Glass-half-full view here.
First rule, go with your gut. (On the side of caution, that is). Face to face is good, because it provides human factors your mother can't even relay to you, let alone post here. Your mother knows the friend, knows her history, her ways, etc. Hard to hide a lie from a friend.
It's not weird or scammy for the friend (my friendships don't have expiry) to approach your mom about the house, since they practically bought it together. I would expect that, as a courtesy: a "first right of refusal". And it makes sense financially: the original title company has all the older research in their file, and only need research recent encumberances. This will expedite the sale, so entirely reasonable.
OP is in the US. In the US, it would be unusual to hire a lawyer for purchase of a single family home as primary residence. Legal work is done, yes - mostly by the title insurance company. They are self-motivated to do a good job, because they pay legal or buy your house if some unexpected third party shows up out of the blue with a claim. It's part of the consumer protection laws that protect transactions. Because in the US...
All real estate deals are scams
...until proven otherwise. This one isn't special. Human greed is so powerful as to be presumed Remember, America is "the wild west" and California still has a lot of that spirit, despite some urbanity. With all due respect to those frantically trying to protect you from fraud, but the system already does that when you use it in full.
And the system is built on this presumption, and has a system of interlocks to protect transactions.
For instance when your driveway crosses a railroad, they typically charge an annual $500-ish maintenance fee. But when the railroad sells the line, theytry to get people to convert to a one time payment (which they finance). They keep the money and the next railroad has to do the maintenance. Greed.
We hear about foreigners paying $250 for a "title search" only-- that would be a la carte. I've bought those on properties I was curious avout. Buy it from the title insurer you'll ultimately use, since they'll just fold its cost into the title insurance if the sale completes. Title insurance is more like $1000 one-time.
I got a cute $300 check from the escrow company to settle the title search I had prepaid, which was then folded into the title insurance the seller paid.
Buying a US house without title insurance is crazy. Among other things, the title insurer handles many other legal formalities and detail work which you would now have to do yourself. Whoops!
This bundling of title search, title insurance and other recording services keeps everyone honest and gives a fair deal for US homebuyers.
People keep floating the opinion that "surely your friend is trying to trick your mom into bypassing title insurance and escrow" -- you didn't say that, though. I for one really doubt it -- the friend knows perfectly well that Mom is a real estate master, who would never do that. I've bought property from guys I'd trust implicitly with a suitcase full of cash - we did title insurance and escrow, that's just what you do.
I've also bought property from the next guy over, who I think is a meth head. Never a worry because of the system.
Title insurance isn't about the seller. The seller agreed to sell the house. It's about surprises.
Both title insurance and escrow can be done fast if you have a good team. Half-full scenario: that's why friend came to Mom.
As for the three-way check deal, a little weird but I'm not willing to leap forward and call it a check advance scam, for several reasons.
- First, it's both real estate fraud and bouncing checks, each an out-and-out "go to state prison" type crime, especially in Texas. That's a big risk.
- Check21 makes normal checks clear too fast for the scam to work.
- Check advance scams mostly depend on a magic check that takes a really long time to bounce. These are the product of "Nigerian" professionals, a random citizen won't know how to make one. A friend of many years, dealing face to face, precludes any likelihood of that.
- You could moot the entire issue by asking to get paid via wire transfer.
- Mother could walk directly into friend's sister's bank and talk to a banker, boom. There are just too many ways for a multiway check scam to get busted. Equating an old friend with a "Nigerian" scammer is silly.
"Sometimes a cigar is just a cigar." - Sigmund Freud
It may be legit and the secrecy/urgency may have a sensible reason. I bought several properties in secret. Many of the normal delays in buying a home can be expedited, especially if you're an experienced regular with a "team" of title insurers, inspectors, etc. who are willing to hustle because it's you.
So, if the seller is legit, and knows your mother and the biz, the seller may be at your mother's door precisely because she knows your mother has the chops to do this, which she couldn't count on from a stranger.
Regardless, do it full and legal. Period.
Dot all the i's, cross all the t's... Just do it quickly and discreetly. Maybe even discreetly from the friend. That will satisfy the friends's stated requirements.
First thing you (Mom) do is have the title company do the "title search" part of the job. They will often do this for sane cost. You don't even need to tell the friend you are even doing this, and don't mention it until the expected time.
Then you go to the friend and ask for full disclosure of all the facts relating to the property - something they are legally obliged to do in any case farther along in the sale. Write it down at the time, either at the meeting (esp. if that's her method) or afterwards Comey-style.
Any serious deviations between claimed facts and discovered facts, will expose whether this is a scam or not.
Also, if your friend has a big problem with going through the process legit, that too is a red flag. Least: it means she learned nothing.
The profit in a legit deal is obvious: the seller gets out from under a house that's a problem house for them. Stuff like this does happen: A pushy family member who is forcibly occupying the property saying "would you arrest your own kin?" and implying they'll kick out all the drywall if you evict them. A daughter who takes a little too much of the rent check for the property management services she provides. And yes, "I sold the house and now you deal with a stranger" is an excellent way to sever that entanglement.
If it's a scam, obviously the profit is in collecting money for a house they don't have a right to sell, or that has a hidden lein (i.e. They don't own it), etc. Her intent may even be to rip off the title insurer, not your mom.
Best case: useful house. Worst case: the title insurer now has a serious problem. Buying it without title insurance ain't gonna happen.