Whom Does The Closing Agent Protect?

Anyone who has ever gone through a busy intersection when the power was down knows what a traffic cop does. Cars come from every direction, all of them in a hurry, all of them important, all of them scurrying somewhere. An efficient, clear, methodical police officer is like someone placed an angel at that intersection.

A closing agent in real estate is that, and more. Every realtor is in a hurry to fulfill his or her function as a transaction broker. That means they get there first with the offer, get out first with signatures, and get on down the road to do another deal. As you know, the good ones also provide lots of other services, and they watch over the closing agent to make sure there are no mistakes. But they do get the signatures and they do get on down the road with the deal, even as they provide whatever services they feel are their responsibility. The detail of a closing is left to the closing agent.

For those who don’t know how much detail is involved, realize that a simple closing will involve 25-30 pages of information. Each page is probably a contact to some outside source for information. Surveys, mortgage pay-offs, mortgage commitments for new loans, title searches, confirmation of cash balances, and cash transfers are just a few of the concerns that keep your closing agent awake at night wondering whether or not everything got done. And they can’t just do it, they have to document everything for that random exam (in the form of questions asked after closing, complaints about the closing, or even lawsuits) that will surely come to one or more of those files some day in the future.

At every closing, literally dozens of questions are answered. Since those questions are normally answered in the documents, the questions aren’t usually verbalized. But someone has dealt with those questions and answered them. The realtor, the seller, the buyer, the mortgage broker, and the closing agent all have a forever exposure to being sued if those papers are not put together properly. I have never seen a lawsuit arising out of a closing that involved a claim against only one of the players at the closing. If a lawsuit involves an allegation that something was done improperly, it is unlikely that only the actual parties to the transaction will be the parties to the lawsuit.

It is the legal responsibility of the closing agent to perform every requirement of a contract. Every service and every person who touches a transaction from the surveyor to the closing agent, and even including the Clerk’s Office, has legal responsibilities that can impact the transaction. The closing agent must bring them all together in one final package, and by closing the deal, certifies that the contract has been performed.

A good closing agent is just like the traffic cop; everyone will get clear signals sufficiently ahead of time to react. The traffic cop will seem demanding and he will insist that you stay in line and keep moving. But he will also save your life, perhaps literally.

Your closing agent will set rules that you may not understand. Those rules involve times for decisions or delivery of documents, methods of transfer of funds, or how to sign. Nevertheless, a careful, methodical closing agent is your best friend.

I started this by asking whom the agent protects. The answer, regardless of who you are in a real estate transaction, is you.

If you have a good closing agent, don’t bid down his services and then boast to the client that you’ve gotten the lowest possible price for closing. Boast to the client that you have the best possible closing agent and that the price is fair considering the person whom that closing agent will protect.