10 Tips For A Smooth Closing

Leave luck to the lottery, St. Patricks day and horseshoes…

We are often asked how to have great closings, and it truly does take a village.  Recently a mortgage buddy told me there are 1260 things that can go wrong from the time a person starts to look for their home until they close.  I have no idea how he or his company came up with that stat.  I bet it’s more!  There are so many humans using so many programs and hardware that what’s amazing isn’t the little hiccups but rather how often things go right.

But we at Shafritz & Dean are after more than, “we go it closed”.  After all our tag-line is “Everyone Walks Away Happy” and that’s what we aspire to!  Here are 10 tips to those of us serving buyers, sellers and borrowers coming from a guy who has been a loan officer for 10 years (including commercial and residential) and an attorney for nearly 20 now.   Said another way … I am getting old J.

I have always known that a smooth closing, a good closing, includes three things – 1) efficient – 1 hr. or less, 2) funded and disbursed … our friends of the firm want to walk away with their commissions and 3) good chocolates on the table!    The only thing we can do without the help of the lender and the realtors is make sure our chocolate selection is grand and the bowl filled! For the other two items above keep reading….

These tips, which are not the complete list, will lead to a better closing experience for all and they are true whether you close with Shafritz & Dean as we hope and prefer or anywhere else.  [Note: These 10 tips are not designed to address the things which are not related to the closing.  So for example, we aren’t getting into drafting issues or rate lock issues.  Those are your expertise.] 

Tip # 1:  Agents insist on the ALTA Combined Closing Statements (CSS) a minimum of 3 days in advance and read them closely prior to closing – read them for typos, for items on the other side which may impact your client (ex. Home warranty … if you represent the buyer and seller is paying look to see it’s on the seller side), for correct figures, for correct closing cost contributions and yes is your commission correct.  Note that if the Broker name is misspelled on the prelim ALTA, if it doesn’t get fixed it will be misspelled on your commission checks.

Tip # 2:  Pay at Closes and Disbursement Authorizations are great but they must be correct and you have to remember to bring the Earnest Money.  As a young loan officer I often heard agents complain about the gap between the closing and when they got paid.  Now brokers treat agents like clients (as I think they should!) and want to allow them to get their portion of the commission at closing.  Unfortunately, we often find the math is wrong and just as often even the experienced agent forgets the earnest money.  This delays closing and makes it taxing on everyone.  So when you pickup the PAC or DA, make sure you tic and tie it to the ALTA CSS and pick up that EM!!!

Tip #3:  Get a confirmation the attorney has received the contract and the title order from the lender!  Technology is great, but remember: it’s not communication when you send an email, it’s communication when someone receives and responds to your email.  Our firm has a process and we let everyone know that we confirm every order.  We do this to express our sincere gratitude that we have been selected to assist parties and professionals with a closing and to confirm receipt of the order!  I can’t tell you the number of times agents thought they sent a contract or loan officers/processors thought they sent a title request only to have everyone scrambling at the eleventh hour.  Finger pointing aside, if the law firm, doesn’t have the order, it’s not being processed.  So either get the confirmation from the firms who do confirm or contact those who don’t.  No news is not always good news 

Tip #4: Wires … oy vey they drive me crazy part 1 – Georgia law is clear – for funds in excess of $5000 we must have a wire.  Not an ACH, not bitcoins or a promise that the wire is on the way.   Yet, people send ACHs which many firms like ours summarily reject and even those who don’t are left waiting days sometime for the ACHs to show and for the reverse period (yes ACHs can be challenged and reversed) to expire.  Or they want to bring a Cashier’s Check for a large sum of money.  If a client intends to use a large cashiers check, it must be delivered well in advance of closing so that it can be deposited and clear the account  [Yes –Cashier’s check checks can be frozen, have a stop-payment, or be returned, so they must clear the account in advance of closing.] 

For the record, no reputable will accept bit-coins or any crypto-currency for closings.  And while a bag of cash may be legal tender, most firms including ours don’t want more than a small amount in cash.  Too much risk that we may get intercepted on the way to the bank.  [Remember It’s a Wonderful Life and Jimmy Stewart’s uncle losing $10,000 of the savings and loan.]  So let’s make sure from day 1 to day of closing it’s clear that parties need to wire funds. 

Finally, tell your frugal clients that their bankers in attempt to save them up to $25 will suggest they electronically transfer their money.  This is code for ACH and remind them to stay strong and pay the wire fee! 

