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What “Closing” Means

When I first got into the business of Real Estate I followed a few mentors. At these meetings, one of the discussions always pertained to the importance of the Closing day. When you’re getting started there’s a lot of information to take in and it’s hard to gauge what’s important and what’s very important.

I always took “Closing” seriously, but after a few years of not only doing multiple projects but trying to improve the speed at which we do business, I have come to a greater appreciation of what the Closing date means.

Getting a buyer or seller across the finish line is a major undertaking.

Any professional that can complete this task is certainly worth their fee. I’ve always believed in respecting and paying Realtors and have even offered a higher rate than most ask if a Realtor can get your deal across the finish line in less than 60 days.

I have found Realtors that can get a sale completed in 60 days, but I have never found one that can consistently get every house across the finish line in 60 days or less. The best part of their pitch is them telling me how they’re going to market and sell my house — only to list it and then have to hear why they can’t sell my house.

I’ve even had Realtors go so far as to say that it is illegal to “sell”any given house, they must only present the options. When I hear this argument I chuckle to myself and think why is this person talking to me as a Realtor. Enough picking on the Realtors.

As a competent professional investor, it’s my responsibility to make sure the Purchases, Sales and Closings happen at the right time in the right place. It is very difficult to get multiple deals across the finish line and as such, I rarely complain to a Realtor and I try to give them every option to finish a deal.

A recent home purchase became complicated at the very beginning!

It was a husband and wife who had purchased the home to rehab it 30 years ago and never started the rehab! When I was contacted about the home the wife was still living in the home and the husband was living in an RV in California. The husband wanted a 30-day Close but also wanted a substantial down payment and time for his wife to move all their stuff out of the house.

He didn’t want to come back from California to make the sale happen. So we made an arrangement that she could sell, give away, or haul away any possessions until the day of Closing. We wrote it in the Purchase agreement that everything left in the house on the day of Closing would become mine to throw into the dumpsters.

We agreed I would pay up to $1,600 in dumpster fees. The husband was concerned that if the dumpster fees went over $1,600 I would chase him to California for the excess. I assured him I was too busy to do that, but made a change to the Agreement that I would be responsible for everything over $1,600 as well.

After insisting on a 30-day Close, the husband called me to ask for a few more days as his wife now needed to find an apartment before joining him in California. We were scheduled to Close on the 24th and she couldn’t get into a new apartment until the first.

I agreed to the change on the condition that he have all of his paperwork signed before we made the change so the only thing we had to do is have his wife sign on the day of Closing and receive the check.

We set the Closing date on the fourth which was a Tuesday at 10 AM. I had a meeting conflict for Monday morning and the first was a Saturday so the Closing would not take place on the first. We had signed all the documentation and were waiting for the Closing day.

At 9:30 on Sunday night, I get a text from the Seller in California asking what time on Monday was his wife supposed to be at the Closing table. I texted him back that it was Tuesday at 10 a.m. as we had discussed and put in writing in the amendment to the Purchase and Sale agreement.

The Seller replied that he had forgotten and said it shouldn’t be a problem. On Tuesday morning very early I get a new text from the seller saying his wife has a surgery scheduled can we push the Closing back to 4 p.m.?

I couldn’t believe he would wait until this time to tell me about the surgery but closing days are tough. I told him I would contact the Title Company and get it scheduled for 4 p.m.

4 p.m. came and we’re sitting at the title company – no wife. At this point, the Seller says he hasn’t reached her in some time and is very concerned about her himself.

Now the risk of surgery is typically small, but if the wife were to not make it through surgery all of our agreements are dead and my deposit money is tied up in the house. This deal would have had to go through probate which could take months. And a whole lot more work.

Finally, good news arrived at 9:30 that evening. I got a call that she was out of surgery and would be able to meet the next morning. She arrived there around 10 a.m. and signed the paperwork.

The lesson is always get to the closing table quickly!

When they asked what time on Monday they were supposed to be at the closing table I should have responded 10 a.m. of course! And then contacted the Title Company and instructed them to do a dry Closing, which means that they would sign the paperwork, then wait for me to come in the afternoon to sign the paperwork before getting a check.

Closings are very important.

— Joshua Dudgeon

Closing is the final step in executing a Real Estate transaction.

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