Surprises at the closing table....?

Question

So we closed on a house 2 days ago but can't legally move in yet becauses the $3000 dollars we were supposed to get from the SELLER at closing somehow ended up in some damn escrow account. They were trying to steal money that wasn't theirs! They though it was repairs that had to be done in order for the house to sell. They told us to go hire someone to fix the house and send them the receipts. And our agent just sat there like an idiot and didn't say anything. That money was the offer we put in to the seller that he agreed to. The agent should have spoken up, she's the one who wrote the offer after all. So we actually threatened to walk away from this deal. Only then did everybody run to the phone and try to do something. So they said the check that was supposed to be there at closing would be here the next day. That was Wednesday it is now Friday. Yesterday their excuse was they could not wire us 2 checks in the same day (we were also waiting for his $500 dollars back

the $500 turned into $307 at the closing table.) What kind of BS excuse is that? How is it that they ended up with OUR money in THEIR grubby hands? Why am I sitting here 2 days later after closing with no house? >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Anyone else have a closing table horror story?

You're damn right I'm having a hissy fit as you call it. We were told a thousand times we would be cut a check AT closing and we were also told a thousand times, don't worry there will be NO surprises at closing... So, duh, I'm pissed. Our offer on the house was full asking price with $3000 back .... PERIOD.

Answer 1

I'm sorry, what did you say? I was pondering your avatar. ;)

Answer 2

Lesson learned. NEVER close based on promises. There is such a thing as a cold closing, which means things aren't quite wrapped up yet, and you have some legal clout left. My husband and I did this with our first house when we realized we had no assurance the hot tub worked. At this point, depending on what you have signed, you may be up a creek. If you don't see your money by the end of the day FIND A REAL ESTATE LAWYER. Threaten to do so at noon.

If you can't legally move in, perhaps you did have a cold closing. You can still back out of the deal.

Next time, educate yourself as to all aspects of the closing. It is hard if you aren't a lawyer but worth it. There are so many shithead charges at a closing, my husband has had at least $200 removed every time we have bought a house by just demanding it. $75 fax fee and such crap.

Mary, doesn't it matter what it says in the contract about repairs? Most houses we have bought, we have gotten a check at closing from the seller for repairs. If we didn't make the repairs, we still kept the money. I don't think it is "seller gets the change". This is from our experience buying in four states.

**Mary, thanks for your answer. Our checks have always been on the closing statements and in the contract, I thought you were saying somehow that was never done. It sounds like the questioner also had it in the contract. Again, we have bought and sold eight properties and I always ask if lawsuits ever happen and the answer has always been "No". I appreciate your time!**

Also, I have never met a Realtor who knows of any buyer or seller suing for non-performance. It just isn't worth the hassle or expense, no one does it, and I say if a deal stinks walking away is best if no agreement can be reached.

Good luck!

Answer 3

You have a few problems:

1. You CANNOT get cash back at closing...the lender won't allow it. If you are getting back money that the lender isn't aware of...then don't be suprised if the lender sends you a notice in a couple of months once the final documents are reviewed...ALL checks that are cut, the lender must be informed of. The lender can require you to re-close the transaction if anything isn't right, and you signed a document at closing giving them the right to correct any and all errors, or they have the right to CALL THE NOTE DUE.

2. Your Realtor obviously doesn't understand this aspect of financing...a sign of inexperience.

3. I'm glad you didn't "walk" because you would have been sued for non-performance by the sellers if you had, because of reason #1. Just because you didn't like how the closing was conducted, doesn't mean you can throw a tantrum without any legal ramifications...this is something else the Realtor and the attorney, should have explained to you.

4. The reason that you didn't get the $3k check at closing is because the SELLERS ARE DUE BACK any money that wasn't used for the repairs that were agreed upon in the sale contract, and they have the right to review the receipts to make sure that everything is Kosher.

You didn't do anything wrong, you just had a bad agent that was an idiot.

PS: With the same respect to Ron...a seller concession is NOT the same as CASH BACK at closing...if a seller concession exceeds the closing costs, the money is simply not used...they don't get it back at closing and in 11 years of UNDERWRITING loans before I got into mortgage brokerage and real estate...not one lender would permit it...Fannie Mae, Freddie Mac...private investors...none of them. What the above poster was describing was not used to pay closing costs, it was used to pay for repairs...that money is placed into an escrow account until the repairs are made and the balance refunded back to the sellers, if any is left. The REASON it's placed into the escrow account is because the lender won't allow for a check to be cut to the buyers...that guarantees the work was completed per the contract....which the lender will also require evidence of if they allow for repairs to be made post-closing.

To Ginger...the practice of receiving a check for repairs DIRECTLY from the sellers for repairs, that doesn't appear on the HUD is a "deal outside of closing" and is 100% illegal. Realtors and loan officer's can both lose their licenses if they are aware of such transactions, b/c RESPA states that ALL money exchange must appear on the HUD.

Also, in a competitive real estate market or very hot areas of a city...yes, a seller will sue for non-performance if there is a substantial loss, and they will win if it's for a petty reason, and yes, I have seen it done.

Answer 4

I'll "third" the avatar compliment. If you showed up to closing looking like that, you would probably be happy home owners today.

With all due respect to Mary B, you CAN get money back at closing. I do it all the time, and lenders DO allow it. There are limits - usually 3% or 6% of the purchase price, depending on the program and down payment. It's called a seller concession. However, what was your agreement? Was the cash back for the purpose of "repairs"? If so, I'm afraid the sellers have a good argument. If they are going to pay back $3000 for the "purpose of repairs", they want to be sure you're actually going to do the repairs. Personally, I wouldn't worry about it as a seller - most sellers wouldn't. But, depending on the agreement, putting the money in an escrow account is reasonable. Next time write the Purchase & Sales agreement to read, "Seller concession of $3000 to contribute toward closing costs and pre-paid items". This way, there would be no issues with underwriting getting your loan approved, and there would be no discussion at closing about getting the repairs done. Good luck & enjoy your new home!

Answer 5

You may well be blaming the wrong people here. If that $3000 ended up in a distant location, such that it had to be wired back, it may well be a title firm or lender error. If any monies were deposited in the escrow account of the real estate agency, all they would need to do is cut a check immediately.

Your contention that they were trying to steal money is rather nonsensical. You're having a hissy fit over a closing error. It should not have happened, of course, but I highly doubt that anyone was trying to steal it, since it was lodged in an escrow account. Do you realize what an escrow account IS ?

Answer 6

Your agent should have spoke up but it's typical for this sort of thing to happen. My agent got weak also and I lost some money on the deal. Get what you can of the money back and if you lose some money just move forward and let the deal close on time. This way you can move forward and be done with it. My agent was too easy and let the other agents walk all over him. I finally had to assert myself. Good Luck, you'll work it out.

Answer 7

Mary B is exactly right. As a buyer, if you are financing the purchase you cannot walk away from the closing table with cash. Any sellers concessions in the form of credit will go towards closings costs limited to the lenders guidelines based on your down payment %, not in the form of cash/check to you at closing.

Answer 8

If it might ever take place lower back, whilst the waiter is composed of ask if each thing is all suitable, ask him regarding the opportunity of being moved. If he says no, ask for the executive. you have as plenty suitable to savour a meal out through fact the individuals on the different table.

Answer 9

hey if its in the contract and they signed, there is always somthing you could do. But honestly if they tried it the first time, you should have walked away, and told them to kiss your *** while you were at it.

ps i like your avatar also

Answer 10

This is precisely why people should have lawyers at closings.