When you receive an offer on your listings, look carefully at the bottom of page-1 of the NEFAR Purchase and Sale Agreement, specifically paragraph 1.F lines 39-46.
That tells you where the binder will be held. To minimize excessive headaches if there is a binder dispute, remember;
1. If the buyer’s agent is with Watson, make sure Watson Realty Corp. is holding the binder.
2. If the buyer’s agent is not with Watson and their brokerage does not have an escrow account, if Watson Title Services of N FL Inc. (WTSNF) is conducting the closing, make sure that we are the ones who take the binder.
3. If WTSNF is conducting the closing, and Watson Realty, WTSNF, or the selling broker is not holding the binder, then be careful. Some buyer’s agents are entering third-parties, usually attorneys, to hold the binder. Why is that bad?
Look at lines 44-46. What does “Broker’s resolution remedies” mean in paragraph 12.a?
Look at lines 276-278, “…the broker holding the binder deposit(s) may request the issuance of an Escrow Disbursement Order from the Florida Division of Real Estate.”
EDO’s are not an option if the binder is being held by an attorney or Title company. If the buyer and seller are disputing the binder and are at loggerheads, then the only option is interpleader.
If your binder is being held by an attorney or Title company, you want that to be the same entity that is closing that file. They have skin in the game to help you resolve the dispute. If there is a third party holding the binder, there isn’t much the settlement services provider can do to help.
A final note about interpleaders, look at lines 275-276, “…the interpleader’s attorney’s fees and costs shall be deducted and paid from the binder deposit(s)…”
The last three interpleaders we’ve seen had legal costs between $1,000-$1,500, it can go higher. That is taken right out of the binder. This is one of the reasons we recommend a strong binder of at least $2,000. That way, there is actually something worth fighting over, in this case the remaining $500-$1,000 after legal fees, at best.
You can get a PDF of this Title Tip here.
My Agent Greg 