We are buying a new home and are a week away from closing on the loan. Our loan officer has congratulated us as he has been given the approval to close. Between my spouse and I, this is the 7th home we have purchased over the years. We’ve never had any issues, even in the early years. We’ve both always had decent to good credit scores, etc.
Something that has always puzzled me is that, in every experience, the loan folks always talk about closing as if it’s an iffy proposition, that it’s always touch-and-go, that it is a high-stress thing everyone should be deeply worried about! Frankly, we just have not had any experience in these purchases that gave us any worries.
What gives? Is real estate loan closing actually this dandelion puff that can blow away in the slightest breeze, and we have just been “lucky”?
I’m interested in hearing tales where closing didn’t happen and why. Share your experiences!
I had a scare at closing. The buyer agreed to pay my asking price and was willing to skip an inspection if I was willing to expedite closing. Sounded fine to me. My RE lady texted me a date only a few days away and it was impossible for me to attend.
So…she suggested I sign some papers, one of which gave her “power of attorney” to act on my behalf. Closing was 10 am. I stopped at the office at 3 pm to pick up my check and take it to the bank. But she wasn’t there, nobody knew where she was, and she hadn’t left anything for me. Calls to her cell went straight to voicemail. Oh, and she was kind of a flake.
The head guy was nervous once he heard what was going on. He explained to me that the company had insurance to cover situations like this (!) and offered to call the police so I could start the ball rolling by filing a police report. At this point I’d been at the office for two hours while people there were whispering to each other.
Long story short, her cellphone battery had died and she was running errands. She had my check in her briefcase and I had slipped her mind.
Closings can go wrong, but I think it’s pretty rare. Having gone through quite a few of these myself, the title companies ensure that the Ts are dotted, and the Is are crossed. Banks don’t wait until the last minute to approve your loan; if something comes up, they may postpone closing for a few days to work it out. I don’t think you are particularly lucky, but just average. Join the club.
I closed on a house here locally for a friend of mine who lives in California and had a timing conflict. He drew up the power of attorney paperwork and other documents and all that. When I got to the office for the closing, there was some technical problem with the POE document. While I was on the phone with him, his buyer’s agent showed up and smoothed things over. But, for a while, the closing nearly didn’t happen.
Everything seemed in order. All the bits had been done previously and there was just the formal part of the actual closing.
We got there and, for some reason, the closing agency did a final search for any liens (a search had been done previously by the lender). At the 11th hour they found a possible debt the seller had which could result in a lien. The closing agency was unwilling to close on the property until that had been resolved.
The seller was on her honeymoon in Hawaii and could not be reached. Finally, her attorney who was representing her, consented to taking $50,000 from the closing and putting it into escrow to cover the possible liability. I am sure the seller was not happy to come home and find she had $50,000 less than she expected but, at least for us, the closing was done and we got the place.
Your loan officer is just trying to puff up his/her role in the closing of your new home. Home loans are a commodity and should be based purely on the rate. Your loan officer isn’t some magic guru.
I had something similar happen as a buyer - the closing attorney discovered 3 liens on the house about a week before closing. The sellers claimed they had been paid off, but the lien removals hadn’t been filed correctly, or something like that. Regardless, at the closing the attorney required them to escrow something like 3x the total loan amount that would be refunded to them when they proved the loans had been paid and the liens were lifted - otherwise he would use the escrow to pay them off. The sellers complained a lot, but the attorney said it was that or reschedule the closing for a later date when the liens had been removed. I blew a gasket - my loan approval & rate lock expired in a few days, so I told the sellers that if that occurred I might back out of the deal completely and take back my deposit. They finally agreed to the escrow, which was about 75% of the proceeds they were expecting to make on the sale. I checked into it a few months later when I saw the liens had been removed, and sure enough, the sellers had been lying and the attorney had to use the escrow to pay off all the loans & get the liens lifted.
Funny about these liens stopping closing…My house apparently had a lien on it (I say apparently cuz I really didn’t know, I was 25 and my agent was absolutely wholly trusted), and the existence of it wasn’t a problem. The sellers had promised to pay it, and must have signed documents to that effect and my closing went fine.
