Timing the Closing

A whole lot of what I do reminds me of the work done by a Midwife.  Babies get born when they are ready to be born and not a minute before.   Real Estate deals close when they are ready and not a second before.  The closing date in the contract is a target and not an absolute.  Things happen, almost always with the lender, that keep deals from closing on time.  I am going to say that somewhere between 10% and 20% of my deals have slippery closing dates.

When I am involved in negotiating a deal, one of the things I look at is the proposed closing date.  Lots of agents will suggest a Friday closing.  I will change that to a Wednesday, if possible.  The reason is because the most common way that closing dates slide forward is that the lender needs another day or two to get the documents drafted and delivered to the title company.  If the closing was supposed to happen on Wednesday and the lender needs another day, that means that the closing will happen on Thursday.  If the original date was a Friday, absolutely nothing is going to happen before Monday, which leaves the parties to wander around over the weekend.  

I have seen some pretty unhappy consequences flow from parties being left to their own devices over a weekend.  I just had it happen which is why it is so fresh on my mind.  It was my listing.  The Seller lives out of town.  The documents had to be shipped to the Seller.  The lender, a small local bank, knew that it was an "away closing", but did not get the papers to the title company in time for the documents to be sent out prior to the contractual closing date.  The sale was originally supposed to have closed in December.  The lender asked for an extension of two weeks, saying that they needed until last Friday to be able to get the loan package put together.  When a lender says stuff like that, you accommodate the lender.

An "away closing" takes at least 2 full days and sometimes more.  My client, the seller, got the papers Friday morning.  He was able to get all the papers executed and back into the hands of Fed Ex by noon on Saturday.  The papers were delivered to the title company this morning.

The Buyer closed on Friday at 2.  About 3, I got a phone call from the Buyer's Agent asking for permission to give them the keys.  Without a Buyer's Lease, legally there was no way to give the Buyer unrestricted access to the property.  There are just too many things that can go wrong to justify letting that happen without appropriate paperwork.

Saturday afternoon, I got a phone call to tell me that the Buyers were in the property.

I certainly understand the Buyer's position.  THEY had signed the papers on Friday.  THEY had left a really large check at the title company on Friday.  In their mind, they just don't see what the problem is.  I understand that.  I have been in that position personally.  But, until the title company has disbursed the funds, the "funding" part of the transaction, the house does NOT belong to them.  It just doesn't.  If anything went wrong, if someone got hurt in the house, if there were any type of casualty loss, if something happened to the Seller and the documents didn't get signed, if the lender didn't give final approval to the title company to disburse the funds...there are just too many things that could go wrong.....