Toward the end of November 2022, Escrow Officer Michelle Polk, from Fidelity National Title Company in San Bernardino, California, scheduled an appointment with a buyer to open escrow. He and his wife negotiated a deal to buy their neighbor's home.

Since the buyers know their neighbor, they did not engage a real estate agent to assist them. The neighbor was elderly and recently moved into an assisted living facility. They agreed to purchase the property for $425,000. The seller agreed to finance $375,000 of the purchase price. The payment terms were unusual. The seller agreed to charge no interest, with annual payments in the amount of $50,000 for eight years. 

Michelle prepared her escrow instructions while the husband buying the home was in her office. He shared with Michelle that he and his wife have known the seller for many years. The seller did not have any family she was in contact with, which is why he and his wife have been assisting her with some of her duties. 

The buyer offered to obtain the seller's signature on her paperwork when he and his wife visited her in the next few days. Michelle put a package together for the seller and sealed it in an envelope. She included a return envelope the seller could use. 

A week later, the buyer came back to return all the completed paperwork – his and the seller's. He explained he and his wife helped the elderly seller with hers. Michelle asked the buyer for the seller's phone number so she could call her to schedule a time for the notary to meet with her to sign the deed. The buyer gave her his number and said he would set it up when the notary called. 

Michelle reached out to schedule the signing. She asked the notary to call her first so she could provide special instructions. She informed the notary the signer was living in an assisted care facility and she wanted to attend the signing, but she did not want the notary to tell the buyer. 

The signing appointment was set, and Michelle attended. When she walked into the seller's room, she was greeted by both of the buyers. She observed the seller was on oxygen, but dressed and visiting with the buyers. 

Michelle introduced herself to the seller and then asked her if she understood she was signing documents that day to sell her home. The seller immediately said, "No," and looked at the buyers. 

The buyers quickly responded by reminding the seller they are buying her home. Michelle believed the seller was confused but then the seller said, "Yes," she remembered. 

Michelle asked the seller if she understood she was loaning the buyers the funds to purchase the home. Once again, the seller said, "No." The buyer looked right at Michelle and proceeded to tell her she did not explain it right. 

When the notary entered the room, the seller asked the buyer how much they were buying the house for. The seller said she thought the house was worth $700,000. The buyer said, "No, we agreed the price is $425,000." 

The notary identified the seller, had her sign the deed and left with Michelle. The notary never affixed his notarial seal to the deed. Instead, he tore it in half. Both he and Michelle agreed they would not proceed but chose not to create a scene at the signing. 

Michelle went back to the office, researched the property and determined it had a current value of approximately $710,000. She formally resigned from the transaction, but she did not feel that was enough. She reached out to National Escrow Administration who provided her with the information to report the incident to the local Adult Protective Services. 

No one actually knows if the neighbors were truly taking advantage of the seller or not, which is why Michelle contacted the state. They are experts with the professional skills and resources to assist the elderly. 

The title insurance policy the Company would have issued to the buyer in this instance provides coverage for competency and duress. It was unclear to Michelle whether the seller truly was selling her home of her own free will and understood all the terms of the transaction. She was uncomfortable closing a sale which could be subject to scrutiny and chose to resign. 

No one should ever close a transaction they are uncomfortable with. Michelle took the extra step of traveling to the seller and did not like what she heard. She made the difficult decision to resign. Her efforts have earned her a reward of $1,500.

Article provided by contributing author:
Diana Hoffman, Corporate Escrow Administrator
Fidelity National Title Group
National Escrow Administration