Fear of Unfamiliarity

It was Monday afternoon at 3 pm, on a fairly cold day with rain, and I had an appointment with a mobile notary and a client here in Texas. We had to change places last minute because the buyer requested to close on his attorney's office, however, his attorney was fully booked for that day, so we moved to a shared office space to sign all the documents. Since my first interaction with the client, he stated several times that he wanted a warranty deed with title insurance, and he would not close with me. It showed me the right way that he had concerns/fears about buying without the proper documentation. It is OK and is a valid concern to have, however, he kept saying it, over and over, in every single interaction with me, which started to become weird, as we had a professional title company handling the entire transaction.

Raining Day

Title Company Role

The title company is a third party that checks all the documentation and makes sure everything is correct, they check the chain of title, liens, and ownership, draft the paperwork, and issue title insurance according to their respective underwriter requests. A lot of people think that I have control over the title companies, and often say, I won't work with your title company, then I reply, they are not mine, they are an established business that works for the entire county and have hundreds of clients, (what is 100% real), but clients do try to check if I have some power over them. (by the way, not all clients, just a minority think like this).

This Client Type

This is only my experience, and do try to put myself in their shoes, to try to understand why would they think like this, but I came to the conclusion that it could be 2 main factors: 1st - Lack of knowledge about the process and 2nd - fear based on past experiences where they where scammed or robbed by other people. I realized that a lot of people live in a scarcity mentality, and they are surrounded by people with the same view of the world, which brings a big problem into your life, as I believe you will attract everything you think about, meaning, their fear attracts fear, their scarcity attracts scarcity, making their life more difficult.

Lack of Knowledge

It is okay not to understand the closing process of a property, as the average person will use it 1 or 2 times in their entire lives, making the feeling of having little uncertainty normal. However, we should ask questions and educate ourselves just a little to understand the basics of the process, mostly when you have someone professional helping you with the process and is open to answering any questions. What happened? We were closing on the property and signing the documents, but I did find an error on the dates drafted but the title company, which I take partial ownership of, because I did review the documents and I missed it as well. When small errors happen we normally correct them with a blue pen, make initials close to the changes and move forward, but the client got extremely bothered about it.

I Felt Uncomfortable

He started asking me again if the property had a warranty, that he wanted to understand every single aspect of all documents, how the financing would work, and how he should pay…. Basically, he started all questions previously answered and seemed not to understand, I explained to him, and the mobile notary explained to him as well, but he seemed not to understand, or actually not to trust whatever we said. At that point, I was uncomfortable, because he would deny any solution and information provided, and then he made a decision. I was explaining to him that I was the bank, and he seemed to be confused with the idea, that my company www.lookforlots.com, was “the bank” as we did owner financing terms for him on this specific property, and he had big doubts about the payment, he asked 2 times, to whom he should send the payments, in this case, to me! He was so uncomfortable with the idea that he said, I will pay cash for the property, I want a warranty deed. I do not like do not like notes.

Last Minute Changes

We did try to talk to him, just too close as it was, because we would need to redo all the documents due to the changes, but he put in his mind that the simplest way to buy this property would be through a warranty deed. He called his bank, confirmed the funds, and then said, I will pay cash. We offer owner financing with no prepayment penalties, meaning, if he wanted to pay off next month, or even the next day, it would not be a problem at all, no fees are charged, but DUE TO HIS lack of knowledge and understanding of the process, he preferred to borrow money from the bank instead using our owner finance program, which made no sense to me and to the mobile notary (the mobile notary is a local realtor).

What did he Lose?

I did an amazing deal for him on this property, we had a special sale on the inventory that was sitting for over a year, and I did a down payment + 10 payments with ZERO interest, and no mortgage origination fee, you may not understand, but with the current inflation I was literally losing around 0.87% of my money every single month on the total balance due on this transaction. What did he choose? He chose to postpone the closing and “pay cash” by borrowing money from the bank with an interest rate (maybe between 13% to 18% a year for pre-approved personal loans). He felt way more comfortable with this option, as evident from his facial and body language. On the other hand, the mobile notary and I were astonished by the situation, as it mathematically made no sense at all.

To be Continued

We are supposed to close by today or tomorrow, I hope everything goes okay. He does need this land, because he wants to build a house for his daughter, and this property is very well located in a good neighborhood. I believe that a little self-information would have made him think way better about this transaction, seeing the real perspective about the opportunity.

Final Thoughts

I always like to measure my actions, and lack of information and familiarity may cause us financial problems, my goal is not to educate every single client (if you thought I would need to convince him the contrary) but actually provide all options for you to take the decision, because, in the end, YOU ARE THE RESPONSIBLE for your choices, as anything in life.

What decisions in life driven by fear or unfamiliarity brought you not the best outcomes?

References:
[1]: “The Earthing Movie: The Remarkable Science of Grounding (full documentary)” YouTube uploaded by Earthing (Nov 19, 2019), https://www.youtube.com/watch?v=44ddtR0XDVU&t=294s.