Seller wants to change title companies before closing??

Question

I was supposed to close a week ago on property but we are seeing delays. The seller now wants to back out or change title companies. He is furious with them for lack of communication, lack of internal communication, time delays and other things. He has been upset that it wasn't a checklist of all documents needed to be signed at once. They have trickled in one at at time over the course of several weeks. I also don't think he understand the process. Unfortunately I don't understand it enough either....

This is an inherited property which had him and 3 other siblings on it as beneficiary upon death. In 2017 his mother listed just 2 siblings on it without canceling the first one. The seller wants everything to go through him, all paperwork, warranty deeds, seller directions etc He does not want title company mailing it to his siblings to sign off. He wants to drive hours to walk them through it himself in person. . But is now furious that he will have to bear all the tax burdens. (instead of it being distributed between siblings)

The title Company has already did the the title search and 90% of work. I don't think this is their fault. But what can I do save this?
Is it too late to switch title companies? Would I still have to pay them for their work? Is this out of his mind?

Alan Lacey · Answer

@Tyler Weiss it is hard to imagine this is anything other than he doesn’t like the answer they are giving him so going to waste time finding out it is the same everywhere. Title opinion pretty consistent. If I had to guess would assume there is paperwork that wasn’t filed correctly or that there is some one who wasn’t supposed to get funds that title is saying will have to

Peter Walther · Answer

Some of the terms your using are nebulous making it difficult to come up with an informed opinion.  For example you wroteThis is an inherited property which had him and 3 other siblings on it as beneficiary upon death. In 2017 his mother listed just 2 siblings on it without canceling the first one.

I can't tell if title is inherited either w/o a will (intestacy) or with a will (testate) or if there is a deed with five grantees, mom and four children, which was then conveyed to mom and two children and if so was title held as joint tenants with rights of survivorship or tenants in common.

It's quite possible the title company is requiring the other children to sign a deed to convey any interest they may or may not have and want to deal directly with them rather than relying on the child you dealing with to obtain the deeds to reduce the possibility of receiving forged deeds.

I'd probably talk with the closer whose handling the transaction at the title company and make sure I understand the problem.

JD Martin · Answer

In my state the buyer picks the title company, not the seller. I work with title companies that I'm comfortable with. I did a deal a couple of houses ago with a title company the foreclosure company wanted to use and got several hundred dollars worth of discounts for using them. I wouldn't use them again even for the savings - they were a pain in the ass.

I would say that as long as it's a title company you're comfortable with, and the seller is willing to eat all of the costs, it's probably not a big deal one way or the other. It will slow down the process. Yes, you will have to pay the title company for the work they've done so far. If you are using financing I wouldn't be surprised if your bank requires you to prepay them in order to change title companies. Usually their payment just happens on day of closing.

Scott Wolf · Answer

@Tyler Weiss, it's never too late to change title companies, but if they're so close to the finish line, why stop now?

What state are you in, and who chooses/pays for title?   A cancellation fee shouldn't be too much.

Peter Walther · Answer

I wouldn't be surprised if your Seller took care of mom until she died and has decided he's entitled to the sale proceeds for his efforts.  Unfortunately, it sounds like there are other children in title and they're going to need to sign a deed.

Tyler Weiss · Answer

Thanks for the help. Im still learning whats going on/terms myself. There was an original Beneficiary Deed with 4 children on it from the late 80s. They created another beneficiary deed with just 2 of children in 2017 without canceling or making any changes to the first deed.

After my title company walking me through it, I don't believe this is on the title company. I believe the seller also doesn't understand what needs to be done to close. His expectation are not reasonable. Changing the title company won't change the fact that all of his siblings will have sign off on before we can close. He wants to solely control the sale of the property but doesn't want to bear the tax burden of the sale either. He doesn't want the Title Company emailing or mailing paperwork to his siblings either. Supposedly one sibling is rogue living off radar in the cabin in the woods with no internet....  He wants it all to go through him.  He will "get them to sign it".

Seller wants to change title companies before closing??

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