Do You Really Know What the Documents Mean?

You know, the only time I discover there's a problem is when I really need something to be right. I often see borrowers, lenders, real estate agents, sellers and buyers sign and initial documents without reading the regular print, let alone the fine print.  Even when you're using a standard state form it is imperative to read and understand the verbiage and notes that are written. In many cases you can take the exact same document, give it to three different attorneys and receive three different opinions on what it means. If a document can confuse an attorney, then it is certain to confuse a regular Joe.

I have seen title policies in the wrong borrowers’ name, insurance policies with no mortgagee clause and closing costs charged to the wrong person on the HUD. I have even seen the wrong house foreclosed on.  My personal favorite mistake revealed was an appraisal done on the house across the street that wasn't caught until right before it closed; or I should say right before it was supposed to close. I have seen more draw money released than was left in the budget, incorrect interest rates on a note and more money loaned on a property then it was worth. Mistakes come from all parties involved in the transaction. In most cases it passed through several pairs of eyes yet still was not caught.

My point is that no matter how experienced you are, you must read all of the documents. Especially for those who are experienced and have closed many transactions. Reading documents over and over become old hat so even the experienced person is likely to read over mistakes. Although all things can be repaired, someone always pays the price. Don't let it be your pocket, read the documents.