The weeks leading up to settlement can be very stressful. The lender is usually asking for paperwork on the property, and/or your finances. Your Real Estate Agent can help run interference for you by getting paperwork from the seller’s agent, the homeowners association, the condo association, etc.
If the lender has not received final approval from the underwriter, it can be touch and go, as you approach settlement. Sometimes, it’s necessary to postpone settlement, but your Real Estate Agent should do everything possible to help make the settlement date.
We have had a few experiences where the lender did not have the funds sent to the title company’s account in time for the settlement. In that case, the title company may suggest a “dry settlement.” A “dry settlement” is when the Buyer and Seller sign all of the mortgage and real estate documents, but no money is exchanged. Instead of postponing settlement, the title company and real estate agents would most likely persuade you to attend. We have always been uncomfortable with dry settlements, particularly when selling. If the funds have not been sent to the title company, you walk away with a “promise” after you have signed to deed over to the buyers. That’s a Big No No for us! We actually walked out of a settlement about 10 years ago. Our Real Estate Agent remained at the title company to work things out, all the while calling us to ask that we return. We didn’t return until we were assured that we would receive our proceeds that day!
Since large amounts of money are exchanging hands, we believe you should be very careful. Click here to learn about precautions to take when wiring settlement funds.
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The opinions expressed herein are solely those of the Author/WebMaster. Before taking any action, please consult your real estate, financial, and legal advisors.