Friday, November 11, 2011

Ten Reasons Why Your Real Estate Deal Fails at the Closing Table!

Having bought and sold many properties I can tell you that deals can blow up right at the closing table.

When I decided to buy my first home in Miami, Florida due to my wife's pregnancy the deal blew up in less than 45 minutes into the closing. I was going to sell my 1 bedroom condo on Brickell Avenue and purchase a 3/2 home in Coconut Grove on the same day! What could go wrong?

Mistake!

The Buyer of my apartment came to the closing but could not close the deal due to late arrival of the bank funds. The Tile Company refused to close that afternoon and wanted to do it the next morning.

Well needless to say, I was MAD!

I was going to use the excess monies from that Brickell Avenue deal as a down payment on the Coconut Grove purchase.

The current owner of the Grove House threatened to take my $12K deposit since we couldn’t close on the contracted date.

Thank God I had an attorney draw up the contract. There was a "subject to funding" clause in the contract

Note: Always have a Real Estate Attorney review your contract template. Check our Service Providers List for our preferred real estate attorney in South Florida.

The next day we closed but I couldn't sleep that night.

Soooooo….just because you have a contract doesn't mean you're going to close!

Below is a list I put together with help from Joseph F. Suarez that provides Ten Reasons Why Your Deal Fails at the Closing Table! (Sellers Beware):

  1. You Contract is not Correct – Too many mistakes can occur right here like wrong Platt numbers, improper property description, wrong dates, etc.

  2. No Financial Commitment By the Buyer
    1. No Money in Escrow

  3. Title Problems
    1. More/Different Sellers on Title
    2. Seller Not on Title
    3. Illegal Title Transfer

  4. Buyer has Collections & Judgments
    1. Check out the Buyer

  5. Deteriorating Market – Current Real Estate Market
    1. Deteriorating Market Value
    2. Deteriorating LTV Ratio .
    3. Deteriorating Interest Rates

  6. Open Permits and Liens – Hurricane Andrew caused a lot of problems with Open permits in Southern Dade County. I can’t tell you how many times I have been nailed on this item!

  7. Fraud/Foreclosure/Google – Again, Buyer Beware!

  8. Water & Waste Lien – This problem appears a lot with commercial properties that only have one water meter.

  9. Property Doesn't Qualify for Financing – Tax rolls list it as a 2/1 one but you think you are buying a 3/2 Uh?!

  10. Uninsurable Property – Property in a Flood zone, property not up to current code, etc.

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Written by +Bob Burns.
 
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Telephone #: 305-586-5280
email: rkburns@investmentpropertiesmiamiflorida.com
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