Everyone who has ever bought or sold a house knows about the mountains of papers that have to get signed to transfer a piece of property from one owner to another. Over the last two weeks we have signed about an inch of papers to buy our project home. Having bought and sold houses in three states now I thought that I knew what to expect. Well the differences between states are interesting…
Alaska – for my money the most civilized of the states we have dealt with. With the cooperation of the various realtors, or on your own if you wish, the buyer and seller come to a mutually satisfactory deal. If financing is involved so are appraisers and possibly inspectors. A banker approves a loan and the deal is set for a closing. Usually the seller shows up first and signs the deeds over. They leave then the buyer shows up and produces a cashier’s check for the down payment and other costs and signs the note and the deed (and about a thousand other notices). When the last signature is on paper the keys are dropped into the new owners hand and they take over the property.
Massachusetts – where lawyers call the tunes. Earlier this winter I orchestrated the sale of my mother’s home in Massachusetts. The process starts out in the usual manner with offers exchanged between the buyer and seller until a mutually unsatisfactory deal is arrived at. It is at this point that it gets weird. The buyer and seller AND the financing entity all bring their legal warriors to the arena where they begin to joust. The sellers’ attorney drafts a multi-page sales contract which has a few boilerplate provisions, but which is mostly custom worded for the occasion. This then goes to the other two attorneys who each get to make proposed revisions. The draft goes around and around until all the attorneys have accumulated sufficient hours to make their boat payments. All parties eventually sign the sales contract and then the fun begins. At each stage of inspection, repairs, and independent confirmation of repair, the attorneys get to put their oars in to stir the waters. When the closing is finally scheduled the fun really begins as all the parties sit down with the bank’s attorney in the across a table from each other. As the attorney’s have made this a pretty adversarial process to this point the buyer and seller now get the opportunity to sit across from each other while the papers get signed…all the papers get signed. The seller signs the deed and a few assorted papers and then gets to sit while the buyer goes through and signs all the loan documents, disclosures, etc, etc. It is bad enough to sign all those documents but even worse to have to sit and watch someone else do so. At least when it is all done the seller hands the keys across the table and all walk away.
Washington – where the day ends at 9pm and the seller keeps the house after closing. At least Washington does not subscribe to the “lawyers full-employment act.” You can involve a lawyer, but you don’t have to. The parties’ realtors manage the deal making and negotiation including issues involving inspections and the like. The banks deal with the financing and a title company handles the closing. Here is where it gets weird. In Washington the buyer goes to the title company and signs all the document 2-3 days before “closing” and then either hands over the cashier’s check or wires the money to the title company. The seller then comes in an executes their share of the documents. On the day of “closing” the title company confirms that both the buyers and the sellers money is in hand and transfers it as instructed. They then record the title transfer at the county records office. The seller can stay in the house until 9pm that evening even though he no longer owns the property and has no legal right to it! The seller has already paid for the property, the transfer is already recorded, and yet no keys. Not yet!
11th Hour Hiccups – All went smoothly with our closing until the very last minute. We are long time clients of Wells Fargo and wanted them to hold our mortgage as they don’t resell loans, but keep them for the long haul. Unfortunately Wells Fargo has such a reputation for delay that in the Bellingham area most sales contracts are written with a “Wells Fargo delay clause” invoking penalties for failure to close on time. In our case we arranged to finance through Bank of the Pacific and they agreed to sell the loan to Wells Fargo. As part of that sales process Wells Fargo got involved in the application process. The approved everything except for the appraisal. Three weeks before closing they asked some questions which the appraiser promptly answered. Then they apparently went to sleep. During the last week before closing our banker called the reviewers 3 times per day. Bank of the Pacific offered to keep our loan, but not at the outstanding interest rate Wells Fargo had locked in for us. Eventually the Bank of the Pacific CEO got on the phone with Wells Fargo, and we threatened to remove our and my mother’s money from the bank. That seemed to do it. With literally minutes to spare for the funds transfer deadline, Wells Fargo completed their approval and the transaction closed.
Nerve wracking for everyone involved (except perhaps for Wells Fargo), but the job got done and we got the keys and got into the house! Now the work (and fun) begins!
