When buyers of residential property sit down at a real estate closing, they are likely to engage in one of the most important and complicated financial transactions they’ve ever encountered. Well before reaching the closing table, prospective homebuyers should have received the Good Faith Estimate and Initial Disclosure (soon to be combined into one document, the Loan Estimate).  A few days prior to closing, the buyers should also receive the HUD- 1 Settlement Statement and TILA form (soon to be combined into the Closing Disclosure Form).  These documents are intended to give the buyers an estimate of what they can expect their home to cost, so they’re not met with any surprises at the closing table.

Unfortunately once sitting down at the closing table, buyers will be asked to sign and review numerous documents they haven’t yet seen, including a Deed, Deed of Trust, Note, and an Affidavit of Identity.   There is no law requiring prior disclosure of these instruments, often leaving homebuyers with just minutes to skim through complicated legal jargon.  With so many binding legal documents in front of them and added pressure from the seller, realtor, and mortgage lender, it is no surprise homebuyers frequently have complaints about the real estate closing process.

One such complaint arises from the “Affidavit of Identity,” also known as an “Affidavit of One and the Same”; a sworn legal statement that the affiant has been known by other names.  Take a buyer who goes by the name Bob Wilson, and whose full name appears on his identification as “Robert Louis Wilson, Jr.”; he may be asked to swear that he is one and the same as “Bob L. Wilson,” “Robert L. Wilson, Jr.” and “Robert Louis Wilson, Jr.”   Bob would likely have no objection to this, if he has gone by all these variations of his name on occasion.  Similarly, he has no basis to object to an Affidavit stating his name as it appears on recorded documents, tax records, and government issued identification.  Bob may object however, if he is asked to identify himself as “Rob Wilson,” as he has never gone by “Rob” (his father has always gone by “Rob” and him as “Bob” in an attempt to avoid confusion).

Another issue arises when the title company or lender asks a buyer to sign all the closing documents with a signature the buyer has never used.  For example, Bob Wilson, is asked to sign his signature as “Robert Louis Wilson, Jr.”; although this is Bob’s legal name, each person’s signature is represented by their own mark, therefore, one’s legal name has no bearing on what their mark should be.    Bob may be reluctant because not only has he never signed his signature that way, but even the document his full legal name was pulled from shows his signature as Bob Wilson!

Mrs. Wilson may be met with an even more frustrating situation.  Originally born “Lucille Ann Perkins,” the happily wedded Mrs. Wilson now goes by “Lucy Ann Wilson”.  However, at the closing she is asked to sign several of the closing documents as “Lucille Ann Perkins Wilson”.  Although she concedes that she was born “Lucille Ann Perkins” and now uses the last name “Wilson,” in her 30 years of marriage to Bob, she has never once gone by all four names, preferring to drop her maiden name, Perkins.   To make matters worse, she is requested to “sign her name more legibly,” turning her signature into merely a script version of the name the title company demanded she sign, and not her true signature.

Too often when buyers have complaints about the closing process, they may feel they have no choice but to go through with the closing in spite of their concerns.   Since purchasing real estate is generally a time sensitive matter, buyers may feel as though they have little leverage against sellers, lenders, and title companies who want to avoid any delay in closing the transaction.

So what should a buyer do?  First, it’s often beneficial to ask for all the documents you will be asked to sign at the closing beforehand, although you may not always receive them, it never hurts to ask.  If you get to the closing table and are met with questions or something you disagree with, object loudly and continuously until your questions are answered and you are comfortable moving forward! Never sign anything you don’t understand or agree with, after all, it’s your name on the line, not theirs.    Having an attorney available to conduct your closing can also be greatly beneficial, as they are often the best suited to explain the “hows” and “whys” of the closing process.  No matter whether you’re purchasing your first home or your retirement home, all homebuyers should make sure that they are working with a title company, realtor, and lender that have their best interests in mind.

This article was prepared by B.R. “Randy” Allen and Erica Gay.

B.R. “Randy” Allen is the managing partner of Allen & Associates, LLP of Boerne, Texas, a law firm specializing in Real Estate, Oil, Gas and Mineral Law, Litigation, and Property Tax Management as well as the owner of Alamo Title Boerne.  Randy is a Fellow in the State Bar Foundation, a Certified Professional Landman, and is licensed to practice law in Texas, Kentucky, Ohio, Utah, North Dakota, Colorado and Pennsylvania.  He received his bachelor’s degree from Virginia Commonwealth University, and his juris doctorate and M.B.A. from St. Mary’s University.

Erica Gay is an Associate at Allen & Associates, LLP in Boerne, Texas, where she practices Oil and Gas Law.  She is a member of the AAPL and the San Antonio Association of Professional Landmen.  Erica received her bachelor’s degree from Texas A&M University and her juris doctorate from St. Mary’s University School of Law.  She is licensed to practice law in the state of Texas.