Re: So mad I can’t see straight - Posted by JPiper
Posted by JPiper on May 29, 1999 at 12:21:12:
As a preface I first will point out that in the last 20 years I have not done a simultaneous close. No particular reason?..nothing wrong with a simultaneous close. I just have preferred to assign my contract in some cases?.or in others I have closed?.and then at some time later have resold the property. I would add that I don’t happen to agree with some of the sentiments that I hear and read regarding assignments?..that is, the idea that you need to hide the amount you’re making if it exceeds a certain dollar level. To me, what I paid for a property has NOTHING to do with it’s end value?.or whether it’s a good deal to a second buyer. Your ability to put an assignment over has to do with your stance?..your ability to walk away from the negotiations with an assignee and assign to someone else who looks at your deal as to it’s value, not as to what YOU paid for it. I can honestly say that ANYONE who was to bring a deal to me and want to assign can rest assured that I will judge the deal based on the end value to me?.not based on what YOU paid.
Second, I will reiterate what JohnBoy says in his post. You DO have an interest in the property. Your interest is created the instant your offer is accepted by the seller. That interest is called “equitable title”.
Think about the purpose of an escrow. It’s purpose is to collect all the documents and funds from the buyer and seller as set forth in the contract, and make certain that all the provisions contained in the contract are complied with. At the moment when all documents have been executed, all contract provisions complied with, and all funds are available?..the “switch” is made so to speak. Money is handed to the seller, the deed is handed to the buyer. NOTE: the “closings” of the buyer and seller DO NOT have to take place on the same day, in the same room. The “closing” does NOT have to be attended by the parties (at least where I am located). We DON’T have to jockey between rooms. The WHOLE purpose of an escrow is to collect all the documents?..and when this has been done, a “closing” can take place?..with NO ONE sitting there but the closing agent. Again, I describe this according to the locations I have been involved with?several states. It’s possible that there could be local differences.
Think about a simultaneous close. Buyer #1 comes in to close. This can be a time totally separate from EVERYONE else. You execute your documents. You in essence tell the escrow officer “Hold these documents UNTIL the seller does EVERYTHING he is supposed to do?.don’t close until then.” Seller #1 comes in (or mails in) his documents?.he in essence says the same thing. Seller #2 (who is Buyer #1) executes docs. Buyer #2 executes documents. All documents from the 4 separate parties are now held in suspended animation. At the appropriate instant, when all the provisions of the two contracts are complied with and all the documents are in place, the escrow officer closes ALL the transactions simultaneously?..BING, BANG, BOOM.
There will have been a BRIEF period where the deed to the property was switched to Buyer #2 by Seller #2 BEFORE Seller #2 (as Buyer #1) had title. During these few seconds, the escrow agent has complete control of the funds from Buyer #2, and therefore there is absolutely NO risk to Seller #1. Think of seconds here.
I would imagine that the escrow agent would have NO difficulty if Seller #1 deeded a property to Buyer #1and if Buyer #1 excuted a “One-Minute Note” in favor of Seller #1 for the purchase price??a note that would then be paid off seconds later by the funds from Buyer #2 However this is UNNECESSARY since the escrow agent has total control of the deeds and funds involved in both transactions.
Understand something here. In this business you are going to be constantly confronted with issues that make little or no sense. You’re going to be required to deal with these issues whether you like it or not. I’ve found that the BEST way to deal with issues is to ASK QUESTIONS. Asking questions carries some advantages. First, the other person has to talk in order to answer a question?..especially when you ask an open-ended question. While they’re TALKING, you’re LISTENING and THINKING. Questions GIVE YOU TIME?..time to collect your thoughts and formulate an answer or a plan. Perhaps?. “Gee, why do you think this is illegal?” Questions bring out the REAL issues, so that you can MAKE SURE that when you finally address the issue, you’re addressing the REAL issue. I like to ask leading questions??questions that direct the conversation along a line that leads to a conclusion?perhaps a conclusion that is contradictory to the premise of the original issue. “Gee, if this is illegal, why do you suppose that XYZ Title Co. does these types of transactions?” Wait for an answer. “Would it be helpful to you if XYZ Title Co. told you how they handle these?” “Can I speak to the manager myself, so that I can ask some of my questions directly?” “What ways can you think of to get this transaction done?” “Would it help if my attorney called and discussed this with your manager?” “I understand now why YOU think this ‘illegal’. If you knew it wasn’t ‘illegal’, is there a way you could get this tranaction done?”
Sometimes you can’t resolve issues or problems in one hour or one day. Call your other title company. Ask more questions about the process?..they evidently are comfortable with it. Perhaps these questions will give you more information with which to discuss the situation further with the first title company.
Good luck?and remember?.this is what they call experience. Just think, if there were NO problems in this business, everyone would do it.