True Story: My delayed Boulder real estate closing
It’s the night before closing. 5 PM. The phone rings and the Buyer’s Agent is on the line. From the tone in her voice and her first words, I could tell we had a problem. “Dallice, did you get my email?” her voice was strained, stressed and perhaps close to tears.
My heart pounded. The closing was for a listing I have… And that listing is a contingency sale to the purchase of my clients dream house. I haven’t lost a deal in literally years and this one in particular would be hard (read: Impossible) to accept.
She continued: “There is a problem with the second loan, I’m so sorry for the late notice.”
At this time, I was logging into my email and desperately searching for her email, that had come in 30 minutes ago… The explanation that I needed. There it was! I skim read it and my heart rate dropped back down 10 beats. We can work with this. There is no deal breaker here (yet).
So that is what I told the very stressed Buyer’s Agent. Ok… It will delay closing but seems like there is a good chance this will resolve itself tomorrow and we could be on track for closing in the afternoon instead of the morning. I will let the Sellers know and tell them it’s too early to worry.
Let’s be clear here. The difference between this Buyer’s Agent and myself has little to do with experience or demeanor or how we each handle stress. The brain is an amazing organ. It processes info and directs reactions to stress all day long. But science has proven that when we have a situation that warrants an emotional response, it takes time to recover from that… To ramp down the chemicals and dampen the feelings they create. When the next stressful event pops up, that person who has not fully returned to baseline normal, has more of a hair-trigger response. In this case our Buyer’s Agent had a very stressful few days and this event was almost the straw that broke the camel’s back. Plus, it was her job to deliver the message and it was her clients loan holding up closing. All I had to do was pass the message along to the Sellers. So of course the Buyer’s Agent was having a worse time dealing with this than me. Her clients, the Buyer’s were equally stressed out so their reaction was a little less predictable too – Another burden the Buyer’s Agent had to bear.
Besides… I had seen worse! My mind immediately recalled a situation a few years ago that had brought me to the brink of insanity. A daisy chain real estate situation that had made all following deals look like a walk in the park!
Here’s is what crazy, complicated and stressful looks like to me:
An acquaintance of mine was getting divorced. The couple had a property out east that needed to be sold and after some duking it out in court and 2 attorneys fees later, the wife was granted court permission to use me as the Realtor. (Yes, I was fought over in court!). They divorced, she took the house and he took the other stuff. My job was to sell the house so she could pay off debt, then find her a new home.
I put a sign in the yard and listed the big house for sale. Soon after, a man who was “driving by” called me and asked to write an offer. Perfect… Now I had the buyer and seller and negotiations were very amicable. The big house buyer was a delightful and fun Mormon man with a beautiful wife and 4 of the most well behaved kids you can imagine. They had a house in Utah that was fully paid off and he had a job in Colorado which he had been working full time in. His wife was packing up the house and waiting out the school year, then they would move here. A+ credit, little debt, well employed. What could go wrong?
Seller of the big house was less qualified to buy and in our crazy market, it was tough for her to compete, but luck was on our side. I got a call from a client/friend one day who wanted to talk about selling her rental property. I knew from the moment I saw it that it was a good fit for the Seller of the big house. Even better, the Seller of the little house didn’t want a yard sign, open house or anything that alerted the neighbors, so she was delighted when I suggested she meet my Buyer prior to beginning any marketing. It was a match made in heaven and soon enough I had the big house under contract (working with buyer and seller) and the little house under contract (working with buyer and seller).
The little house seller told me she was putting in an offer on an investment property in the mountains. She had another Realtor for this, since it was well out of my area.
In summary, the house in Utah needed to be rented and the family move to Colorado, they needed to qualify for a loan to buy the big house and the sale of that was a contingency for my buyer to close on the little house. The little house was a contingency for the purchase in the mountains. A daisy chain of 4 properties… 2 of which I was managing the buy and sell sides.