Tip #5 Wires … oy vey they drive me crazy part 2- Wires are great except when fraudsters get involved and encourage your clients to wire funds to their bogus accounts and encourage law firms to wire proceeds to bogus accounts.  “Stay out of the middle” is the summary from an earlier article on wire fraud, and make sure your clients contact the closing attorney directly for wire instructions and confirm independently they are valid.  One agent suggested that, on no less than 4 closings (all with different attorneys), fraudsters had encourage her clients to send a wire to their bogus account.  News flash… it could be your email has been compromised.  Don’t get in the middle and if it happens more than once consider better email security.

Tip #6: Certain Days are better than others – There are 6 -7 days which I advise my relationships to avoid closing because they are inevitably much busier – believe it or not we’ll close 60% of our transactions on Fridays, the last day for residential refis to come out of rescission and the last calendar day of the month.  Double witching day is when Friday is the last business day of the month, but, for some reason, people like these days. 

Buyers like Fridays so they can move over the weekend.  But if they close Thursday, buyers can have a 3 day weekend. 

Loan officers are ever-cognizant of the last day for refinances to close, and still fund in the same month, after the 3-days right-to-cancel expires.  This is done to minimize the amount of per-diem interest paid for the remainder of the month.  Just close a day or two earlier, and you’ll avoid the rush. 

Finally the last day of the month.  Someone told an agent along time ago it’s better for the buyer if you close the last day of the month and you’ll save money.  This is inaccurate.  You may save having to bring a little less money to closing, but you are not saving money.  Many lenders will do an interest credit up to 5 days so you could close the first 5 days of the month and have no prepaid interest those days.  

My loan officers buddies who close refis the last day of the month… while I love the business it’s got to be the worst day possible to schedule a refi.  Unless your rate lock is expiring, the party is leaving the country for a month the following day and there is no other alternative, avoid scheduling a refinance the last business day of the month.

Tip #8: Who, what, when and where…

Who – make sure the right people come to closing – wife or husband is going on security deed then they have to be at the closing.  Wife and Husband are both on title both need to show up (or provide an acceptable alternative i.e. POA—which must be arranged and confirmed in advance). This causes more delays than are necessary, and delays closing, funding and disbursing a file.

What – In addition to who, we need to know what to bring – two forms of ID one of which is Driver’s License – current license or if no license a current valid passport.   It really surprises me when parties show up with no current license.  They forgot or don’t have one and everyone wants me to make an exception.  Sorry – we live in 2018 where identity theft is real and where people create grand fraud schemes. 

Bring your checkbook because if you have to come out of pocket for a nominal sum (our firm $1000 at most some firms it’s $500) most firms will accept a check to keep things moving.  

Bring anything you think you have scanned to the attorney which might be needed such as the Home Owners Insurance (Declarations Page + Invoice or Paid Receipt), Trust Documents, Death Certificates etc. 

When & Where – Despite our best efforts parties and professionals are not always tuned in for the day and time of closing.  Sometimes they know and decide to come later or earlier. We all have limited bandwidth and if you are an hour late for a closing you don’t just delay the parties at closing by an hour.  It may be that we have closings right behind yours and so the delay becomes several hours. 

Also, once a law firm has more than 1 address it’s an invitation for people to go to the wrong location.  These kind of details need to be confirmed before one party shows up at our Perimeter office and the other at our Suwanee office and we have to wait 35 minutes (without traffic) for the parties to show up in the right location. 

So iron out those details with the firm and with your clients so we end up at the right place and at the right time.

Tip # 9 Make sure the lender and attorney have all necessary addendums.  Many years ago if the sales price changed by going down or a repair had to be made, we could find out at closing with limited delay.  Today, that’s a disaster and it happens – I have received amendments at closing which result in hours or days of delays because the agents forgot to send the amendment to the lender and attorney.  So once you amend the original contract and every time you do so, please make sure the lender and secondarily the law firm receives any changes.

Tip # 10 We are dealing with people; when you know people are difficult or their situations are difficult let the law firm know.  Husband and wife hate each other and will be getting a divorce, it’s a good idea to share this in advance with your friendly neighborhood attorney.  The worst shouting ever at my closing table has been husbands and wives (or exs.) who are screaming at each other while the rest of us look for the closest exit. 

