What is One Thing in Life That Should Not Be Quick?

D. MICHAEL CHESSERThere are countless answers to that question. Golfers would say the answer’s easy - it’s a golf swing. There are other answers. But, Buddy Cook, owner of First National Land Title, knows the real answer. Buddy had his 76th birthday last week, and we should all take comfort in the fact that real estate closing agents can do their jobs for a long time, with honesty and integrity, and still have a life. Happy Birthday, Buddy. Along with my friend and co-owner, Gayle Hurst at Old South Land Title, Buddy has become an icon to Realtors. He and Gayle both know the answer to my riddle.

Today I analyzed a closing completed last year. The closing included a contract, a deed, a survey and other documents, all presented at the table at closing. In fact, there were several prior surveys together with one done immediately prior to closing. Because of the speed of the closing the ink on every document must have still been wet.

The description in the contract was wrong, and it was different from the legal description of the survey. Both were different than the description in the deed. The problem was that the property the Seller described and sold was different than the property the Buyer said she intended to buy.

What we learned was that the Buyer presented the contract with a contingency that the deal close within seven days. There was no discussion of why such speed was necessary. As it turned out, the Buyer permitted her agent to review the documents available at closing, and the Buyer did not see the property or attend the closing. The Buyer paid cash; the Seller got exactly what she wanted in the deal and the Seller walked away.

Now, because of a lawsuit alleging that the Buyer was misled about what she was buying, both parties have paid thousands of dollars in litigation expenses, and no one can yet predict the outcome.

Lawyers reading this will be familiar with the doctrine of merger as it is used in real estate closings. The rule is that a contract is merged into a deed when the deed is delivered, and if the deed is different from the contract or is wrong, the deed expresses the intent of the parties. But that is a rule, and there are exceptions.

The message to real estate agents and their clients is that you should read closing documents carefully. I have said in this space before that the survey description should match that in the mortgage, the deed, the title insurance policy, and all other documents delivered at closing. Those of you who have read this article will remember that the first step in a closing is the Sellers’ deed goes to the title insurance underwriter. When the chain of title including all easements, restrictions, covenants, and platted information is available from the underwriter, that package goes to the surveyor. All those must be shown on a survey.

In a high stakes poker game, no one would dare play the hand without looking at his cards. A closing is no different. If you let it happen without carefully looking at what you’ve been dealt, someone else will soon take your place at the table.

When someone tells you to do a real estate closing quickly, there’s a good chance that person has an ulterior motive, or doesn’t care about detail. In either case, they are dangerous.

We have talked in prior articles about the importance of slowing down enough to confirm the transfer of money in this electronic world. This article says that mistakes you make by being in a hurry are not just the transfer of money.

The answer to my riddle is not what you think, silly, it is real estate closings.

Mike Chesser is President of Chesser & Barr, P.A. and Old South Land Title, Inc., both in Shalimar, Niceville and Crestview. He is Board Certified in Real Property and Local Government Law and can be reached at mike@chesserbarr.com. All articles are indexed and can be found online at www.chesserbarr.com/blog/