Wednesday, April 9, 2014

Conducting A Real Estate Transaction Through A Dry Closing Arrangement

By Matt Baumberger


In the real estate sector, there exists several ways of finalizing a sales agreement. The most intriguing one is dry closing as it happens when the buyer does not avail the agreed money on conclusion of the transaction. In the past, it was perceived as strange but today it is widely accepted.

This method of closing entails all the ordinary procedures of a conventional closing in the presence interested parties. The purchaser brings along a lawyer and signs all the necessary paperwork. The decision to transfer possession of the property lies with the previous owner.

No money is exchanged at the agreement venue because the banks fail to release the money on time. This is because of new regulations that require them to peruse the signed paperwork before disbursing the funds. The duration for disbursement of funds is several days.

Another situation that causes money delays is the owner insistence of meeting up with the financier first. This occurs when the buyer has acquired special arrangements with the government as its financier. In such situations, the seller can decide whether to go through with the deal or not. The government later releases the money through the financier.

Other uncontrollable events can make the funds not be available at the signing venue. They include instances of the purchaser failing to complete and avail the recommended paperwork at the correct time. Sometimes the banks process the mortgage finalization stages at a slow pace.

It is imperative to inform all parties at an earlier stage when conditions arise for this kind of closing. This prepares every person to come up with possible solutions to alleviate it. In most cases, the parties' legal representatives decide on forming an escrow setup that will see the deal through. They select this option in cases where the money is likely to be availed soon.

At times the Realtor withhold the deal until the funds is delivered. This happens because regaining a property's title is a long and difficult legal process. Sometimes the financiers fail to provide funds because of a number of technical issues after the ownership status has been changed to that of the purchaser. This brings long legal proceedings.

Finalizing an agreement this way does not imply the absence of finances. If it happens spontaneously, it should not be taken as a buyer's mischief. It is just an acceptable way of conducting real estate business.




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