According to a recently published report by RealtyTrac, bank-owned (REO) properties accounted for more than 25% of all residential home sales during the 3rd Quarter of 2010! Our business has seen a substantial increase over the last six months in the purchase and sale of REO properties, and as such, we’ve experienced a high volume of “split-closings.” So what exactly IS a split closing you ask?
A “split-closing” is what we in the title business call a closing in which the seller and the buyer are each represented by an independent closing agent/title company who then work together to coordinate the closing documentation, transfer of funds, and the necessary ground-work. The very nature of a closing agent/title company is to be a “neutral third party,” but often-times, with a foreclosure property, you see a title company who is closely linked, if not owned, by the attorney who handled the original foreclosure itself. This is fairly common and is typically a very good thing to have someone involved who is familiar with, and closely linked, to the selling bank/investor. It can, however, lead many buyers feeling under-represented in the process. A split closing helps alleviate that fear and frustration by allowing the buyer to have their own closing agent looking out for their needs and interests. Although they can sometimes appear to be a hassle on the front-end, there are many benefits to requesting a split-closing, and you have that right. Ask your realtor about your rights as a buyer before signing the contract—communicate your concerns and you will be taken care of!
