Title errors last minute, now must pay rate lock extension fee.

[Larry Bowers]

I love that real estate tests my problem solving abilities at each and every turn. I got thrown a curve ball this week. Before I relent and go with the flow or stand my ground and ask for compensation, I need some advice.

I am buying a rental property and it was supposed to finally close last week, contract date is 08/22 and closing date was to be 10/03. However, the day before closing, errors with the legal description on the deed on the last sale of the property have delayed closing and looks like it will take another week at least to get clear title. The bank is hitting me with a rate lock extension fee because the transaction hasn’t closed. I want to know if I am being reasonable with believing that other parties, like the title company, seller, or a particular title insurance policy should compensate me for the fee. Or if banks routinely waive the fee upon request.

Some thoughts I have are: Shouldn’t the title company have caught this error sooner and compensate…why should I have to suffer because they waited until it was too late? What about title insurance policies, either the one that I am buying or the seller’s from when he bought the place, couldn't they be invoked to make everyone whole? If this isn’t covered by some title insurance policy, mine-to-be or the seller's, then what good is title insurance anyway? Do I own that title insurance policy yet since I haven't closed? Should I ask for compensation from the seller directly since he can’t give me a clear title? If the transaction did close and then the error was caught in a month or a few years from now, then fixing it would be covered by title insurance so why can’t it be invoked now? Should I just ask the bank to waive the rate lock fee, do they frequently do that upon request?

[Larry Bowers]

@Aaron Poling

Just circling back, Walter. Seller paid for the extension and, a rather magnanimous act considering he is much more experienced in real estate than I am. Ended up buying another house from him. I have to say I would have done the same in his position.