One day I get a call from the Seller of the big house. Turns out that just over 3 years ago her ex and herself went through bankruptcy. Enough time had passed so that it didn’t affect her ability to qualify for a new loan, but it turned out that the bankruptcy attorney didn’t make sure the credit card liens against the house were removed after the bankruptcy and now the title company thought they had to pay those off at closing. Oh and there wasn’t enough equity in the house to do that, so the Seller was being asked to bring money to closing to sell the house!
Yes, 2 divorce lawyers missed seeing the liens on the house when they divided the assets! And now the original bankruptcy attorney was nowhere to be found either.
A 4th attorney was hired to fix the problem. The bankruptcy file was re-opened by the court and the lien holders were given the mandatory 6 weeks to object to the liens being removed from title of the big house. They didn’t object and eventually the liens were removed. It was a long closing anyway… And no-one felt it was a delay in their closing at this stage.
The buyer of the big house is 2 days away from closing, packing the truck with the family and pets in a 5th wheel and getting ready to drive to Colorado the next morning. He gets a call from his lender. There is a big problem with the loan. Really… My squeaky clean family with ZERO vices and the best spending habits you’ll ever see in a buyer, has a loan qualification issue? Yes. It turns out that before the buyer was a salaried employee, he was a contract worker at the same company and someone in payroll forgot to change that status on his pay stubs. No-one had noticed up to this point. The lender was now saying that unless you are salaried or have been in this contract position for >2 years, no loan!
The Buyer jumped into action and did his best to get employment verification letters etc, while he and his wife drove their convoy across the mountains the next day. With an unexpected truck issue, it was 1 AM before they reached Boulder. I was waiting. They took up all the parking on the street outside and piled inside my little house, exhausted! I slept at the neighbors house that night. 🙂
At the end of the next day, closing could still not be scheduled because the Buyer needed to supply the lender with a new pay stub (3 days away from being possible) and the verified bank deposit to match.
Here is how the situation looked…
Buyer of the big house and his family were now parked outside the big house and kinda moved in, kinda living in their camper, with the Sellers compassion and blessing.
Buyer of the little house (Seller of the big house) was already moved into the little house, since she had nowhere to go either and Seller of little house was also an understanding and very accommodating person.
Seller of little house decided NOT to tell her agent, title company or seller of the mountain property that the funds were delayed due to the contingency daisy chain issues. Instead she showed up to closing in the mountains, signed the papers and acted like she was not sure why the wire had not come through yet. So guess who they called for an explanation? ME! Meanwhile I was having kittens that this delay would screw up her 1031 Exchange. Yeah, did I mention that complication too?!
I explained that the closings were delayed until Monday at this end so that income verification could be completed Thursday night (tonight) and loan docs completed. Then the wire would reach them Monday, hopefully. I kid you not… They either seemed OK with this or had to appear so because their Buyer had already signed the paperwork for the property and was already camping in it anyway!!!
My parents live in New Zealand. Every other year, we get together somewhere fun for vacation. This year they were stopping in San Diego on their way to Europe and I had plans to meet them there for 5 nights. The same 5 nights that this debacle was taking place over. I had a stand-in Realtor who was struggling to get her head around my convoluted deals and I was a thousand miles away, sick with stress and trying to balance the joy at seeing my parents with the guilt of not being there in person for my 3 clients and 2 doubled-ended deals.
Monday afternoon, I stepped off the USS Midway at San Diego and sat in the car park, virtually attending my closings by phone. Everyone was in the same room, having a great time! Paperwork for 4 transactions was flying across the table. Two hours later my clients all owned the houses they had been living in for 3 days and the wire needed to complete the deal in the mountains, was finally on its way.
I hung up the phone and burst into tears – for quite a while! Two months of stress and some serious obstacles had come to a close. All the clients were happy and grateful and loving toward each other and me. It was a real estate miracle. The daisy chain deal to end all deals.
And so you see…
- Things tend to work out when all parties are focused on the good and have compassion for each other.
- I feel I came of age in real estate that day. I’m OK with complicated deals!
- We tend to see things from a “relatively speaking” perspective. Which means I get to measure complicated things against the daisy chain miracle. 🙂