By Lydia Blair
Special Contributor
Contracts are signed, inspections completed, movers are scheduled, and the big day is almost here. It’s full speed ahead to closing day. That’s the big day when paperwork is signed, money changes hands and the keys are handed over.
But what happens when one of the individuals can’t make it to the title company office on closing day to sign those all-important papers? It can become a big speed bump in the process. The contract stipulates a closing date and if one of the parties to the contract fails to close on time, it can become a legal issue. If handled correctly, there are solutions that can keep the deal heading in the right direction.
First, communicate the situation to the title company. Often, if they know well in advance, they can make arrangements that will keep everyone happy. Maybe the elderly seller is in a nursing home and needs to sign at that facility. Or perhaps a spouse is going to be out of town on business and wants their significant other to sign for them both.
Regardless of the situation, letting the escrow officer know early is best. When the title company has to scramble at the last minute to arrange alternate provisions, it can add to the expenses. That extra cost is passed on to the party in need of the special arrangements. Why not let them know ahead and save the extra headache?
When a home seller can’t appear on closing day, often paperwork can be signed a day in advance of the closing date. Then the proceeds from the sale can be wired to the seller when the transaction is complete.
The seller may also be able to assign a Power of Attorney (POA) document so that someone can sign closing papers in their absence. The proper POA must be drawn up beforehand and approved by the title company and lender. There are different kinds of POAs and it is important to understand exactly what the title company requires in advance. Appearing on closing day with a POA and no advance notice can bring the process to a screeching halt.
The most popular solution is often a remote closing. The title company arranges for the buyer or seller to sign documents at a location convenient to the signer. Then original documents are sent back to the title company for processing. There are pros and cons to going this route.
“Remote closings are a godsend because they help keep the closing on track without having to amend the contract with a new closing date,” says Realtor Paul Sander with Ebby Halliday. “Clients love them because they feel the closing process is catered to their schedule. Realtors love them because they help ensure the closing will actually take place.”
The remote closing solution seems to make lots of folks happy. But while remote closings are appealing to many, they have a few drawbacks. Often a title company will hire a mobile notary to take care of the signing. The mobile notary is not an escrow officer and can’t explain the closing documents. They simply tell the party where to sign and initial. Some people need more clarification of the big batch of documents that represent such a large purchase.
Even if the parties can arrange a remote signing, advanced signing, or POA, the lender must approve it as well. Obviously, when closing documents are signed remotely, they must be returned to the title company for processing. This adds to the time and expense of finalizing the transaction.
If the homeowner or buyer is out of the country when the closing is scheduled, that presents a more complicated set of issues. International POA or remote closings require a lot of time and coordination. Often the parties are better off delaying closing until the signer is back in the country.
When you can’t show up to your closing, contact your title company immediately to steer clear of problems. Like a truck powering down the highway, it may take time to shift gears and maneuver to a successful finish.
The opinions expressed are of the individual author for informational purposes only and not for the purpose of providing legal advice. Contact an attorney to obtain advice for any particular issue or problem.
