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To Be There or Not To Be There? That is the question!

By John Bethell

Title Insurance with John Bethell Title Company, Inc.

September 04, 2008 09:58 PM

I am continually perplexed by the increasing number of Buyers and Sellers who find it "inconvenient" to make time to attend their real estate closing. Yes, you can appoint an Attorney-in-Fact or do a mail out but it's not the same as being there. I just don't get it.

A sale or purchase of a home is an important event in our lives. Most of us are only going to do this a few times. Why would you not allow yourself the opportunity to clearly understand all of the details and commitments that take place? In the current financing environment, deals are always changing at the last minute to satisfy the Buyer's loan underwriter, the "response to inspections", or increasingly the Seller's short sale lender. When trying to understand a change, there's no substitute for looking someone in the eye and both of you knowing that accurate communication is occurring.

Your full attention is required. Today! Now! Not a year from now when you're doing your taxes only to realize that something on the closing statement is different from the way that you remembered it. Not next spring when you get your real estate tax bill and its gone up 50% because you didn't file your homestead exemption as we remind everyone to do several times at closing; after which your Attorney-in-Fact signed a couple of documents acknowledging that advice. Not when your water heater breaks and you realize that you never got that Home Warranty contract you'd talked about. Avoid these unpleasant aftershocks by being an active participant in your closing!

Certainly there can be personal circumstances that prevent your being at the closing. If that's you, brief your representative about your understanding of the transaction and the details of your financing. Try to be available by phone at the time the closing is scheduled to take place. Then as soon as possible after the closing, review all the documents that your representative signed on your behalf. Delegate, don't abdicate your authority.

Do any Realtors® or lenders feel the same way or differently? Please leave a comment.

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Ellie McIntire

Ellicott City Clarksville Howard County Maryland Real Estate - Ellicott City, MD

Luxury service in Central Maryland

I guess everyone is just a little too busy! I have not had buyers not attend, but sellers have taken care of the details via mail.

Sep 04, 2008 10:13 PM

Carol Knott

RE/MAX The Woodlands & Spring - The Woodlands, TX

I think sellers often have to close without being physically present at the closing and most times, it is fully understandable. I do not like to close without the buyers present. Too many things could go awry.

Sep 04, 2008 10:13 PM

Tom Davis

Harrington ERA,DE Homes For Sale, $$ Save $$ Buy Today ! - Dover, DE

FREE Delaware Homes Search!, $$ Save $$ - Find Homes! Delaware Realtor

I agree that people are just too busy...I don't get it either!

Thanks,

Tom Davis

World Class DE Realtor

Sep 04, 2008 10:30 PM

Dale Terry

Yadkinville, NC

Agents tell their sellers not to attend closings for fear that having both the sellers and buyers present at the same time may cause problems. I for one ask them to attend.

Sep 04, 2008 10:31 PM

Chip Jefferson

Gibbs Realty and Auction Company - Columbia, SC

I think for people that have bought and sold a few homes its not as important to them as it is for the first time buyer. Its crazy to have someone else sign for you.

Sep 04, 2008 10:54 PM

Dave Wirsching

Community First Abstract - Blue Bell, PA

Its either we've somehow cheapened homeownership to the point that most people don't take it seriously or take it for granted.

Or we, as a country, have done such a poor job in education that homeowners and potential homeowners are so overwhelmed by the process and details that they "check out"

"It's too hard to understand, I'll just trust everyone to take care of me."

VERY dangerous in an industry that is loosely regulated with effectively no oversight. As current events bear witness.

Sep 05, 2008 08:34 AM

John Bethell

John Bethell Title Company, Inc. - Bloomington, IN

Thanks to all for your thoughtful comments!

Ellie: In most transactions the Seller's risk in not being there is contained to just a few closing statement items and hoping the deed isn't recorded until the proceeds check is cut. If the Seller is contributing to the Buyer's closing costs and the fees are getting moved back & forth from each side of the HUD-1 trying to get approval, they'd better be paying close attention. If the Seller is selling short, they almost have to be immediately available, if not actually there.

Carol: Yes, lots can go wrong when the Buyer is absent and has not appointed an Attorney-in-Fact! Delays frequently happen due to the dynamic nature of the current mortgage financing environment.

Tom: Is it too busy, or mistaken priorities, or a belief that you and I are "looking out" for them?

Dale: I don't want problems at the closing table either! We often accommodate the Buyer and Seller at different times, occasionally in different offices.

Laura: I remember one deal with four buyers, none of whom attended - they sent their 75 year old grandfather as their AIF. The deal was a sub-prime first mortgage with a piggy-back second. It took nearly two hours for him to sign everything. I wasn't sure he'd live. One of the Buyers calls me a year later. She says her loan was supposed to be a fixed rate, not an adjustable and that I should've known that. Go figure!

Dave: Thanks for your thoughts. I checked your website and it looks to me like our companies share similar values. I wouldn't say that we've cheapened homeownership. I think a lot of the same Pollyanna - things will work out - don't pay attention to that man behind the curtain - dynamics and decision making that made it so easy to buy a home until last year are at work in this situation too. Exceptionally dangerous! There are so many competing fiduciary and ethical responsibilities of all the parties. People need to be involved.

