Title company is saying we owe them money. Is there anything we can do?

[MrsDrewsky]

I hope I explain this properly.

My DH and I closed on our first place on July 31st. We had negotiated that the seller would pay closing costs, which in total were just under 3% of the selling price.

During the inspection there were some issues brought up, which the seller agreed to have repaired prior to closing. During the final walk through we noticed the seller had not replaced the back door, which was part of the agreement.

Our broker asked the seller to give us $250 that we could use towards a new back door. After we closed the title company gave us a check for $250.

So now the title company is saying in total the seller paid over 3% in closing costs, and we have to refund the money. But the overage is due to the seller giving us money for the door.

I am just so frustrated. The seller was so cheap with the repairs we requested, and we're already having to pay to have those items repaired properly. I know this is probably not relevant, but during the final walk through she hadn't moved a single item. It wasn't until a few hours after closing she finally moved her boxes and furniture and we found her furniture had been hiding some things we're having to replace such as dry wall, carpet, and trim. We had an inspection, but she some of her furniture was bolted to the floor and wall, so we didn't know until after we had the keys.

Is there anything we can do? I am just so frustrated, I know $250 may not seem like much, but we were needing that money to use towards replacing the damaged carpet in my son's nursery. I just hate the idea of giving this woman another penny.

 

[Happy 2 B Me]

Most of your issues seem to be with the inspector. He/She has the responsibility to show any and all of the issues you are talking about -- all but the Door issue. If the agreed to door replacement was dealt with by the agent used to sell the home then your agent needs to take care of that issue with the Title Company. I have never heard of a Title company asking for money back after a closing. The title company should never have sent a check before closing without having the money placed in escrow prior.

Just my .02

 

[wiigirl]

Most of your issues seem to be with the inspector. He/She has the responsibility to show any and all of the issues you are talking about -- all but the Door issue. If the agreed to door replacement was dealt with by the agent used to sell the home then your agent needs to take care of that issue with the Title Company. I have never heard of a Title company asking for money back after a closing. The title company should never have sent a check before closing without having the money placed in escrow prior.

Just my .02

Agreed...in most states everything has to be settled at closing?

 

[d1gitman]

also, often times it it better to get a discount on the selling price for repairs than to have the seller fix the issues. Sadly, it is not in the interest of the seller to fix issues to the highest standard, only to fix them enough to get by.

 

[Lewisc]

I'm confused. I always thought all of the sellers items had to be removed from the house prior to the final walk through. For the benefit of anyone else reading this thread, you should have just walked away from the walk through

I'm not sure why you think you have to give the title company $250. Did you have an attorney at closing? Otherwise tell the title company the check was for the back door. You don't know, or care, if the money was to be paid by the seller or was a fee reduction by the title company.

 

[AmberHeartsDisney]

Did you get title insurance? Talk to a manager at the title company.

 

[tarak]

My guess is the title company screwed up and they're trying to get you to pay. The check should have come from the seller directly. Instead, maybe it came out of the title company's fees? I would ask your broker to handle it if you didn't have an attorney representing you at closing. The $250 doesn't constitute closing costs, but payment for repairs that weren't made. That would be my argument, at least.

I'm sorry you're dealing with a shady seller. It's not uncommon for people to try to hide problems with a house. The inspection likely would show areas where they couldn't see damage (because something prevented them from inspecting it properly). They generally disclaim any liability for problems in places where they were unable to inspect. The only way you could go after the inspection company is if they did, in fact, view those places and say they were okay.

 

[TheRustyScupper]

1) Do not pay.
2) The deal was done when the papers were signed.
3) I assumed the signing was AFTER the final walk-through.
4) If so, the title/closing company needs to eat the shortage.
5) When you-seller-closer signed the papers, the transaction was complete.

 

[Darcy03231]

1) Do not pay.
2) The deal was done when the papers were signed.
3) I assumed the signing was AFTER the final walk-through.
4) If so, the title/closing company needs to eat the shortage.
5) When you-seller-closer signed the papers, the transaction was complete.

I agree. The deal is done. I wouldn't send the title company any money.

 

[MrsDrewsky]

I just wanted to thank everyone for the replies. Hindsight is 20/20, and despite our best efforts to prepare for buying our first place it seems we put too much trust in our broker during the process.

Right now the title company is blaming the broker and the broker is blaming the title company for the error.

 

[minnierocks]

I just wanted to thank everyone for the replies. Hindsight is 20/20, and despite our best efforts to prepare for buying our first place it seems we put too much trust in our broker during the process.

Right now the title company is blaming the broker and the broker is blaming the title company for the error.

Then the two of them need to work it out and leave you out if it.

 

[ajasmom]

Title companies sell Title Insurance. So their insurance should compensate for their error. When money changed hands and the parties signed at closing, that is the end of the deal. They can not come back later asking for more money if they made a mistake they need to fix it on their own.

 

[tvguy]

Title companies sell Title Insurance. So their insurance should compensate for their error. When money changed hands and the parties signed at closing, that is the end of the deal. They can not come back later asking for more money if they made a mistake they need to fix it on their own.

Title insurance only covers the title, insuring it is clear, not any issues with the sales contract.
I'd hit up the realtor, they certainly can afford to pay $250 out of their commission.
My neighbor had issues with trash not being removed as listed in the purchase offer when he bought the house, he just told the realtor it was his problem since the realtor was supposed to make sure the contract was fulfilled. Realtor rented a dumpers and hired workers to clean the trash.

 

[donkeyandshrek]

I work for a title company/closing agent. The $250 you received should have been given to you by the seller - not the title company. Look on your settlement statement and see if they deducted 250$ from the seller. If not, that's where they made their mistake. They are $250 short because they didn't collect from their seller --- everything the title company paid should be disclosed on that HUD.

 

[Jenny3]

I work for a title company/closing agent. The $250 you received should have been given to you by the seller - not the title company. Look on your settlement statement and see if they deducted 250$ from the seller. If not, that's where they made their mistake. They are $250 short because they didn't collect from their seller --- everything the title company paid should be disclosed on that HUD.

Yes

The other issue I see is waiting until the final walk through to verify that the agreed-upon repairs were completed. I'm a Realtor; if Sellers are doing repairs on a property where I am representing Buyers, I require a receipt no less than a week prior to close. If they are doing the work themselves, I'll take my Buyers through the home to inspect it. This helps eliminate any last minute issues at the table.

 

[Bob NC]

I would just ignore anyone's requests for your money.

The closing is over.

You own the house.

Tell them if they want money they are free to sue you.

A mistake was made and people that should know better want YOU to cover their a$$es.

 

[sweetdana]

So if you did a conventional loan the allowable concessions us 3% and your loan would not be insured. There is a small change the lender will pull the funding and call the note due. Which closing on a loan with a different contract than initially approved would make it possible. If you did VA or FHA it is 4 and 6%. Meaning u could raise it and still be insured. If you did conventional and didn't pit 10% down (then 6% allowed). I'd pay it and move on.