As a closing attorney in Fort Mill, South Carolina I have the privilege of working with a lot of families every single day. Individuals are relocating to the Carolinas for a variety of reasons – a new job, lower taxes, better climate, proximity to grandchildren, the list goes on! People are starting new chapters to their lives, and I am honored that I get to play a part in their real estate purchases and sales.
Now that we’re another year removed from the pandemic, everyone knows the real estate market is competitive. Inventory is low! There are a myriad of moving parts, details, terminology, as well as different industries involved in a real estate transaction. To break it down briefly, most individuals work with a lender, a real estate agent, and a closing attorney and/or title company to facilitate their closing.
The lender, which can be a banker, loan officer with a mortgage company, or a broker, is the entity that provides the financing for the transaction. They control the terms under which they will lend money – known as a mortgage – to a borrower to purchase real property. Mortgage lenders will almost always insist on retaining a security interest in the house being purchased as collateral for their loan.
The real estate agent or REALTOR is the licensed professional that is qualified to sell you the property you want to purchase (confusingly known as a “seller’s agent” or “buyer’s agent”) or sell (known as a “list agent”). Most realtors have access to the properties you want to view in order to determine if you want to buy it, and are typically knowledgeable of the neighborhoods, communities and cities in which they work and where their clients want to live.
And then there is the closing attorney and/or the title company. Closing attorneys are required to supervise and conduct real estate transactions in South Carolina, and while title companies can handle them in NC, the requirement is essentially the same there as well. Other states have title companies handle real estate transactions, so it’s always important to research the laws of the jurisdiction in which you are considering a real estate purchase. The closing attorney prepares all of the legal documents needed for a real estate transaction, handles all of the funds for the parties and the lender, and ensures the signing ceremonies are conducted properly and in compliance with state law.
Aside from the delightful families who I get to meet at closings – the best part of my job is the collaboration that takes place between my office and our realtor and lender partners. In order for a transaction to feel effortless and smooth for a buyer or seller, strong communication is key throughout the entire process, from signing the contract until disbursing of the funds. Educating the clients as they move through each step of the transaction is crucial to their understanding.
Real estate is as busy as ever, and I am truly living out my dream job each day. This calling has led me to want to serve my clients and partners at a higher level. And it’s led me to the discovery of this problem that nobody in the industry wants to talk about. That problem is the information gap that exists in the industry.
The reason that collaboration is the best part about my job is in part because it is so important. And if that communication breaks down or education of process by any of the industry partners is missing, the clients suffer. It certainly is heartbreaking when I have buyers sit down with me at a closing to buy a house, and it becomes evident that they haven’t had that education along the way.
I understand how the industry works, as it is a business. Lenders, realtors and closing attorneys all operate on a volume basis. There will always be pressure to work efficiently so as to serve as many clients as possible. There is nothing wrong with growing a team and having ambitious goals to reach more clients. But the high volume of work cannot come at the expense of skipping steps or failing to educate each and every client so they can make informed decisions.
As a subset of this communication gap is the uncertainty as to whose role it is among the industry partners to explain what to the client. Some items are clear-cut. Certainly a realtor should not be practicing law and a closing attorney should not be examining a borrower’s credit to determine the amount they can borrow. Those are easy examples. Other nuances of the industry involve a lot of overlap, and it’s not so clear as to who should carry the responsibility of educating the client on the matter.
That’s where Johannesmeyer & Sawyer, PLLC comes in. Rather than “passing the buck” so to speak to another industry partner, this blog will lean into the topics that every buyer and seller of real estate should understand. As a closing attorney, I’ve got a good grasp on the legal aspects of the real estate transaction. Beyond what can be learned in a textbook, I’ve had the benefit of conducting an average of 4-5 residential closings a day for over four years, and I’ve heard the common questions that come up time and time again from our sellers, buyers, and refinancers.
The goal of this blog is to decrease the information gap, one post at a time. And the intent is to be collaborative. When appropriate I’ll have realtor and lender partners co-author a piece so that we can fully capture the collective expertise of the industry. The end result will be a rich depository of topics that buyers, sellers, realtors and lenders can all access, for free. Equipped with more information and knowledge, parties can more effectively carry out their real estate transactions.
I hope you will join me in this effort to provide accessible knowledge to facilitate more informed real estate transactions in the Carolinas, and beyond.