Southern Illinois operates a little bit differently than the northern part of the state. For the most part, everything north of Champaign-Urbana utilizes an attorney in residential real estate transactions. However, in everything south of the University of Illinois, attorneys are not utilized nearly as much as their Northern counterparts. What’s the reason and why do you need an attorney for real estate closings? Story time, my friends.
However, they also had a lot of unnecessary heartache and confusion whenever they signed the final settlement statement for $4,000 less than what was listed on the preliminary settlement statement.
Huey and Jerri made the hard decision to move from their family home after over twenty years. They enlisted the services of a local real estate broker and relied on them for advice and guidance through the process. In the beginning, things went fairly smoothly. There were multiple showings and after a couple of months, they finally found a buyer. However, in the week leading up to closing, the couple had some concerns.
Part of the real estate contract with the new buyer stated that Huey and Jerri would provide a seller’s credit for $4,000 for repairs; $2,000 for pool repairs and $2,000 for miscellaneous repairs. While reviewing the preliminary closing statement, Huey and Jerri were thrilled to find out that they were getting more than initially expected from the proceeds of the sale….about $4,000 more. Notice the problem here?
Huey and Jerri relied on their real estate agent in ensuring that everything was being handled by the agent’s “preferred” title agency. This ultimately proved to be problematic, due to the location of the sale and their trust in the realtor, no attorney was consulted by Huey and Jerri with regards to the closing statement. On the day of closing, Huey and Jerri had an unpleasant surprise.
The “cash to seller” section of the final settlement statement was different from what Huey and Jerri reviewed on the preliminary settlement statement…by about $4,000. Can you guess what the problem was? *insert Final Jeopardy music here*
The title agency responsible for formulating the settlement statement COMPLETELY missed the seller’s credit to the tune of $4,000. Not only was this missed by the title agency, it was also missed by the listing agent retained by Huey and Jerri. Now, were Huey and Jerri out any more money than they agreed to? Not really, because they agreed to the seller’s credit in their real estate purchase agreement.
However, they also had a lot of unnecessary heartache and confusion whenever they signed the final settlement statement for $4,000 less than what was listed on the preliminary settlement statement. They relied on the services of their real estate agent and title agency responsible for handling the closing.
The benefits usually outweigh the costs of consulting with an attorney to review these documents.
Would the mistake have been caught by an attorney? There is no guarantee, but a practicing real estate professional should have caught the mistake on the preliminary closing statement and relayed the missing item to the parties prior to the scheduled closing time. Instead, the parties are at the table to sign all of the required documents and changes are being made at the eleventh hour.
It does not take much time for an attorney to review all of the required documents associated with a real estate transaction. Therefore, the benefits usually outweigh the costs of consulting with an attorney to review these documents. What can you learn from Huey and Terri’s story?
First, make sure that you retain the services of a competent real estate agent. Second, if you’re the seller, in most cases you have the choice of the title company that handles the closing. Do some research! Most people automatically default to the agent’s preferred title company, which is fine, but before anything is signed and agreed to, do a quick Google search on the title agency to see if there are any reviews. It could save you headaches down the road when closing day arrives.