client of the free dispute resolution offered by DBPR should that be necessary and ensuring that your client will have to waste money on an attorney to recover a rightfully withheld deposit. All parties to Florida real estate transactions are better served by having escrow deposits held in a Florida real estate broker's escrow account. A buyer's agent who offers to hold the deposit in their broker's escrow account is doing everyone involved a favor. Any listing agent who insists otherwise has either forgotten or is knowingly ignoring one of the most important parts of her required licensing education and is exposing her seller client to unnecessary risk. 

The scent of mullet has been strong at my office two blocks from the ocean every morning this week as millions of these fish stream southward in the surf on their annual migration. The dense schools are being shadowed by predators; snook, mackerel, ladyfish, bluefish, tarpon and sharks among others. It is the best time of year for surf fishing but like many years, long-period storm swells this year are making for challenging conditions. The chance of landing a legal snook makes the trouble worth it. Good luck to all the beach fisherpeople.

"“A theory may be so rich in descriptive possibilities that it can be made to fit any data.” ________Phillip Johnson-Laird