How about the dreaded “reader.”  That person is guaranteed unless the most skilled attorney can work them quicker to turn a 45 minute closing into a three hour closing at best.  What should we do – get them the package prior to closing.  Not sure you have a reader but think you might?  Ask them and explain that everyone including the firm budgets approximately 1 hour for closing and it will take them 6 hours to really read the package.  This will encourage the reader to ask for the package up front and avoid them reading at the table.

Finally one more example we see frequently see are parties or agents who don’t like one another.  If we know up front we can separate parties.

Push them to be at the closing at the same time just in different rooms because when parties schedule different times even when they aren’t at odds there is more room for problems and delays since one party may not discover an error even in their favor which the other party finds later that day.

So, there you have it… a “top ten” list that, if followed, will guarantee smoother and happier closings!   

Together Is Better

Shouldn’t we all be on a quest to improve?  I often say that, with all the books on leadership, marketing, management, etc. that I read, and seminars I attend, one day I am going to be smart and successful.  I’d like to share with you a book each newsletter I have recently read which I think has great value to you.

My first review is a little nugget called Together is Better by Simon Sinek.  You may have heard of Simon, who wrote Start with Why and Leaders Eat Last.  This fun little picture book is chock-full of great wisdom, advice ideas, inspiration on why all of us are better than one of us!  We all are part of teams and many receiving this book are leading teams.  You can read (and reread this book) in under an hour and every time you do you’ll be inspired to be a better teammate and lead a better team.

This short story includes “a little more” from Simon.  It’s nothing like his other two books which are more challenging reads.  It’s fun, worthwhile and takes you on the journey with 3 friends, kids on a playground, who overcome obstacles working together and playing to one another’s strengths!
So much great content in such an easy book but perhaps the soul is summed up on page 96 & 97 when Simon says,

“Failure we can do alone.  Success always takes help.”

Let me know your thoughts on the review and the book if you choose to pick it up.  And, remember, we want to be part of your team and help you and your clients be successful.

Review and opinions of this book are strictly those of Richard Shafritz.

The Nest In Kennesaw

Matt Schuurman’s Favorite Spot In Kennesaw

One of my favorite places to meet with new and existing clients is The Nest located on Cherokee Street just outside Downtown Kennesaw.  If you like Bar-B-Que and Beer The Nest is a great place to go.  Their Brisket is fantastic and their sides are out of this world (Personally I love the Mac and Cheese and fries).   They have great Nachos as well, and the half order is plenty for 2-3 people.  As good as the food is the beer selection is even better.  They have 48 Taps with a rotating selection of Craft Beers, many of which you will not find any where else in the area.  They have a large selection of IPA’s, Sours and ,my personal favorite, Stouts.  The taps are constantly being updated as well so you get a great variety, no matter what your tastes in beer you find it at the Nest.

The Nest is divided into two sections with a large deck between them.  While the full menu is available throughout the restaurant, one side is primarily a dining area which is great for sit down meeting over lunch or dinner.  The other side is the bar area which has a great atmosphere and a hand crafted bar top.  Perfect for a more casual meeting over beer or wine.  During the spring and summer the outdoor deck is a great place to hang out either with a client or with your family, the deck is pet friendly so you can even bring the four legged members of your family.

The staff is friendly and very knowledgeable so if you feel overwhelmed by the large selection of beer, they can steer you in the right direction.

Get To Know Matt:

Matthew Schuurman is the managing attorney for the Cobb offices of Shafritz & Dean.  He works primarily out of the Kennesaw office but spends a good bit of time at the Marietta office as well.  He’s  working on growing our business in the Cobb County area as well as our presence in the community. He also works behind the scenes clearing title and resolving issues so that your closings go smoothly and efficiently.

Part of his responsibilities include creating new relationships as well as maintaining our existing relationships within the real estate community. In the course of doing this he spends a good bit of time networking and creating relationships in and around the Kennesaw/Acworth area.  Let him know if you are in his area and have time for coffee!

Love… it’s not just for Valentine’s Day…

As we celebrate Valentine’s Day, we thought we would share some thoughts about loving you—our friends of the firm!

