Builder doesnt want to use different title company

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  • #69172

    Has anyone ever experienced a new construction builder wanting total control? The builder said they never use anyone else’s title company. Perfect lot, perfect area, get ready for contract time & now this? Heartbroken once again

    #69187
    TTrumble
    Member

    Hello Peach0991,

    So you have verified that “their” title company and “our” title company aren’t the same one?

    Tim Trumble
    Online Operations, NACA
    ttrumble@naca.com

    #69189

    @ttrumble yes two different title companies. They want to close with Empower title but NACA requires Capital Title. Can we do a split closing possibly?

    #69196
    TTrumble
    Member

    Hello Peach0991,

    Oh well, I took a shot at it… 😀

    I’ve never seen a split closing involving two title companies. I’m afraid either Empower is going to have to become NACA authorized or the closing will have to be through Capital. The folks at Empower can contact NACA headquarters in Boston at 617-250-6222. We do it all the time for closings that are a considerable distance from the nearest NACA office, so we can possibly set them up for this closing and then keep them as a backup going forward.

    Tim Trumble
    Online Operations, NACA
    ttrumble@naca.com

    #69220
    JayCee28
    Participant

    Hi! So I’m in the same predicament right now and I’m not sure what to do as I’ve already signed a P&S. The builder and title company (Keystone Title Settlement Services, LLC) state that they are approved by NACA, but when I spoke to my MC, I was informed that they are banned. Any advice on this @ttrumble?

    #69221

    @jaycee28 So the solution is that NACA will allow you to close with their company bit they wont pay for it…you will have to pay for the fees,survey etc. We’ve been battling 2 days about this.

    #69222
    JayCee28
    Participant

    @peach0991 good grief! Do you know how much the expected fees are (percentage wise)? Because if it’s a significant amount, it kind of defeats the purpose of going through NACA.

    #69223
    Nelsont
    Member

    It really depends on what exactly is the fees and what exactly is boa no longer responsible for paying.

    Typically closing fees can be in the range of 2-5% of the purchase price which can equal or come close to the down payment…another reason it’s hard to buy a house and a reason you often see listings advertising sellers offering closing cost assistance.

    If naca will require you to pay the full brunt then that’s the ball park you are looking at. If realtor fees are not included you can take a few thousand off the total though the seller often pays that.

    Without sounding like a homer let’s also remember if you don’t go through naca that 2-5% will double because now you need a down payment on top of the closing costs. And if you are buying down to afford the house now you might not be able to afford the house at all…buying down 0.25% interest has the same impact as somewhere between a 5 and 10% down payment.

    • This reply was modified 4 months, 1 week ago by Nelsont.
    #69225
    JayCee28
    Participant

    @Nelsont thank you for that information! Basically if they won’t go with a NACA approved title company, it’s really no point in continuing the deal based on the additional unexpected fees.

    I heard back from the builder and they’re doubling down that the company is still NACA approved and is actually closing a NACA sale tomorrow and closed one 2 weeks ago. They said they have not been notified that they are no longer approved by NACA and they’ll try to get something in writing from NACA tomorrow. Here’s hoping they can get that so I can stay under contract!

    #69226

    @jaycee28 good grief is the word LOL the home we were looking @ was already over our limit so we were buying down…then to pay the title work crap on top of the regular mrf, it was no longer a good deal…we were still debating on paying it because we wanted the house so bad. The estimate additional cost was $2800 to $3000. I’m in Texas. The goal for us was to keep some money after our purchase, not to spend it all. If you’re not putting up a ton to buy down then this is feasible.

    #69228
    JayCee28
    Participant

    @peach0991 yeah I’m buying down too and was using my money along with funds from the builder so to add another couple thousand will hurt! I really want the house, but I still need to be able to afford it!

    #69275
    TTrumble
    Member

    Hello all,

    Here’s the bottom line…

    The title company in question was decertified by NACA on October 16, 2019, and they WERE notified. I can’t go into details obviously, but it was definitely for legitimate reasons and the decision is not going to be reversed.

    At the time of decertification, we advised them that any closings that were already in the system could be completed, but there would be no new closings through their firm. Considering that was eight months ago, you can draw your own conclusion about the builder’s claim that they were “closing a NACA sale tomorrow and closed one 2 weeks ago”.

    NOW HERE’S THE IMPORTANT PART: In Maryland, the state in question here, state law specifies that the builder CANNOT require what closing firm you use. The buyer gets final say on the closing firm that represents them. Therefore, you are free to use NACA’s currently authorized closing agent, which will be at no cost to you. They are free to also have their normal agent represent them, which would be an incredibly rare “split closing” (like I wrote earlier, I’ve never seen one), and it’s on their dime, not yours.

    We didn’t notify them? Not true. They’re still authorized? Not true. They just closed on a NACA home and have another one coming up? For all practical purposes after eight months, impossible unless the builder “persuaded” the buyer to pay the closing agent’s fees. And you being obligated to use the builder’s preferred closing agent? DEFINITELY not true.

    Now that you’re armed with the facts, time to proceed to closing.

    Tim Trumble
    Online Operations, NACA
    ttrumble@naca.com

    • This reply was modified 4 months, 1 week ago by TTrumble.
    #69277
    TTrumble
    Member

    P.S. @Peach0991, check into the laws there in Texas. I wouldn’t be surprised if it’s the same way there

    Tim Trumble
    Online Operations, NACA
    ttrumble@naca.com

    #69291

    @ttrumble WOW!!! Well that clears it up…It’s definitely not worth it at the end of the day to not use NACA’s title company. So if anyone else encounters this issue & reads this post, DONT DO IT! WALK AWAY & KEEP LOOKING! Lol the amount of money spent can end up being equivalent to those going the traditional route which defeats the purpose…We decided to go with another builder further out but they were SOOO much better. This builder didnt care about the title company & they’re a custom builder which is more luxury & no one’s house looks the same. The home was priced at a sale price so it ended up being more affordable then the basic track home we were trying to purchase. Even with $15,000 worth of upgrades…we still cant believe it. Our MRF went down $3500, the builder gave us $1700 towards closing & our buy down is $799. It’s a total upgrade with a great custom builder & the home is across from a pond…A NO BRAINER! I say all this to say, sometimes we encounter these roadblocks we cant seem to get around because GOD has something better in store for us. Im praying that He’ll lead you to the perfect home. Be encouraged! @jaycee28

    #69315
    JayCee28
    Participant

    @ttrumble Thank you so much for this information!!! I was able to show the builder in writing about the title company not being NACA approved and now they say that they were never aware of the change with that company. They’re looking into the matter and I should be able to get an update to my contract with a NACA approved title company and keep all other terms the same! I’ll know for sure Monday when I see everything in black and white!


    @peach0991
    That’s awesome!!! Congrats on finding a better home for an even better value!! I hope the rest of the process goes much smoother than the start! And you are so right! God has everything handled and if it’s my house, it will work out and if it’s not, something better is around the corner!

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