Seller Proceeds Must Match How Your Seller Holds Title

To get ahead of last-minute scrambles and frustrations, sellers should be made aware that the account they use for proceeds must match how they are vested in title.

Example 1 – If title is held in an LLC or Trust, we cannot send proceeds to an account in the individual’s name. An account will need to be located or opened under the name of the LLC/Trust etc.

Example 2 – If parents of a college age child buy property and put that child’s name as the only owner of record for tuition and/or tax reasons, that child is now the only seller. Proceeds must be funded into an account in the child’s name, not the parents, regardless of who initially funded the purchase.

If an account cannot be created or located in time for closing, we can always cut a check to the correct payee.

Why do we care?

We are regulated and audited by the Texas Department of Insurance (“TDI”) and we must meet their requirements of “Closing The Transaction” per governing statute (Section 2501.006 of the Texas Insurance Code), of which the relevant excerpt is below:

(3) the consideration has been passed;
(4) all proceeds have been properly disbursed;

For consideration to have passed and the proceeds to have been properly disbursed, the seller of record must receive the funds.

Should you have any questions, please reach out to your escrow team. Heritage Title Company is committed to excellence, and we look forward to working with you!