We “googled” the idea and lots of things came up (not all appropriate for this article J) but I think it begins with the fundamentals:

  1. Love what you do, and the people you do it with and for! Our team is committed to that principle, and the reverse side of our business cards state, “Everyone Walks Away Happy”!  When you care deeply, just “getting it closed” simply isn’t enough.  It can’t be faked and everyone who takes the time to read this knows that long term if you don’t love it you will stop caring.  Now celebrating our first decade in business, Doug and I were best friends in law school and we go to work thinking how we can make our practice better and serve our “friends of the firm” daily.
  2. Love the challenges your career presents! Whether you’re an agent, loan officer, owner, broker, builder, or just happen to be in another field reading this article, you will have challenges. If you’re in real estate and don’t enjoy solving problems, then it’s time for change!  Do you embrace the challenges and solve them, or do you let them defeat you? Go back to #1 above and if you love it, you’ll find a way to conquer any obstacle.
  3. Love the great moments, celebrate them and be grateful. Life may have challenges, but there’s so much more than turning lemons into lemonade.  Sometimes, it’s about knowing that you have lemonade right in front of you.  We all have moments of victory, and we should celebrate the feeling of joy that comes from them and the satisfaction of a job well-done.

In an effort to ensure we provide you with valuable content I want to share an article from Entrepreneur Magazine about the top 10 ways to make your client happy (along with quick thoughts from our firm).

  1. Call your clients regularly (Who knew? People still love real connections!)
  2. Create valuable content (Learn something new and relevant, and share it freely. We stay up-to-date, and share what we learn teaching CE (continuing education) classes several times each month.)
  3. Become an authority in your field (With 7 real estate attorneys averaging over 14 years of service … we are here to help our friends of the firm and their clients.).
  4. Reply to your emails promptly (If this isn’t the greatest challenge for all of us, then what is? We expect promptness but we all get hundreds of emails daily.)
  5. Be decisive (Twenty years ago, Home Depot founders Arthur Blank and Bernie Marcus taught me this when they said it’s the key to success…. Check out their book Built From Scratch.)
  6. Value your client’s point of view (Practice empathy, listening and understanding.)
  7. Add a personal touch. (Let those you work with know you appreciate them as people, not commodities.)
  8. Be realistic and do not over promise. (Under-promise and over-deliver.)
  9. Identify opportunities proactively. (Identify ways for your customers and clients to grow.)
  10. Be clear and transparent. (Set expectations, recognize any shortcomings or mistakes, and proactively make corrections.)

We think today is an a wonderful opportunity to share with others how you feel, and let then know you love them and are thankful for them!  Thanks, we love your support, and we wish you all the best in ’18!

2018 Tax Law Changes

Good news overall for real estate and mortgage pros in Georgia

Change is never easy and we can certainly debate the tax law reform on many levels but for our industry and specifically in Georgia for real estate we believe everything will be okay!

Here, let’s not try to provide a comprehensive analysis of the changes to our IRC but rather focus on those key areas which impact home buying and lending decisions.


Capital Gains Stay the same

One big concern and misunderstanding surrounded a major benefit to homeowner’s on under the tax reform in 2018 –

Previously an owner could exclude Capital Gains on their primary residence if they lived their 2 out of the last 5 years. There was talk and I was concerned they were going to make it 5 out of the last 8 years. While not catastrophic it would have done nothing but hurt our industry (even if it were a minimal impact).

For some this exclusion is a reason to move every 2-5 years. It would have more than doubled the minimum from 2 to 5 years resulting in fewer sales.
Note there was not change to the exclusion of up to $250,000 for individual and $500,000 for a married couple filing jointly.

Mortgage Interest goes down from $1,000,000 to $750,000 but…

We’re not San Diego, Seattle, Washington, Boston, NY etc. where the home prices for so many are well above the $750,000 mortgage limit. In the Atlanta metro counties, where the median price of a home is $300,000 or less in most zip codes, a $750,000 loan goes a long way for the average homebuyer.

Psychologically some higher end customers may change their buying habits but I doubt it. Are you really going to avoid buying that $1.2M home for example because your 80% loan of $960,000 leaves you unable to write off the last $210,000 of interest payment. Of course some might but most will recognize that the lower overall brackets leave them quite capable of making their dream home come true. Finally on this matter, keep in mind the limit was already $1M and there were still the wealthy who were not deterred.

One thing to keep in mind and do some research on is home equity lines and junior debt. It’s my understanding from our research that this type of debt may not allow for interest deduction. So for you loan officer who like to do the piggy-back financing, make 100% sure you are not hurting your borrowers.