About 8 months after I got the house I got a court summons saying there was a delinquent tax lien on my house and I had to go to court to settle it (oddly enough, “Spouse of ZipperJJ” also got a summons but I have no spouse and there was no mention of a spouse in the paperwork for the home. wtf?) I freaked out and called a bunch of people. My agent even talked to the sellers.
Turns out the sellers DID pay the title company and the title company, with all the money we pay them to be the title company, failed to pay the lien. Like, they had one job and they didn’t do it.
It all got settled and I didn’t have to go to court. But it’s still on my permanent record Anyway, this was in 2005 and I was definitely one of those people being sold a shady loan by shady companies doing shady stuff, like not paying liens. I did manage to not default on my mortgage, though, unlike many of us who also bought homes at that time.
A lot can indeed go wrong in closing a loan, and in some jurisdictions/institutions, the loan officer has considerable responsibility in making sure everything goes swimmingly, which means sometimes s/he does have to be semi-magic to get everything coordinated.
For example, the last real estate transaction in which I was tangentially involved included on the seller’s side four co-heirs (not all of whom were on speaking terms with each other), the attorney representing the estate, and the imprisoned spouse of one of the heirs; there was also a Medicaid lien filed by the state’s estate recovery unit and a failed sewer inspection requiring repair before closing, with the original sewer line running under the detached garage (which was a code violation upsetting the title insurance people). The loan officer handled the closing and had to do a lot of the coordination to keep everything on track.
Depending on your jurisdiction’s laws, your spouse may have an interest in the home even without being named in the paperwork or on the title (“dower interest”), so the other side’s attorney wants to make sure to include any spouse that may exist, to avoid future complications. (It’s the same reason a foreclosure notice will name the tenants of the property, even if there aren’t any; the bank can’t be absolutely sure there’s not, and discovering well into the lawsuit that a tenant is in residence whom you didn’t serve who needs to be included means an unnecessary delay at best.)
Neither the seller, nor his realtor, showed up for the closing, but the realtor finally called to say it was because the seller threatened to kill him. The seller’s lawyer handled everything at a later closing.
Not a purchase closing, but a refinance closing: I stopped it.
It was perhaps 10 years ago, with advanced enough technology and practices that the closing attorney came to our house to sign all the paperwork. One of the myriad of items I was to quickly review and sign was a document saying we would pay an outstanding $3,000 or so long-overdue property tax bill for the adjacent lot.
Now, yes, when the developer went to build our house, he did combine what on the plats was two identified lots, but the lower lot wasn’t buildable due to its proximity to a pond, so the developer simply, logically, legally combined the two into one building lot. And it is thus recorded.
But the title company the lender engaged “found” some record of property tax due on the lower lot. I knew our property taxes were up-to-date, so I told the nice attorney (who really was) “no thanks” and stopped the closing.
We refinanced a few months later with a different lender (and now an even lower rate!) and the subject never came up. I have no idea what the other title company (or researcher they engage) found.
The first was kind of a closing. I bought my ex out of the house that we shared. I gave her money and there was a refinance, a title change and an escrow. I told the lender that I didn’t want to have to pay anything at closing and to roll any costs into the loan. The title company were fucking idiots. They gave my ex a check for over $300k in the morning and then I had a 4pm appointment. The paperwork had to be all signed by 5pm.
I get there and they give me paper work and ask for a $3500 check. I blew my stack and said to get the loan people, who had their office down the street, on the phone. We’re on a conference call and I went off on the loan agent she said that she would look at the paperwork and then she lost her shit. I quickly realized that the fault was with the title company. They started the new loan a month early instead of keeping the cheaper original loan until the end of the month. They also had a $500 currier fee to walk the paperwork down the street which the loan officer demanded that they remove.
I turned my ire to the escrow person (an assistant, the actual guy left for the day) and said this is fixed or I walk. They now had like 30 minutes to get it right or they would miss the deadline. I barely even noticed the notary sitting in the corner smiling. When they were off scrambling to get things right, the notary told me that I was awesome and most people wouldn’t have even noticed let alone forced them to change it. Anyway, it got fixed. I called the load agent to apologize and she said that I was right to be furious and she was furious and they would never use that title company again.
