Here are some tips for agents and consumers alike to help ensure that closing dates are met, loans are funded, and all parties are satisfied.
- Be advised that some escrow companies are adopting a more cautious approach when releasing documents for recording. I had a conversation with an escrow rep who shared that recently a lender sent funds by check (rather than wire) that proved to be insufficient. As a result, this particular escrow company will not release documents to record until there is a wire receipt in hand for the scheduled funding.
- Agents: Consider negotiating and scheduling closings for Thursdays rather than Fridays to accommodate last-minute lender condition requests or funding snafus. As always, avoiding the end of the month is a good strategy, keeping in mind it may cost your buyers some prorated expenses. Most importantly, stay on top of your contracts and remain in touch with lenders.
- Lenders are calling for unheard of and last-minute conditions from even the best buyers with the highest credit scores. Agents are advised to counsel buyers to work with trusted lenders or mortgage brokers in good standing and be easily accessible so these problems remain solvable. Communication is everything. Those who are either evasive with answers or are nonresponsive are signaling with a huge red flag. Pay attention to the signs. Furthermore, advise your clients to be prepared for 11th-hour document scrambles. Ensure they understand the importance of gathering pay stubs, personal financial paperwork, whatever their lender may call for in advance, and to keep it readily accessible. It’s always good to discourage any large purchases prior to closing, too, to avoid unanticipated dings to credit scores.
- Whether working with buyers or sellers, it’s important to keep them informed as to the ever shifting sands of the current market. Don’t make assumptions that tidy deals are a foregone conclusion.
- If the closing date is missed and funds have still not been released, you may be out of contract if an extension to the following day (or whatever mutually agreed upon new closing date) has not been executed and initialed by all parties. Just because your trusted escrow closer says it’s OK to let the closing date slide into the next day doesn’t mean you are not in violation of your state’s contract laws and statutes.
Hopefully, with a little extra attention and vigilance, you’ll be able to avoid the pitfalls of missing that all important closing date.