Common Closing Delays

In this month’s Closer’s Corner we review the top items that can occur that run the risk of delaying your closing.  

T-47 & Survey Matters 
When the title company receives the survey and the Residential Real Property Affidavit (“T-47”) to review up front we are looking to see what changes, if any, have happened on the property so that we know if we can use the existing survey for closing or if a new survey is required.  The part of the affidavit that we review in full is question #4 which states: 

Would it surprise you to learn that almost all of the T-47s that come in are completely blank for this section? When the title company sees that this section is blank we assume that the answer is “NONE” for this question and proceed to processing the file towards closing.  When we get to closing we will have a T-47 signed for our purposes and we will confirm with the seller at that time that nothing has changed.  

Fast forward to the day before closing and the lender has done a Google Earth search which shows that there is an additional building on the survey or we may even be in closing and the buyer says “hey, that building is not showing on the survey….”  

Either of these scenarios can result in your closing stopping so that a new survey can be ordered.  Right now surveys are taking longer than they ever have to come back in so it could be days or even weeks.  To avoid this delay please always make sure that your clients fill in “none” or any matters that have changed in Question 4 of the T-47 affidavit.  Here is an article with more details about survey matters:

Active Work on The Property 
Any active work on the property may represent a silent lien in favor of the contractor doing the work.  In closing, there is an affidavit that sellers sign in which they swear there is no active work.  Once a title company finds out there is active work on the property we have to stop closing and obtain appropriate lien waivers so the time for us to learn this information is not at closing.  For a more in-depth explanation of the issues, a prior Closer’s Corner can be reviewed here:

To avoid this delay always let your closing team know about on-going work as soon as we get the contract or repairs are being done.  

Deaths In the Chain of Title 
A death in the chain of title can be a very complex matter to navigate to get to closing.  It can be time consuming, it can involve having to get court orders and it can be a real challenge to get the deal closed.  

To avoid delays from a death in the chain of title ask us to open a pre-contract file (we call them TBD files) once you have your listing agreement signed.  This really is the best way to find out what is going to be needed for your specific transaction since there are so many variables.  Put your title company on notice as soon as you know that there has been a death in the chain of title.  

For more discussion on this topic please review:

Last Minute Mail-Out Notices 
When either party is signing remotely via a mail-out transaction there are additional steps for both the title company and the lender to get to closing.  Sometimes finding a notary that is local to your client can be a very difficult and time consuming task.  If you know that your client is not going to physically come to our office for closing please let us know as soon as you are made aware.  Notifying us in advance will help keep your transaction running smoothly.  

Last Minute Power of Attorney Use 
Sometimes your client prefers to appoint someone to sign on their behalf instead of signing the documents remotely.   This can be accomplished by them signing a Power of Attorney form.  It is important to note that in order to use a Power of Attorney (“POA”) form, the title company and the buyer’s lender must (1) approve use of the POA and (2) approve the actual form to be used prior to closing which can take time on both sides.  Also, the principal must be available to talk to on the day of closing.  

For more on POA use please review:

Foreign Investor Real Property Tax Act (“FIRPTA”)
When you have a foreign seller, it is possible that your seller may have to pay 10% or 15% of the sales price to the Internal Revenue Service from closing.  There are exceptions to the rules of course but going through the FIRPTA analysis takes time and often times results in additional questions for the seller and buyer so it is important that you let us know if you have a foreign seller as early on in the transaction as is possible to avoid closing delays.  

For more on FIRPTA pleases review:

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