I prefer to receive a copy of the estimated closing statement before my buyers sign loan documents, but given the deadlines lately, it's not always possible to get my hands on that PDF. One of the reasons I ask for the buyer's closing statement in advance is so I can let my buyers know how much money they need to bring to the signing.
After signing loan documents in Sacramento, closing generally takes place 2 to 3 days later. Escrow needs the balance of funds deposited prior to the lender's funding. Title companies have 4 recording times in Sacramento, so it is possible for the lender to fund and the transaction to record on the same day.
Getting the balance of funds into escrow, though, can be tricky. Escrow expects certified funds, so you can't write a personal check. You also can't haul in a truckload of quarters or pay in cash. You basically have 2 choices: wire funds or bring a cashier's check, and both can present challenges if you don't handle the deposit of funds in advance.
I've had buyers show up at a bank near closing time, request a cashier's check and be denied because the bank required advance notice before the withdrawal of certain amounts of cash. How would you feel if you went to your bank to withdraw your money and the bank could not give it to you? To get around this dilemma, buyers should ask their bank a few days in advance about its policy regarding withdrawal -- find out your bank's procedure beforehand.
The more common issue concerns a wire transfer. It's not instantaneous. Not in today's economy. Some banks have cut-off times for wires. Others take 24 hours, or more, to wire funds to the intended destination.
A Sacramento home buyer discovered he was short $5,000, due to a mistake made by escrow. The buyer went to his bank Thursday afternoon to wire funds to escrow. By 2:30 the following day, escrow had not yet received the funds. Because escrow could not confirm receipt of the wire, the buyer's lender could not fund and this buyer's transaction did not close. Due to the holiday, the buyer now can't close until Tuesday. It means this poor guy can't move in today, nor will he be grilling a steak in his new back yard on Labor Day.
Sometimes wires don't go out on the day requested. Sometimes account numbers are transposed on the wire. Sometimes the wrong amount is delivered. Mistakes happen because human beings are involved.
Sacramento home buyers need to give themselves a little breathing room and not try to deposit the balance of funds at the last minute. Sacramento buyer's agents might want to inform their buyers that these types of things can happen.
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Certified HAFA Specialist
My Sacramento Real Estate Listings
Elizabeth Weintraub is an author, home buying columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout the four-county Sacramento area. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. Broker-Associate at Lyon Real Estate. DRE License # 00697006.
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Elizabeth: The more transactions you do, the more potential pitfalls you uncover. That means more great information for your buyers and sellers.
Elizabeth: This is a well thought out post. It’s a great explanation of how various processes can delay things as well as the fact that mistakes are made and if mistakes are made we need time to correct them. I refer to this with my clients as “wiggle room.” Most of the mistakes that occurred in my escrows were made by the title company. The absolute worst was after the close when the title company wired over $100,000 into the wrong account. Guess who chased down that mistake and loaned her client $5,000 waiting for the title company to correct it?
Hi Chris Ann: Yeah, we, as agents, end up spending an inordinate amount of time trying to predict what can go wrong and head it off at the pass.
Hi Kathleen: When I've had title companies mess up -- like when title closed a day early and never shared that information with me nor the buyers -- they typically bend over backward to make amends. Providing, of course, you complain to management about it.
Last summer, I had a sale where the Escrow company due to short staffing and someone on vacation "forgot" to Wire almost 900k to the seller.....Even AFTER the transaction closes - our job is not done when it comes to follow through and cross checking everything!
Planning ahead can eliminate the problem good to have someone one your side that has gone through the problem so no surprises at the closing.