The Friend in the Room
You arrive at a purchase signing for Mr. Okafor, a first-time buyer. Your friend Dana is the buyer's real estate agent and is present. Halfway through, Mr. Okafor points at the Closing Disclosure and says his loan officer quoted $4,200 in closing costs, but the total closing costs line reads $6,150. He asks you to explain the difference between boxes 4 and 5 and whether he should sign. Later, Dana pulls you aside and says that if he balks you should just tell him these numbers are standard and everything is fine, because the deal must fund today - and that she will take care of you with a gift card.
1. How do you respond to Mr. Okafor's questions at the table?
Read the worked answer
You can locate information; you cannot interpret it or advise on it.
- Point, read, don't analyze. You may show him where the total closing costs figure appears, note the page, and confirm that the document says what it says. Explaining why boxes 4 and 5 differ, or whether the increase is legitimate, is beyond a signing agent's role and risks unauthorized practice of law and a licensing problem for you.
- Redirect to the source of truth. The loan officer, the title company, and the settlement agent can explain the CD. Give him the numbers to call, and do not editorialize about whether the increase is fair.
- Do not answer 'should I sign.' That is his decision, made with whomever he chooses to consult. Telling him it is 'probably fine' shifts the risk of a six-figure transaction onto you.
Document what he asked and that you referred him to the lender.
2. What do you do about Dana's request and the gift card offer?
Read the worked answer
Decline both, and disclose the relationship.
- Impartiality. A signing agent's value is that they are a neutral witness to the transaction. Coaching a buyer to accept a cost discrepancy so a deal funds turns you into an advocate for the transaction, which is the opposite of the role.
- Undisclosed compensation. A thing of value offered by an interested party in connection with a federally related settlement service raises kickback/ referral-fee problems under federal law, independent of your signing company's own prohibition on accepting gifts from real estate professionals.
- Disclose. Tell your scheduling company that the listing or buyer's agent is a personal friend and that you were approached. Papering over the relationship is what turns an awkward moment into a credibility problem.
Then continue the signing as a neutral. If Mr. Okafor declines to sign, report that fact without argument.