In most parts of the country, when a home is sold, the closing is handled by one title insurance company at which both the buyer and seller close at. In St Louis, “split-closings” are common, meaning that the buyer and seller close at different title companies. Is this bad, or a risky move for them? To answer this, I turned to Wendy Cromer, Vice-President of Marketing for Security Title Insurance Agency, LLC and the current President of the Missouri Land Title Association for her perspective.
When I asked Wendy if St. Louis is the only place doing split closings she said split closings are not strictly a “St. Louis” thing, however, they are very rare from a national perspective and how we define them locally is different than how they are defined in other areas. When buyers and sellers have a split closing, and close at two different title companies, each title company has a role they serve. According to Wendy, typically the buyer’s title company produces the title insurance commitment, would handle ordering any buyer items (i.e. survey) and coordinating with the new lender regarding figures and their requirements.The seller’s title company typically receives the commitment from the buyer’s title company and works with the seller to clear up any and all liens that appear. The seller’s title company will also check for subdivision assessments, specials, verify commission and earnest money. Each title company involved will create a closing statement for their side of the transaction and the two title companies will compare figures and balance. The buyer’s and new lender’s funds will be deposited into the Buyer’s title company. They will retain whatever monies are needed to be disbursed to issue a “clear title” to the buyer and lender. The seller’s title company will deliver the transfer deed and other required seller documents to the buyer’s title company and will receive the balance of monies left to pay their seller, the listing agent (if applicable) and themselves any fees owed.
When asked if split closings are bad, Wendy replied “I think that many title insurance underwriter’s had hoped that split closings would go away. From the underwriters that I have spoken with, it is their belief that split closings have a potential for higher claims. I would probably agree with that statement. I think the more companies involved in a file, the more risk for error. I also think that the ability to utilize technology and reduce error goes away when one company (with one software system) is responsible for producing the legal description on a transfer deed and the other title company (with a different system) is responsible for typing the deed. On the other hand, I understand that we are in a business built on relationships and service and that agents, lenders and consumers want to work with people that deliver the service and that they trust to do the job.”
If you have questions for Wendy or would like for her to handle your title insurance needs, you can contact her via email at wcromer@securitytitlestl.com or call her at 314.402.6626.
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