Many times; most especially in Bank-owned, foreclosed properties, or in properties being sold by a developer or builder, the seller requests (or makes you) use their settlement company. Laws pretty much say that Buyers have the right to choose their own settlement (aka Title Company) company; but trying to ask this of a bank for an REO (foreclosed property) is pretty much impossible.
Builders and developers also often "tie-in" seller paid closing costs if you use their lender and/or settlement company.
Of course both these folks are seldom making their choices of settlement companies based upon great service - it's about money. Either they are the cheapest, are providing some of that closing credit or are giving a discount rate to the seller for a bulk number of transactions.
I don't think it is EVER about service.
I have closed two foreclosed property transactions last month, both with different banks and different settlement companies. Both of these transactions were dreadful. It wasn't about the bank not being responsive with offers and counter-offers; it wasn't even about the (often overwhelmed) listing agents - it was the complete lack of basic customer service from the Settlement companies.
The settlement company is not really representing either party. They are representing the transaction. Both buyer and seller are paying them. More importantly, they are making most of their money from the buyers purchase of title insurance.
So then why is it so difficult to return a phone call? Update the agent (and the buyer) on the progress, get the correct information for closing - do anything correctly? The simple service for both of these companies was so bad - it is obvious that the only business they will get is by banks who "direct" their sales to those companies. No Real Estate Professional would ever recommend them to their clients.
One company even called 2 hours after settlement saying they made a mistake and owed the buyer money. After 3 weeks my client called and asked where the money was - he never recieved it and was worried to went to the old address. After 3 attempts of calling them - they returned a call and told me "oops, it's in the file, we never mailed it". Unbelievable!
The moral of the story is this: When possible - use a recommended Settlement Company and if you must use the sellers company - put on your 'Patience Hat' - you're gonna need it!!
Call James for all your Real Estate needs and questions; servicing Virginia, Maryland and the Greater Washington DC area. Coldwell Banker Residential Brokerage - Chevy Chase
5028 Wisconsin Ave NW Suite 100
Washington DC 20016
202-351-5800 Main Office
Licensed in DC,MD,VA