Income taxes and property taxes will be the one area to really watch.

Georgia does have both a state income tax and property taxes as we all know. Compared to many states our taxes are low but with a $10,000 cap on these deductions, expect some of us to be disappointed how quickly we hit the limit. If there is any good news, the bump in the standard deductions and the lower tax rates should hopefully mean we don’t get pinched to badly. However, certain states with high tax brackets such as California 13.8% and Oregon 9.9% could really feel the effect. We all know that home values and property taxes are not low in these areas either.

Honorable mention item:

Moving expenses will generally no longer be deductible (though apparently there will be some exceptions for those in the military) if the new workplace is at least 50 miles away from the old home but I just can’t see people electing to be stuck in home far from a new job because they don’t want to pay for moving expenses in the event their employer won’t foot the bill.

So our industry (at least in Metro-Atlanta) it seems will dodge a bullet with changes to the Tax Code. Also, with the strength of the local and national economy, recognition of Atlanta as an attractive and desirable destination for employers to relocate to and those seeking employment, low interest rates still in place and finally reasonable compared to other big cities in the U.S. get ready to have your best year to date in ’18.

Source: https://www.nytimes.com/2017/12/16/your-money/tax-plan-changes.html
Not intended to substitute for consulting your tax accountant.

Understanding Your Loan: Additional Information Can Be Important


Page 4 of your Closing Disclosure is important. It is NOT just standardized form information that is identical for every loan.

Review these terms:

  • Assumption: can this loan be transferred to another person if you sell or transfer the property?
  • Demand: can the lender require early repayment of the loan?
  • Late Payments: what penalty, after what period, applies?
  • Negative Amortization: does this loan schedule or allow payments that do NOT fully cover the interest due, resulting in increased loan principal?
  • Partial Payments: what is THIS lender’s policy?

You should also review Escrow Account details to understand whether you will pay additional property costs via regular Escrow Account payments or handle them yourself directly.

Understanding Your Loan: Cash And Transaction Summaries


Page 3 of your Closing Disclosure will compare cash requirements from your Loan Estimate to your actual final charges. If “Did this change?” is “YES” notes for changed sections should be provided.

The bottom line final “Cash to Close” is the money you will need in-hand in three business days.

If your transaction has a Seller the summary table will show a line by line comparison of Borrower to Seller transaction details.

If there is no Seller you may see a Payoffs and Payments table instead.

Review the summary tables to understand the transaction and your financial commitments at loan consummation.

Understanding Your Loan: Closing Cost Details


Page 2 of your Closing Disclosure details specific closing costs.

Section A includes: Origination charges collected by the lender Origination fees paid to brokers, loan officers or other parties and Discount Points – prepaid interest. These figures should match your original Loan Estimate.

Section B covers services for which you could NOT shop. The total of these should be within 10% of the total from your Loan Estimate.

Section C covers services you could shop. If you chose providers from the lender’s written list, costs should be within 10% of Loan Estimate. The set of services you can shop may vary on different loans.

The Recording Fees in Section E should be within 10%; other costs in E, plus F, G and H, may vary from your Loan Estimate without tolerance limits.

This page will also break out the costs YOU will pay, before or at closing; the costs the Seller will pay, any costs paid by others and any credits from your Lender.

Understanding Your Loan: Closing Disclosure Page 1


The first page of your Closing Disclosure documents:

  • The Loan Amount – the total you will actually borrow
  • The Interest Rate – which does NOT include the fees factored into the APR on Page 5

If this loan has a penalty for pre-payment or includes a balloon payment Page 1 will summarize the terms.

Projected Payments will show the chief cost components – Principal & Interest, Mortgage Insurance and estimates of your Escrow Payments over the life of the loan. You may see different columns for different periods if changes in terms such as mortgage insurance change payment totals.

Closing Costs summarizes your loan closing expenses, and Cash To Close adds the additional amounts due to give you the cash balance you will need in 3 business days.

Your Rights And Rules For Closing Disclosures


The Closing Disclosure documents the actual terms of your loan transaction. You should receive it no later than 3 business days before consummation. It must be in writing – paper or digital.

If the loan terms or costs change prior to consummation, your lender must provide a corrected disclosure AND an additional 3-business-day waiting period until loan consummation.

Waiving the 3-day waiting period is only permitted in certain circumstances, and only when the waiting period would cause a bona fide personal financial emergency.