Regards, John Bethell

Sep 05, 2008 09:42 PM

Cindy Marchant

Keller Williams Indy NE 317-290-7775 www.marchantteam.com - Carmel, IN

"Cindy in Indy" , Realtor, Fishers Real Estate

I have seen sellers do this fairly frequently, but not buyers very often. Our Title Company requests that we get the deed and vendor affidavit signed by the sellers at least as much as possible. I typically always get a chance to go over the settlement statement with them prior to the close. So, I suppose there aren't many more documents for them to sign..maybe that's why I see it with sellers so much more.

Sep 06, 2008 02:48 PM

John Bethell

John Bethell Title Company, Inc. - Bloomington, IN

Thanks Cindy! Its not so much that folks don't attend the closing as much as the lack of mental engagement in the process that frequently accompanies the absence that I don't understand. Actually, if nobody came, and it was all done in Escrow, my job would be much easier.

Regards, John

Sep 06, 2008 09:10 PM

Brett Mumaw

RE/MAX First - New Albany, IN

Your Indiana Move

I've only had one person not attend. It was a buyer who lived in Portland, OR and was moving back home to IN. He had to stay and work, but his mother came as his POA and we called right after it was over. I really felt bad for his mom. She had to sign everything for the lender as the following: "Her name signing as power of attorney for her son's name". Needless to say, it was a long closing!

Sep 08, 2008 02:58 AM

Scott Hoen

Carson City, NV

Carson City Clerk Recorder / Public Administrator

The frustrations are becoming more frequent and I believe we are moving to online closings with electronic signatures at some time when the market catches up with it. Refinances or home equity loans are moving in this direction. Electronic signatures with transaction platforms are moving this way. People want to take the time to read the closing documents and why not -- let them read the documents prior to signing at their convenience

Sep 08, 2008 05:15 PM

John Bethell

John Bethell Title Company, Inc. - Bloomington, IN

Brett & Scott, thanks for your thoughts.

Brett, those situations do make for LONG closings. Hopefully your client's mother was briefed about the details of the situation so she knew the documents were in fact correctly prepared.

Scott, that certainly is possible. Several things have to happen first, though. Lenders need to figure out how to finish underwriting the loan and preparing the closing package a bit sooner than 2 hours before the scheduled closing. I fear that e-closings will further compress time frames, not lengthen them. Much in the same manner as overnight delivery, faxing and email packages did over the last 20 years. There are always going to be paper documents in most locals. When paper docs are mixed in, most of the convenience of electronic documents for us and the borrower is lost. Right now, I see very little advantage to e-closings for anyone other than the lender, but that's another post. Also, I just don't see the 1960 different county recorders in this country agreeing on a standard platform for electronic filing of documents. Anyway Scott, you've given me several good ideas for new posts. Thanks!

Sep 08, 2008 10:31 PM

Anonymous

Dan Williamson

I am always amazed at this kind of behavior. I get that in my business as well. It's like people don't have time to save themselves money or trouble down the road. My home is the most expensive thing I have ever bought. You bet I want to be there to make sure I am not getting shorted anywhere.

thanks for your insights.

Sep 09, 2008 04:42 AM

#13

Liz Moras Migic

Chilliwack, BC

Chilliwack, British Columbia - Realtor

not necessarily a comment on this post - but didn't want to say i read your comment about the 'telepathy upgrade to windows.' and thought it was a riot..........so wanted to check out your blog. I see you're new - so welcome! You're going to love it!

Sep 11, 2008 04:11 AM

Charlie Holloway

Equity Land Title - O'Fallon, MO

Good point John...

Seems we have come to a day and age where sellers just don't care anymore. I think a lot of times they may be more frustrated than they used to be because their house was on the market longer than they thought or they had to give up a piece of personal property to "seal" the deal.

Us in St. Louis run deal with a completely different market, we have split closings where the buyer closes at title company A and the seller closes at title company B and the buyer pays for title insurance. Things are very different here.

My parents who live in Denver though just recently sold there house and didn't want to go to closing, I was floored to be honest with you. My mom said it would be just too hard to let go of the house that they lived in for 30 years.

So it may be that the sellers don't care or that they don't know how to deal with closure.

All in all I still don't understand it and REALTORS should always advice THEIR clients to be at a closing.

Sep 15, 2008 10:26 AM

John Bethell

John Bethell Title Company, Inc. - Bloomington, IN

Thanks all for your thoughts and kind words.

Dan, it certainly doesn't make sense, does it.

Charlie, when I worked with First American, I thought that St. Louis had to be one of the most convoluted and difficult title markets created by man - sounds even worse today! Split closings at different title companies? How do you handle the money, let alone last minute closing instructions? Good luck to you.

Liz, one of the best features of "Telepathy for Windows 2.0" is that it interfaces quite well with the widely used "Do What I Mean, Not What I Say" encryption software.

Sep 15, 2008 12:54 PM

Charlie Holloway

Equity Land Title - O'Fallon, MO

It gets tricky if I have the buyers and the other title company has the sellers we simply wire the funds and hope it goes out before our wire cutoff. Last minute closing instructions aren't all that bad the agents have gotten smart and try to close either when the buyers close or shortly after.

Sep 16, 2008 03:30 AM

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