Tuesday, April 13, 2010

here's another oldie but goodie....buyer beware when hiring a notary public

Be explicit. Are you buying notarial services OR are you buying "signing agent" services?

You see, things are very confused in the notary business these days. Let me take a moment to explain.

Each state has its own set of laws concerning the closing of a real property transaction - purchase or refinance.

In all states, attorneys may perform the transaction.
In many states, attorneys ONLY may perform the transaction.

Many states license title insurance agents and/or producers. In those states these licensed title professionals may perform all or part of the transaction.

Here's where it gets confused. A few documents in a real property transaction require the seal of a notary public, therefore most attorneys and title professionals must by necessity also be notaries. Got that?

Enter the National Notary Association [NNA] and other notary groups who got the idea somewhere - probably from a big subprime lender - that notaries could perform real property transactions. They decided to "pretend" that the closing wasn't a closing at all so they could "pretend" that they weren't breaking any laws. They decided to call these notaries "signing agents" and started recruiting and offering advertising and marketing plans and "certification" courses - none of which had any basis in law or licensure.

This mass marketing and recruitment of notaries started about 15 years ago and has mushroomed to the point where it's not about teaching existing notaries, they actually recruit people to BECOME notaries just because they think there is big money in the real estate business.

So, if you need a notary seal on a few documents, you must be VERY careful that the notary you hire is only charging you to seal the documents and isn't adding "signing agent" fees because many don't know the difference.

Here's an example I found on the notary forum, Notary Rotary:

"What would you charge for signing a set of 1st docs on an out of state land purchase? The signing will be here and the client has all the docs. Travel would only be about a mile."

Now, I'm going to guess that the "client has the docs" means that the homebuyer is already working with an attorney or title professional in the state where they are purchasing the real estate. They are already paying the attorney or title professional to perform the real property transaction.

The homebuyer is simply involved in a remote closing, which means that they are signing documents and returning them to their attorney or title professional to complete the transaction. There are a few documents in the package that require a notary seal. This means that those few documents must be signed before a notary - just those few documents.

States regulate the fees a notary may charge per seal. The fee is usually $2 or $5. So, let's say this homebuyer has 5 documents that require notarization. If the homebuyer drives to the notary's office, the total cost for notarization will likely be $25.

Want to bet this notary will attempt to charge more, and for what?

As I post this item, there are two responses on Notary Rotary. The first implies the notary should charge, the "basement" rate -whatever the means. The second response seems to indicate that the notary should charge for time while the homebuyer reads the documents.

Homebuyer - if you are already paying an attorney or title professional to perform your transaction, review your documents and have them answer your questions before you go to the notary public. Take ONLY the documents that need notary seals to the notary's office. Do not give them any excuse for thinking they are providing "signing agent" services. Really - the situation with notaries is out of control. I know it sounds ridiculous, but it's true.

Be very careful when hiring notaries in a real property transaction. Be specific about services and get a written quote before you hire.

1 comment:

Orange County Mobile Notary said...

I agree. The situation is very confusing. I may be confused myself, too, but I have been approached countless times by people wanting me to do attorney closings in California for out of state property. Well, as I am not licensed as an attorney in any state but California, I politely decline the engagement unless I can act as a notary only. Call me paranoid but to do anything else might be the unlicensed practice of law.