Mortgages, Real Estate Closings, Real Estate Attorney, Real Estate Attorney, Real Estate Closing

Illinois Real Estate Closings- Are clients getting screwed financially?

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Those who know me, know that I didn’t get into real estate to make a billion dollars. I got into real estate because I wanted to help people have the right information that they needed so they can make a smart financial decision when buying a home. Over the years I’ve seen a lot of craziness with realtors, real estate attorneys, and loan officers which was obvious that they were working with THEIR best interest in mind – not their client’s. Some of the actions and conversations I’ve heard make me wonder how some of these people have kept their licenses!

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As a broker-owner, I’ve seen from several of my agent’s and my own deals of incorrect math calculations on commission checks. The first time it happened, I just dismissed it as human error. I’ve been doing this for 9 years and we all make mistakes so it’s not a big deal. Unfortunately, these math errors have been happening more and more in the past several months.

To help minimize closing financial errors, I implemented a commission disbursement form that we can send to the real estate attorneys five days before the scheduled closing. This form states the price, minus closing credits and the percentage from the MLS listing to help ensure correct payment. For those who don’t know, real estate attorneys are responsible to work with the mortgage company and title company to make sure the final settlement statement is correct so that the buyer and seller know how much to bring to closing in order to close on the contract.

stewardAlthough we provided the real estate attorney the commission form, the check was STILL incorrect, and I had to contact the listing brokerage for correct compensation. When I inquired with the attorneys involved on the closing I was told, “It was not [their] responsibility to make sure the payment was correct and that it was the listing brokerage’s responsibility.”

At this moment I’m having that feeling like I had right before the housing crisis. ‘Wow’, I thought to myself. This just spurred a lot of questions in my mind. The amounts are clearly listed on the contract and yet the attorney will NOT bring to the attention of an incorrect math error! If the commission is incorrect, wouldn’t that affect the seller’s final number that they have to pay out?! If the real estate attorney is working in his client’s best interest, why would they be defensive instead of being proactive to correct any math errors on a closing statement BEFORE it closes to make sure their client is paying the correct amount?

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For those who haven’t seen the movie, “The Big Short”, you need to see it! The housing crisis occurred because of shady real estate and loan practices. Unfortunately, there is no “real estate police”. There’s no official group that checks to make sure that buyers and sellers are not being overcharged in closing fees or have a clear understanding of exactly each fee. This concerns me.

Buyers and seller just have to “trust” that their real estate attorney and their lender are really doing what’s best for them. I suggest you interview your attorney and your loan officer. Don’t just “hire” them beGreen foam house being held by baby and adult handscause they are a friend of a friend. Ask them how they plan to represent you and ask them to give you an example of how they helped a prior client when there was a tough issue. You want to make sure you have a clear understanding of what role they play in a real estate transaction so you know what to expect before you choose them.

Shena Omotola, Dream Home Specialist & Broker Owner of Skyward Realty – Skyward Realty services Chicago, Suburbs, and Northwest Indiana

P.S. Feel free to email me any questions. I’m always here to help. Shena@SkywardRealty.com

Shena Omotola

 

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