Posted by Kristine-CA on March 10, 2006 at 10:37:22:
Oh I’m sure there is. But it’s about a working relationship. They aren’t
refunds, but money due to me or my buyers and sellers because of
errors. They don’t have much of a leg to stand on, IMO, except
statutue of limitations when they apply. Kristine
I just made $2630.57 for 20 minutes work! - Posted by Lin (NC)
Posted by Lin (NC) on March 09, 2006 at 11:08:55:
OK, I didn’t really “make” it. It was mine all along. But that’s the total of the errors I found by carefully reviewing the closing documents - settlement statement and HUD-1. By comparing the two I was able to determine that county taxes were lumped in with all the other “Settlement Charges to Seller” on line 502 of the HUD-1, but also had their own line on 508. If I hadn’t pulled out the calculator and checked the math, I wouldn’t have caught it.
I was selling multiple properties using the same broker, so I had negotiated a reduced commission of 5% which was noted correctly on the sales contract, but when I reviewed the HUD-1, the commission had been calculated at 6%. That?s $1670 of profit that vanished! This same error occurred on the sale of my other property, but with a different closing agent. Honestly, I doubt the broker’s office would have caught the mistake themselves and cheerfully refunded the overpayment.
There have been a few times I showed up for closings and it was the first time I’d laid eyes on the closing docs. I won’t allow that to happen ever again. Sitting down at your leisure with a calculator in hand to review everything is critical. I don’t know about everybody else, but I definitely think less clearly at the closing table than I normally do.
I’ve probably missed many errors over the years by not knowing what to look for, or trusting the computer program’s math, but I’ve learned a lot reading these boards, and being told by the experienced investors who post here to review the closing documents has made a big difference today. I thought I’d share my experience and hopefully “make” somebody else some money too.
Lin
Got my closing done in court … - Posted by Frank Chin
Posted by Frank Chin on March 10, 2006 at 09:13:48:
Lin:
One of my closings wind up in court.
It started when the seller complained he didn’t receive credit for the “oil in the tank” at the closing. I was all ready to pay me the paltry $150.00 when the wife complained that he promised to fix the windows, he didn’t, and wouldn’t allow an offset. Attorney said the oil charge is allowed, but the windows is not, based on the way the contract is written.
So, I studied the contract, the closing docs in detail when he sued me in small claims. I arrived at court ready.
Judge wanted to know if we got attornies at the closing. We answered “yes”. Judge wanted to know if I owe him the oil, I said, “yes for $100.00”. Judge wanted to know why I’m not paying the $100.00. I said "because there were errors in the settlement where he owed me more than I owe him.
Judge said “show me”.
I said “first, the seller lived there over 10 days after closing and I got credit for $50.00 a day, not over $70.00 that I was entitled to. And, on top of which, I’m entitled to over 10 days!!”.
Judge said “I thought the contract allowed a fix amount per day of $50.00”. I said “no, its the prorated portion of interest, taxes, fuel, water, sewer etc. It adds up to over $70.00 but it was TOO MUCH work to figure out, so they came up with a $50.00 estimate.” I showed the judge my calculations.
Judge said “what’s all this about him owing you another week??”
I said “when I arrived six days after closing they were clearing out the closets”. The seller protestes “but my furniture was out”. Judge said “if your clothes are still there, you didn’t move out”.
Judge asked, “how about the next day?”
I said “he was moving some stuff still in the garage”.
Judge said “anything else besides him moving late”. I said “yeh, there’s a whole bunch more here that I wanted to go through”.
Judge finally EXPLODED, said “OK, I heard enough. My ruling is YOU DON’T COME TO COURT TO HAVE A JUDGE DO A CLOSING FOR YOU BECAUSE THEY CAN’T DO IT PROPERLY AT THE CLOSING”.
Ruling: I don’t owe the money. Judge looked at me and said “you proved you don’t owe the money, and I don’t have all night to do your closing here”!!
At which point, the audience laughed and clapped, as we were thrown out of the place.
Frank Chin
Re: I just made $2630.57 for 20 minutes work! - Posted by lukeNC
Posted by lukeNC on March 09, 2006 at 20:04:27:
i once made $22k on a judgment i bought some years ago for $2k.
I bought it and tried to execute, then finding out the seller didnt own anything. Gave up on it, then about a year later, title insurance company called and wanted to settle for $22k because it should have been paid off in a closing 3 years earlier. The closing attorney at that time didnt catch the judgment.
I gladly accepted.
