DEVIL IN THE DETAILS
Why are closings frequently derailed or delayed? Here are some real life situations.
Closing Cost credits.
Buyers want sellers to take responsibility for compliance with government regulations. And for good measure, Buyers request $2,000 in credits on a $620,000 purchase. The request for credit is incorporated in the Request for Repairs or Other Corrective Action form.
$2,000 credit shouldn't be a big deal, right?
But the devil in the details. The credit should be on a separate addendum and it should clearly spell out that it's towards closing credits. Rookie mistake. Addendum was produced. Loan was funded in the morning, special recording in the afternoon.
California contract has section where one itemizes what documents or disclosures are incorporated with the purchase agreement. in this case, the Seller's Property Questionnaire. However, when the contract was given to the lender, said questionnaire was left out.
But the devil in the details. Three days before closing, when the underwriter was doing a final review, she noticed questionnaire was missing. Everything screeched to a stop until that form was produced.
Short sale approval shortfall.
By the time the short sale approval was received after three months, the property taxes for the second half of the fiscal year were due.
But the devil in the details.The closing statement (HUD) didn't reflect the new taxes. The short sale lender negotiator said the HUD must match the worksheet on the Equator system, not the other way around. Any expenses not approved in the short sale approval becomes the responsibility of the seller, the buyer and their agents.
Sellers were trying to have unpaid IRS tax lien discharged, and as such had not expected nor asked for the taxes to be paid by the short sale lender. Unfortunately, sellers' request for discharge was denied.
But the devil in the details. Short sale approval was received and did not address tax lien. Buyers, sellers and agents agree to pay off Seller's tax lien to move short sale forward. But the arrangement needed to be approved by the short sale negotiator since the payoff is seen as contribution.
Have you ever heard of this nursery rhyme?
For want of a nail the shoe was lost.
For want of a shoe the horse was lost.
For want of a horse the rider was lost.
For want of a rider the battle was lost.
For want of a battle the kingdom was lost.
And all for the want of a horseshoe nail.