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VOL. 40 | NO. 27 | Friday, July 1, 2016

Understanding titles can be tricky business

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All title companies were not created equal. Luckily, most in Nashville are quite good after the Recession buried some of the borderline firms and the new TRID regulations sent a few more packing last November.

It could be argued that the closing is the most important part of the process. Certainly, the inspection has merit, but usually only turns up a few odds and ends. After one of the inspection columns, an inspector wrote to say that in order to have a perfect understanding of the condition of the home, it would take a team of five inspectors one solid week.

Certainly, there would be no need for a buyer to incur such an expense, as most inspections will cite $3,000 to $7,000 in repairs that should be made. If an inspector misses an exposed junction box or the seller refuses to raise a water heater, the consequences will not be dire.

If the appraiser misses the mark by a percent or two, the market will correct it soon enough. The same goes for the lender.

In reality, there can be no surprises from the lender in today’s real estate world with the new TRID regulations. Everyone knows everything, and then they know it again, and then one more time.

There have been a number of closings that have occurred wherein the buyer did not take title to the house. There are numerous examples of second mortgages being recorded in front of first mortgages, and times when second mortgages were not recorded at all.

An even worse situation is when the title company does not use the proceeds of the sale to pay off the mortgage. Unfortunately for some buyers and sellers alike, this has occurred several times in the recent past in Nashville.

In these transactions, the money for the loan is wired from the lender’s account into the account of the closing agent, usually a title company. The closing agent should collect the additional funds required to close from the buyer. These could include down payment, closing costs and prepaid items.

Following the execution of the documents, the closing agent distributes the moneys to the appropriate parties, such as the lender of the current owner, the taxes assessor, the real estate fees, bank fees, title insurance fees and any other expenses in the transaction.

At times, after closing, sellers receive delinquent notices from their former lender informing them that they are late on their house payment. When the seller notifies the lender that the house has been closed, the lender will notify the buyer that they have not received a payoff.

In most of these troubled cases, the title company will insist that payment was made knowing all the while that it was not. At this point, the former owner still owes the balance he owed for his home. The buyer owes the lender for the loan since the lender sent the money to the title company. The title company is the most important player in the transaction.

Sale of the Week

Everyone knows that 12South is the hottest real estate area in Nashville. Or is it?

Some would say it is the Nations, and others make a strong argument for Germantown. And in Antioch, properties have appreciated significantly with the Hickory Hollow renovation and the invasion of the Predators.

As for Woodbine, now referred to as 12South, Jr., it is a neighborhood under the attack of hammers, nail guns and crowbars. To summarize, everywhere is hot, but 12South is hotter.

An example of its royal hotness would be the house at 1104 Paris, on the 11South side of 12South.The home was listed by Tyler Rygmyr – whose name would fare well on a Scrabble board – for $875,000, at $308 per square foot for its glistening 2,833 square feet.

Rygmyr had the buyers scrambling as his Realtor remarks were not descriptive of the house, but laid out the rules of engagement for the battle for Paris. Hailing from Revolution Real Estate, Rygmyr is schooled in the art of real estate warfare.

He noted that the house could be shown through Sunday night and that offers must be presented by the following Monday at 10 a.m.

Rygmyr, being a man of his word, actually followed his own rules, allowing the Main Street Real Estate Team of John Lott and Kim Fennell to assist their buyer in the purchase of the house for a mere $895,000, or $315 per square foot.

The owners, who had purchased the home in 2012 for $582,207, picked up some $300,000 for their efforts.

If things continue as they are, the new buyers will do as well when they sell, Brexit or not.

Richard Courtney is a real estate broker with Christianson, Patterson, Courtney, and Associates and can be reached at richard@richardcourtney.com

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