Potential Snags in a Closing

Posted: January 4, 2008 in General, Virtual Assistant
Tags: , ,

The more I do transaction management, the more I realize just how many snags there are that can hold up a closing.

Glitches And the strange thing is that many, if not most, agents out there do not realize that they are overlooking a potential deal killer. I will give 1 example that I find to be the most prominent. Keep in mind that this is just one example. There are a bunch!

Glitch #1 – HOA Docs

Many neighborhoods are in a mandatory Home Owner’s Association, i.e. HOA. And if you have the seller, then per the Addendum For Property Subject To Mandatory Membership In An Owner’s Association you only have a certain amount of days to get the Resale Docs to the Buyer, or else they can back out of the contract AND get their earnest money back.

Oh no… Now, the typical time frame to get these documents to the Buyer is either 10 or 15 days. Do not mistake that for 10 or 15 days without the either. In other words, you don’t have a time frame of 10-15 days. There will be one number placed in that spot on the Addenda – either 10 or 15.

Now, imagine that you are the Seller’s agent. You get the contract the day that it is executed/receipted (maybe). You now have 10 days from the day after the day of execution to get the HOA docs to the Buyer’s agent. So let’s give you the benefit of the doubt and say that you order the resale documents the same day that you get the executed/receipted contract. Depending upon which owner’s association that you have to deal with this will either be a very easy process, or it will be extremely difficult.

For instance, there is a certain owner’s association here in San Antonio with the initials P.C. It sounds like Flo Bomb. Um, it also sounds like Po Crom. They are horrible. They are a boil on the butt of humanity. They are ridiculously expensive. The employees, at least those who you have to deal with where resale certificates are concerned, could care less about your needs. You really aren’t even allowed to call them. You either order the docs online, or you don’t get them at all. And heaven forbid that you have to call to actually speak to someone. I digress.

But let’s say that you have to order the resale docs through them. You have to do this online. They have, guess what, 7-10 days to get the docs to you. If you only have 10 days to get the docs to the Buyer’s, then this is cutting it close. And Po Crom could care less about your deadlines and woes.

So, you are a proactive agent who ordered the resale docs lickity split (that’s a technical term) – Po Crom immediately jumps on the task (yeah right) – the resale docs get e-mailed to you the day before the 10 days runs out – all is well. Whew! This is best case scenario.

Who here believes that the best case scenario is how things typically work? Raise your hand –

Oh me me me Nooooooooooooooooooooo way! It rarely, if ever, works out that way. Usually what happens is you get the contract a day or two after it’s receipted, you forget to order the resale docs for a few days (if you even knew about this escape clause, as it were), management companies like Po Crom take their time to get you the docs, and you pass the deadline, thereby causing you to sweat because you now know that the Buyer can back out of the contract AT ANY TIME that they’d like.

That’s scary, isn’t it? This is just ONE of the myriad of snags that can kill a deal. And I am seeing more and more Buyers become aware of this escape clause. What’s more – they are using it! So be careful when you represent the Seller and they are in a mandatory owner’s association. One forgetful moment could cost you thousands of dollars. Or what you could do is bring the deal to me, charge your Seller a transaction fee that pays for my services, and have me worry about all the details so that you can go out and do what you do best – generate more business!

Hmmmmm…

Dustin….

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