Property Matters

Case Study: A Title Surprise Before Closing

Illustrative examples. Past results do not predict future outcomes.

Client: First-time home buyers in DeKalb County (details changed)

Counsel: Sterling Amos Law Group

Matter: Residential real estate

Summary: This illustrative matter follows buyers whose title report showed an old lien from a previous owner, discovered one week before the scheduled closing. It is a composite example, written to show how title questions are usually handled.

Background: The buyers had locked an interest rate that expired shortly after the closing date. The seller insisted the lien had been paid years earlier but had no paperwork on hand. The buyers had already scheduled movers and taken days off work for the move.

Obstacles:

1. Rate lock: Delay could raise the buyers’ monthly payment. The lock expired four business days after the planned closing.
2. Missing proof: The seller could not find a release document. The seller had moved twice since the loan was repaid.
3. Lender rules: The loan could not fund with the lien showing. No loan can fund while an open lien shows on title.
4. Moving plans: The buyers had already given notice on their apartment. The lease on their apartment ended on the closing date.

Our Approach:

1. Title call: We contacted the title company the same day. The title officer confirmed exactly what the lender needed. The call was logged with the name of the officer and the time.
2. Lienholder request: We asked the old lienholder for a payoff or release letter. The request included the old loan number and payoff date. The letter was sent by email and by overnight mail.
3. Escrow option: We proposed holding funds in escrow if needed. The seller agreed to escrow funds if the release was slow. The escrow amount was agreed before anyone needed it.
4. Rate extension: The buyers asked their lender about a short extension. The lender explained its extension policy in writing. The extension request was approved the next morning.

How It Unfolded:

• Release found: The lienholder confirmed the old debt had been paid. The lienholder found its payoff records within two days.
• Recording: A release was recorded with the county. The county recorded the release the same week.
• Updated report: The title company issued a clean commitment. The new commitment showed no open liens on the property.

Resolution:

1. Closing: The purchase closed three days after the original date, with the movers rescheduled at no extra cost. The buyers signed their papers at a table, not in a rush.
2. Rate: The lender granted a short, no-cost extension of the rate lock once the release was on record. The final payment matched the one quoted at the start.
3. Records: The buyers received copies of the recorded release to keep with their deed and closing papers. The recorded copy arrived by mail about a month later.

What Changed:

• Peace of mind: The buyers own a home with clear title. The buyers moved in with a clean deed.
• Knowledge: They understand what a title commitment shows. They now read title commitments before signing anything.
• Contacts: They know who to call for future property questions. The title officer and lender are saved in their phones.

Takeaway: Title problems surface late more often than people expect. Fast, specific requests usually solve them.