Second story. The ex wife took her money and went to buy a new house. This was at the near peak of the housing bubble. She found a cute little place but there were a couple of problems, most notable was a deck that was unpermitted and probably not to code that came up in the inspection. She asked them to fix it, they told her take it or leave it so she left it. Guess what was still for sale a year later at a very reduced price.
We had two. Or three - two houses, three issues. All eventually closed, but it was close every time.
I largely blame our listing agent for this. We were in Florida and selling a house in Maryland. We should have smelled something when every single time we called our agent, she said “Oh, I was just going to call you!” Every.single.time.
The buyer was a single man who wanted the place for him and his mother, but all of a sudden, his mother changed her mind, and he didn’t show up for closing. So we got half of his deposit, and a new agent. The next buyer didn’t back out, but she showed up short of cash, so our choice was to hold a second mortgage or lose the sale. We held the second, and eventually sold that mortgage a year or two later.
Last was when we were selling our house to the couple that had been renting it (not going into the reasons why we had to rent the house.) The agent who’d handled the rental was also handling the sale. He kinda neglected to mention, until the day before closing, that we’d need to show up with about $4K. This after assuring us previously that it would be a break-even closing. We knew we wouldn’t make anything - we just expected to turn over the keys and walk away.
Fortunately, my husband’s parents were able to give us a quick loan, and the deal went thru. But a year later when we were able to buy another place, we definitely avoided that RE company.
The night before the day the sale of our house was supposed to close (at 9am) we got a call from our lawyer saying the buyers’ lawyer had just informed him that their financing had fallen through.
Since we were to close on our purchase the same afternoon this made for a heck of a day where we had to get approval from our lender to carry two mortgages and raise the $100k+ To replace the proceeds we were supposed to get from the sale. By liquidating investments and getting the money wired the same day. Cheers for Vanguard and Capital One, boos for Fidelity and Bank of America.
Our mortgage broker was a champ, theirs was an outfit where one of their employees (a friend of the buyer) was willing to lie to the closing attorney about their approval status so that we wouldn’t cancel the sale and move to the next best offer. I guess from their point of view that was great customer service.
They did close a week later and our attorney said we could claim damages from them for our costs, primarily capital gains taxes from liquidating investments. But we just wanted to get this done and never hear or see them again.
The first property I bought was the top two floors of a building on the south coast of England.
A survey said it was in excellent condition and a (national) mortgage company happily offered the required amount (I had saved enough for a 50% deposit. )
On the day, the mortgage company pulled out. their excuse was:
we just found out that the property has a basement
we don’t lend money on properties outside London with a basement
My local south coast lawyer sprang into action.
He got a replacement offer from a local mortgage company … within 15 minutes.
P.S. I sold the property a year later for a 33% profit.
After my mother died my father moved out of town and left the details of selling the house to the real estate agent. She performed her job admirably, hiring workers and generally making sure everything was taken care of and the house was in prime selling shape. Although the house was in a less than prime neighborhood it eventually sold, my father came back to town for the closing. . . and the buyers didn’t show up. After several days of trying to contact them, they finally informed us that they had “changed their mind” and by the way, could they have their deposit back (no). Eventually another buyer showed up and the house finally sold.
My son and daughter-in-law just closed on a house. A few days before closing, it came to light that, although the seller had promised to take care of a foundation repair, she hadn’t. There was a last minute flurry of negotiations and threats to walk away from the sale (but my son and his wife really, really wanted the house) before a suitable compromise was agreed to, and a new sales contract drawn up.
My wife (just prior to our marriage) had the closing on her purchase of a new house scheduled on a Thursday morning. Unfortunately, the seller passed away late on the Sunday prior to closing. The seller was widowed and nobody had her POA (which, I believe, would have expired with her death anyway). One of the seller’s daughters had to get a certificate of death and then wrangle something with the County Clerk to allow the closing to proceed in just three days. It was touch-and-go, but it all went off without any other hitches.
Anyway, this was in 2005 and I was definitely one of those people being sold a shady loan by shady companies doing shady stuff, like not paying liens. I did manage to not default on my mortgage, though, unlike many of us who also bought homes at that time.
)
