Happy LDW y'all.
Summer's over. š
āļø
Livin' La Vida Luna y Luca
Crushing empanadas while listening to live music at the Farmer's Market.
Fault ā Responsibility
We put Project Fairmount under contract back in March.
We signed the commitment letter with our lender back in early July.
We finally closed this past Thursday.
You'd think with all the time we had to prepare, things would go smoothly. Nothing could be further from the truth.
HUD
The day before closing the Title company shared a draft HUD statement for review.
The HUD statement details all the charges and credits between a buyer and seller.
Our HUD showed us paying the property taxes until the end of the year. That's pretty normal. It also showed us paying our property insurance for a full year in advance. Also normal.
However, our lender requires us to escrow property tax and insurance within our monthly payment as well.
We caught this mistake and had the Title company remove both the prepaid property tax and insurance from the HUD.
That would have been a ~$6,000 mistake had we not caught it. We wouldn't have lost the money, per se. It just isn't an efficient use of cash to escrow both line items with two separate entities.
Promissory Note
The Promissory Note details the terms and conditions of a loan. It covers everything from the amount and interest rate to the payment schedule and guarantors.
The Promissory Note we were meant to sign at the closing table was littered with mistakes.
- Term. They put in 12 months, but we paid an extra .5% on the origination fee for an 18-month term.
- Personal Guarantor. They had someone else's name in the PG section. I didn't mind that mistake so much š
- Loan Repayment. The principal balance in the loan repayment section was $125,000,000 instead of $1,250,000.00. ā ļø TALK ABOUT THE IMPORTANCE OF DECIMAL PLACES.
Mortgage
The mortgage was dated incorrectly. It had a June date instead of August 29th.
W-9 Form
The W-9 Form had our entity listed as a Sole Proprietorship instead of an LLC - Partnership.
E-Signature
Finally, we signed a bunch of documents before the closing with E-signature. It turned out that wasn't allowed so we had to resign all those documents at the closing table again.
Annoyed
I was annoyed, and I'm sure my face showed it.
The closing began at 3:00 pm and it was about 45 minutes away from home.
I had to ask Dia to come home early to pick up the kids from school. And now we were dragging well past 4:00 pm with the lender on speakerphone making changes to the documents in real-time as we found mistakes.
On any other day, for any other transaction, I probably would have cut my losses, left by 3:15 pm, and pushed the closing to next week.
But all I could think about was the sellers and my reputation.
The sellers needed the money from this sale to buy their next property. That closing was scheduled for Tuesday.
With Monday being a bank holiday, I couldn't risk leaving that table without being ready to record.
It's Not Your Fault
When I was adamant about pushing through, my Title company and lawyer tried to convince me it wouldn't be my fault if the closing got pushed.
But fault is different than responsibility.
I agreed, "Sure, it may not be my fault. But I alone suffer the consequences with the seller. They're not going to care what the excuse is. They are buying their next home on Tuesday, and they need this money to make that happen. Monday is a bank holiday. And I'm not going to be the reason they can't buy their next home. So let's figure this out, or I'll have to spend my Labor Day Weekend calling everyone I know to scrounge together the purchase price in cash."
That landed.
We figured it out.
And I got home just in time to put the kids to bed.
š
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