Perhaps the lack of inventory has contributed to fewer deals falling apart, but when Yogi Berra said, “It ain’t over til it’s over,” professional experiences have taught me that he might as well have been talking about residential real estate brokering. Sure, an offer was signed, a home inspection completed, a purchase and sale agreement executed, a commitment letter received and it may look like a deal, but I’m not going to spend that commission check yet. A lot can happen in the last 24 to 48 hours before a closing, and those events can rock the deal boat or even sink it. These last few hours are like the bottom of the ninth inning, so I know it pays to keep Mariano Rivera cool and do everything possible to keep good fortune on my side.
Frann Bilus, an agent in the city, had an occasion last year when a lender who had already committed, uncommitted from the deal the day before closing. Such circumstances are not unheard of even in stronger markets. Kevin McGoff, the sales manager at an exceptionally high volume loan office in the mid-2000s, said at that time his office would be asked 5-10 times a month to quickly close loans for buyers whose lenders had dropped the ball past the point of no return.
Sometimes, even when the buyers have a loan commitment, they still don’t want to close. Once, I called a reluctant buyer the day before closing and discussed how he had no contingencies left. I suggested that he consider closing and if he really didn’t want to own the property, he could immediately put it back on the market. Instead of signing the HUD, however, the prospective buyer signed a $32,000 deposit release.
Closing Time
In fact, if Murphy had a law about real estate deals, it might say that in the waning moments of a transaction, if the buyer doesn’t want to walk from the deal, the seller does, like the sellers who a day before closing told me they wouldn’t be able to close, so they would just keep the home. A short time afterwards, their attorney called me and explained their position. He said of his clients, “These people are [expletive] liars. If they don’t close tomorrow, they’re finding a new attorney.” They closed, they closed good.
Even if the deal makes it all the way to the day of the closing, I’m not ashamed to knock on wood and hope that things still proceed as planned. I spent the afternoon of one scheduled closing figuring out how to get rid of a 50-foot linear stretch of trash in front of the seller’s house. The seller said the city would pick it up three days from now. The buyer wasn’t buying the future pick-up and he wasn’t buying the house before the trash was gone. Final walkthroughs can be that emotional.
Mitch Levine, a top producer at Sagan Realtors, knows what to do on the final walkthrough, a time when he has packed leftover paint cans in his trunk, cleared “exceptional amounts” of dog excrement from yards, and even mowed a few lawns. He’s a pro, the type of Realtor who goes to the final walkthrough armed with tools to break down leftover furniture. If I modeled him on these walkthroughs, I suppose I’d do fine.
No tool, however, could’ve helped Natalie Bassil in the final walkthrough of her Back Bay listing. Awaiting the other agent and buyer, she spied the seller lying in bed. She called out his name several times but he didn’t answer. You know why he didn’t answer? Because, unfortunately, he was dead. Talk about “a real final walkthrough.” The seller may have died, but the deal didn’t. It closed a few months later.
Even at the closing table, I try not look overconfident. I’ve seen a few donnybrooks erupt at that holy table. The most emotional concerned developers, one of whom had told me he would never do a hold-back, he would just delay the closing until the work had been completed, as it was his firm belief that any hold-back money was money he would never see.
Another time I was at a closing at which – admittedly – the lawyers didn’t like each other. All was fine, however, until we reached the usually mundane part of the closing where the buyer was asked if his name was “James.” The buyer hesitated and then responded that “James,” was his “Americanized name,” not his legal name. An argument quickly ensued about which name should be used to sign the necessary documents. When the two attorneys couldn’t reach an agreement, everybody walked out of that closing and went to their next appointment. It took a few hours and cost a few hundred agent dollars, but that deal closed.
Yet, even after several inches of closing paperwork has been initialed and signed, I still might pick a few four-leaf clovers or whisper “kein eina hara,” you know what I’m saying? Ilya Fuchs knows. He’s a top real estate attorney in Brookline who had a deal in which he called the bank to get an update on funding after the parties had left the closing and the number had been disconnected. They were out of business. The loan was not going to get funded, the deed was not going to be recorded, the commission checks were not going to get cashed a few hours later. Oh, the horror! It did, however, close a month later with a new lender.
More than 15 years of brokerage has taught me that the fat lady only sings when you get a call after the closing from the attorney saying, “We’ve gone to record.”
David Bates is a broker with Gibson /Southeby’s International Realty and author of
The Bates Real Estate Blog, www.BatesRealEstateReport.com.
