Real Estate Agent · Atlanta, GA · Member since 2015 · 359 posts · 158 votes
I recently closed on a property that was offered by an auction company. In the contract it did say that I am responsible to pay the commission for the auction house. The seller picked out the title company. I got the HUD from the title company and wired the funds that was requested, got confirmation deal closed, took possession of the property and got the title policy along w/ the DEED. The seller realized a couple weeks later that the title company (the one the seller chose) made a mistake on the HUD and showed the Seller pays that commission. Two weeks later, they are coming after me for it. Do they have a case?
I am not a lawyer, but have been around the block a couple of times.
Usually your closing docs will have one page about Errors & Omissions. Basically it says if the title company screwed up on anything, you agree to allow them to fix it. Check your docs and see what they say.
Of course, possession is 9/10ths. With some legal help, there may be a way to get title insurance to cover it. You'd have to decide if it is worth paying a lawyer to potentially not pay the auction house fees.
If the contract said that the Seller paid the fee, and there was the same error where You paid the fee without noticing it, wouldn’t You think you deserved it back?
There are usually signed documents at closing on both sides stating something like the terms you sign at closing constitute the final agreement, and any terms that would survive closing should be disclosed at closing, not after the fact. Read through your package and see what that states. The seller should have reviewed the closing documents and corrected them before signing. As far as title company being able to fix errors, you may have signed a power of attorney giving them permission, so read through it if you did, as it was my understanding it was for clerical mistakes, not redistribution of funds. I did have a closing where the lender called buyers back for a "second" closing as there was an error of over $1,000, and they wouldn't fund until it was corrected. When I closed at that title company again, they wouldn't complete signing until after confirmation that they received funds from lender, so it appears they changed their process to ensure that didn't happen again. Not an attorney, just my opinion, but if it's already been closed, recorded and paid, I would think it's done unless your documents state otherwise.