As we enter the “spooky” season, scarier than Freddy Krueger, scary surprises, leading to anything other than “everyone walks away happy” at their real estate closing.
Agents, Loan officers, Parties and Closing firms can do much to avoid Frightening results at Closing. Today, we want to share 5 easy tips for all to consider regardless of the attorney, Agents, Loan Officers involved in A Closing. These tips apply Across the the industry. Do these 5 things and you have Much Better odds of avoiding a Monstrous closing.
Tip #1: Maybe some “see Dead People” but most of us don’t communicate with ghosts
Take-Away – Emails (and for that matter Texts) are like talking to ghosts. If there is no response on the other end, you haven’t communicated. Proving you sent an email might clear your conscience but won’t solve the problem and prevent a delay. Insist on a response and if you don’t get one follow up early. Unlike talking to ghosts, make sure your partners and vendors are really communicating with you.
Tip #2: That Hairy Werewolf will Get you every time…
Translation: Failing to do the right due diligence every step of the way is how the hairy deals Bite us at the Table. When we start with a borrower, buyer and a Seller, we need to know everything that could impair title, cause qualification problems with the loan prior to the Day of closing. So go hard early with loan approval and title work and always check in with one another early to address possible problems, below are a few common ones:
One Seller – Two on Title = Possible dead person in immediate back chain.
Tax Deed = Seller you represent may or may not have authority to sell.
Open Equity lines really scare Title insurance Companies and every effort needs to be made early to find the lender and obtain a cancellation.
Of course there are lots of examples of challenging situations for all of us, divorce, bankruptcy, etc. and we just talked about a few but the key is to deal with them early!
Tip #3: When the master thieves in oceans eleven made off with the big diamond at the Casino, every Detail was known and committed to memory.
Translation: The Contract and the Federal Lender Requirements must be known by all professionals and conveyed to the parties.
We, along with the agents and lenders have to know every detail and make sure the “rules” and the deadlines are adhered to. If your are the agent, don’t be a Day late on a Deadline! The other side doesn’t have to be nice and extend (unless the contract allows for a curative period). Example a Day Late for loan application or due diligence per the contract might cost the buyer their Earnest Money. Another example, If you are the Lender, Attorney and even Agent for the buyer, under CFPB, You have to know the last day for the three days prior to closing to Get out the CD to the borrower. Lenders can’t make an exception if the closing is governed by Tila/Respa … so it’s up to the people – loan officers, processors, closing firm staff and even agents to make sure the rule is adhered to.
Tip # 4: Scared of the Dark? Take Inventory of the surroundings before you turn off the light!
Translation: Don’t Get to The Closing Table without reviewing and correcting everything you could see if you just looked at the Final ALTA and/or CDs.
Law Firms, Realtors and Lenders (and parties) – Check the final ALTA Settlement Statement (or HUD-1) and make sure Lender and Law firm have the Names, Zip Codes, Dates, Bottom lines, Vendor payments etc. correct before we are sitting together at a closing. It may seem like no big deal but misspelling a last name by a lender (even if an Attorney has it right) can lead to an extra hour at the table – the lender to create a whole new package and some are faster than others. Heaven forbid we missed a Fee to the buyer Borrower requiring more money, now we are talking about going back to underwriting.
Tip#5: Where, When and Who is always important in any horror or suspense film.
Translation: Where, When and Who (and I’ll add one more What) is just as Important the Day of closing!
Where: Unfortunately, once you grow and have two offices (or More) for closings, murphy’s law says one party will end up at the wrong office unless the location is clear and conveyed to all persons. We want the parties to be happy and the professionals to shine, and when they go to the wrong office, that’s stress that should have been avoided.
When: Make sure Everyone is on the same page too with date of closing and time!
Who: Seems easy enough but it’s not uncommon for the Seller or Borrowers on a refinance to think only one spouse has to be at closing.
What: What is needed for day of closings: Funds – anything over $5,000 requires by GA law a wire, so Parties required to bring funds need Good Wiring instructions and to avoid tragedy should search for a valid Phone number for the law firm and confirm the instructions with the firm. What else? Valid ID – A closing can’t disburse without that valid ID no matter how well or unknown to agents and lenders the parties may be. To protect everyone from Fraud (scariest thing to all of us), we have to receive and review the ID!
So there you have it 5 easy tips which should allow us all to walk away happy from the closing table even on Halloween or for all of us Even Scarier, A Friday falling on the last business day of the month!