I was involved in a fairly long and frustrating closing over two days last week that by the skin of our teeth ended up okay but it really spurred my thinking about possible alternative scenarios that may have occurred. Here’s what went down…
Closing had been scheduled for quite some time for last Wednesday but surprise, surprise our Buyer’s lender starts to have problems and reasons that cause delay. So we push closing back to Thursday, no biggie and nothing too surprising to me. Yet keep in mind, this is a short sale and Seller’s lender require their funds by Thursday…they will accept a wire so fine. Closing scheduled for Thursday @ 930am. My clients are signing their loan package locally in another state and Seller/attorney and I are handling sales/title docs here in Chicago. Due to what I’m hearing I KNOW this will be a slow closing so no biggie, I bring other work to do and schedule some other meetings downtown that day which I can handle as we’re waiting on the lender/money.
By Thursday, 2pm my clients are finally able to sign their loan package and their loan processor in FL wires funds up to Chicago title company…alright, all’s well that ends well. NOPE! Wire was sent to wrong recipient account here in Chicago and error isn’t realized until 4pm and that’s the cutoff time for wires, so we’re finished by not closed as of close of business on Thursday. Calls are made and Seller’s lender is okay if they get the payoff funds early Friday a.m.
By Friday I’ve mostly moved on to other things on my agenda and all that had to happen was a wire had to be re-sent Friday a.m., right? Yes, but I still got a call at 1pm, Friday from Seller’s attorney saying wire hadn’t hit in Chicago yet. Well, to bring this lurid tail to an end, wire hits around 2:30pm Friday and payoff wire to Seller’s mortgage holder gets out and then “it is finished.”
But this got me thinking about a couple things:
1. When is a closing closed?
–Is it when all docs are signed? Is it when wire has been sent (and there’s a Federal Reserve tracking #)? Is it when wire is actually received? This wasn’t so much an issue Friday as much as another transaction frankly where I had a psycho client/Seller. Client was a very nervous sort of person to start with and against our advice she opted to attempt to do back-to-back closings on one day. And at her Buyer’s purchase the wire was slow to hit which was going to delay her purchase that afternoon and all her stuff was on a moving truck and…just a combustible situation. So as her Buyer’s delay/wire lingers she’s saying I’m done, we’re not closing. But everything was concluded and all we were waiting on was a wire. And it’s my understanding that a properly sent wire can’t be undone so it’s going to be received eventually. But what if like in my deal from last week it wasn’t sent to correct account and then Seller just rips up all the sales conveyance documents? Leaving contractual liability aside, is that a closing?
2. What if Seller’s lender above wouldn’t accept late payment or what if wire received at 4pm Friday and payoff wire couldn’t be sent until Monday?
–This is what I was really worried about last week. Once we got past the date that Seller mortgagee had agreed in writing to accept payoff, would they balk and say we’re not doing this now? Once my client’s purchase closed then I think their title insurance company would be on the hook for protecting them from anything that Seller’s mortgagee would do since that mortgage and the foreclosure case were waived at closing. But even if Buyer’s are covered who wants to buy a lawsuit regardless. Practically you’d think paying the Seller’s mortgagee a few bucks for the extra day would solve the problem.
Fun times in the real estate market!
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Jul 29 2009
