Tuesday, November 24, 2009

Real Life Closing Issue

Last Minute Problems

What can go wrong at a closing? Sometimes when you think you have a “slam-dunk” closing and everything is going great, you get blindsided by a last minute problem.

The bank was selling a lot that they had acquired upon foreclosure of a builder’s “spec” home. It was a cash sale so nothing should have gone wrong. Good title and Good Buyer. Nothing could go wrong.

As we approached the closing date we were making inquires about the water system. This subdivision had a water/well system run by a private company. Upon first contact, the water company was unable to find any records on this property. They would call us back.

Closing day, two hours before closing, they call back and say they now have their records updated and have looked at the situation with this lot. It seems the Builder tapped into that water/well system without permission and, most importantly, without paying the $1800 “tap on fee”! They wanted the $1800 tap on fee or the buyer would have no water.

The bank was innocent. The buyer was innocent. The builder was the “bad guy” in this situation but he was gone, leaving others to pick up after him. Then began a lot of phone calls and conversations about who was to pay the $1800 tap on fee. Buyers wanted the bank to pay; the bank wanted a contribution for part of it from the buyer and/or a contribution from the real estate agent.

Lots of little meetings and discussions at the closing but the bank finally agreed to pay. The buyers were happy and the bank had learned a lesson, maybe. Whenever there is a foreclosure the bank gets what the owner owns, along with possible problems.

Have a Happy Holiday!!

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