My worst closing example is actually before I was involved in the real estate market and it was the closing where I was selling my own home.
The Realtor was representing both parties in a dual agency role. (Won't do that again.). But that was not really the problem. As closing approached, she would not return my phone calls and would not provide documentation of lender-required repairs she had authorized (in her name) on my house that were to be paid at closing.
Arrived at closing. She was not there but they buyers were. Turns out the Realtor had been giving them different information about the deal and had tried to get the closing attorney to schedule us at different times "because the buyer and seller could not get along." We'd never met! (ding, warning bell)
Anyway, we get into the closing, most goes okay until we get to the part about lender-required repairs. I had agreed on the contract to pay up to $5,000 on lender-required repairs.
The agent had authorized more than that amount of work on the house (yes, pre closing updates on a house) even though the lender repairs were relatively minor (less than $2,000).
Apparently the agent had "budgeted" and spent the full $5,000 for repairs and updates. (No telling what would have happened if the deal had not closed.) When pressed on the subject, she finally placed calls to the contractor for an itemized invoice.
After a few minutes she disappeared. Did not answer calls, did not return. We're all at closing without having fully disbursed funds and no itemized invoice and no realtor (who has the missing pieces).
The closing attorney tries calling the broker. No answer, not returned calls. Finally after a couple of hours, he gives me a check for the one remaining unresolved amount, $5,000 that is made out to me and the Real Estate agency jointly. Made sense to me, since the discussion remaining was how much of this was to cover lender-required repairs they were going to pay (since the agent was handling that) and the balance was to go to me.
In the coming days, the agent and broker were furious. They insisted that the $5,000 would all go for house updates regardless of the contract clearly noting I would only pay lender-required repairs. When I went to their office, the yelled at me. The closing attorney was on speaker phone and later said he had no idea why they were yelling at me, I didn't cause the problem.
It took weeks, letters, faxes and emails before they met the details of the contract and we resolved it. So, in theory, my closing took 6 weeks from first signature to last.
I understand the agent lost her license not long after that on a deal that was an even bigger disaster and involved forged checks somehow. I know she is not listed with any broker now.
So, what would I do different? As a home owner, I would monitor my agent more closely. Either they are doing things well (and I can learn a thing or two) or I would be able to stop things that are not what the contract states.
I would also do more homework on the agent and the broker before signing. While these came as a referral, I would later hear horror stories about each related to other deals.
The biggest lesson I learned was (1) as a homeowner, it is my deal not the agents and (2) while there are great agents out there, the complexity of the transaction and the number of entities involved in each deal protects the unethical and the incompenent agents and brokers (to the detriment of those that do it right).
In the end, this was a great lesson as I spend time in the real estate world. As with any project or deal, clear frequent communication, transparency of all activity, honesty even if costs a deal, stop a transaction when something is amiss, plan ahead and learn when "no" is a great word.
I'm interested in hearing about your worst closings disasters... and what you think could have been done early to avoid the situation next time. That is, what was the lesson learned.
For example, were documents not ordered, failed communications, wrong property sold, etc.
Please, no names here, just the general issue so that we all might can learn how to spot and avoid the problem you encountered.
Have a great day! Glenn
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