Re: I just made $2630.57 for 20 minutes work! - Posted by Kristine-CA
Posted by Kristine-CA on March 09, 2006 at 19:35:15:
Lin: this made me smile (in frustration). I had horrible experiences
with escrow officers when I first started. I worked with one that made
mistakes on every single escrow. Most of them not in my favor. There
was one deal that become a big joke around the house. First I noticed I
was double charged for a title policy. Got that refunded. Then I
noticed that they had withheld a “PAD” (that’s what they call the extra
amount for misc costs) that never got refunded. Got that refunded.
Then I noticed that they over charged me on the transfer tax as they
put the wrong sale price on the deed.
The joke was whenever we needed money we said go study the closing
statements–there’s sure to be something.
I have better service now from better officers, but they still make
mistakes. Sometimes they use a copy of my last closing statement and
replace the numbers–missing some, etc.
It’s always good to read those things like…it’s your money! Kristine
Incompetence running rampant! - Posted by Wayne-NC
Posted by Wayne-NC on March 09, 2006 at 18:24:51:
Anybody find that becoming the norm in this country lately with everything and anything we do? Why is it that people never have time to do things right the first time but they always need time to do it again! You see how this is costing us time and/or money? If your HUD was done right the first time, what would you do with the 20 minutes that were almost STOLEN from you. Yes, I now make an allowance in REI for what I call the “incompetence cost”. I’m not kidding! I love the positive force of efficiency. I credit my limited success to it everyday. Imagine what I could do if I really tried.
Re: I just made $2630.57 for 20 minutes work! - Posted by J.D. Stewart
Posted by J.D. Stewart on March 09, 2006 at 16:48:00:
I had a closing 3 weeks ago where the property taxes for the last half of last year were CHARGED to me instead of credited. This was with Ticor, no less. A $420 mistake.
J.D. Stewart
Re: I just made $2630.57 for 20 minutes work! - Posted by dealmaker
Posted by dealmaker on March 09, 2006 at 14:33:45:
Yep, I’ve found mistakes on ABOUT ONE HALF of the closing documents prepared by OTHERS. By law they’re required to provide by buyer and seller with copies TWENTY FOUR hours prior to closing. I ALWAYS demand that the fax them over, no 24 hour notice and I’m going to be a no-show, no exceptions.
dealmaker
good point - Posted by Anne_ND
Posted by Anne_ND on March 09, 2006 at 13:08:12:
Hi Lin,
About 90% of the time time I find an error on a HUD-1.
Most recently I had a buyer on a contract offer to pay off early for a discount. We agreed on a price and the buyer agreed to pay all closing costs- put another way, he would pay all costs associated with closing. Meaning I walk away with nothing but the cash, no expenses. I’m trying to phrase this as simply as I can because my attorney just didn’t get it.
I was out of town so they mailed a very large check THAT HAD BEEN MADE OUT INCORRECTLY to me in an envelope with a stamp- no tracking of any kind. They also enclosed a bill for document preparation. When asked about this they said it was because “it’s customary for the seller to pay these prep fees”. Even though they knew the buyer was paying all costs, it was their opinion that I should pay the fees.
I had to send back the check to the attorneys before they would reissue a check that my bank would accept, thus increasing the time I did not have the money.
I get it that title companies are very busy. I get it that small closings are not the most important. But it just seems like a very poor business model to so consistently make mistakes on important docs.
So, you’re right- always read your docs! Good for you on this one.
Anne
Re: I just made $2630.57 for 20 minutes work! - Posted by Adam-MI
Posted by Adam-MI on March 10, 2006 at 06:10:37:
is there a limit on how long you have to claim these ‘refunds’?
Re: good point - Posted by Kristine-CA
Posted by Kristine-CA on March 09, 2006 at 19:43:07:
Hey there Anne. Many times I offer to pay ALL costs associated with
closing and net the seller a certain number. I have found it to be a
great negotiating tool. Many people have had bad experiences with
selling real estate, don’t understand the fees, etc. and are very
concerned about the bottom line.
However, like you say, the closing people have their own ideas about
what is customary, and who is supposed to pay what.
My contract, which is very brief, has the most space dedicated to who
pays what and spells out very explicitly what “Buyer will pay all costs
associated with closing” actually means. It’s taken about three years
to perfect the contract AND get the escrow people trained to read it.
But as you also know, where I am sometimes I have bigger things to
worry about when reading the escrow statement for closing costs.
Now I need to check the selling/purchase price every time. 
Kristine