Newly Revised Realtor Sale Agreement Requires Speedy Ordering of Title Report
The Pennsylvania Association of Realtors recently revised its Standard Agreement for the Sale of Real Estate to add new Paragraph 14(A) which provides:
'Within __days (7 if not specified) from the Execution Date of this Agreement, Buyer will order from a reputable title company for delivery to Seller a comprehensive title report on the Property. Upon receipt, Buyer will deliver a free copy of the title report to Seller."
According to the PAR website, "The basis of a home sale is the transfer of good title, and the sooner the parties are aware of any potential clouds or restrictions on the title, the better. While this is usually part of the mortgage process, a report may not be ordered until later in the transaction, after the parties have invested significant time and money in the process."
Note that the buyer's obligation is to timely "order" the comprehensive title report. There is no time period explicitly setting forth when the report must be obtained and delivered. There is also no mention about the title insurance commitment that will be required by the lender or buyer in the vast majority of transactions. Whether a failure of the buyer to place the title order within the designated period will constitute a material breach of the Agreement remains to be seen.
Since the default deadline of 7 days is identical to the time period the Buyer has to make a mortgage application, we would recommend that a longer time frame to order title, perhaps 15 days, be inserted. This will allow the buyer, with the advice of his or her Realtor and lender, adequate time to make an informed decision as to from whom to order the title report. The requirement to order the title report from a "reputable title company" will be met by placing the order with a licensed title agent.
As licensed agents for First American Title Insurance Company and Fidelity National Title Insurance Company, the attorneys of MacDonald Illig's Real Estate Group stand ready to assist buyers in the timely issuance of the required title report and title insurance commitment. You may call, email or fax a title order to any member of our Real Estate Group.