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Putting the Cart Ahead of the Horse

With one* exception, every deal that began in the last two months has died a premature death. Some hit roadblocks disguised as banks; others were pushed over cliffs by appraisers.  Still other transactions couldn’t get past one (or more) inflexible party.

 

Whatever the cause of death, the demise of a deal has collateral damage in the amount of time I ultimately waste.  For instance, there is a title search/report to be reviewed on each transaction.  The shortest ones are in the mid-20 page range, and the one surviving new-ish deal’s report is 98 pages long! 

 

Each report needs, at a minimum, reading, note-taking, document requests, and forwarding of material.  There’s e-mails to clients, providing requested paperwork, and follow-ups, with the frequent added impositions of drafting affidavits and agreements and supervising their execution.

 

This work is mostly done while a mortgage application is pending, so there’s a good chance the work will be wasted if the loan is denied. So why, you might ask, do I do all this work before a deal seems more likely to proceed to closing?

 

Good question!  The answer is that most title searches come in about two-three weeks post contract, while most mortgage commitments take about 45 days to process.  If I waited until a lender approved a mortgage application before reading a search and assembling the paperwork necessary to clear a less than pristine report, the interest rate or the mortgage commitment might expire.  The parties and the other attorney would be sitting around, drumming their fingers and tapping their feet, saying, “What’s the holdup? Why didn’t you do this while you had the time [between contract and commitment]?”

 

Since I don’t want to be responsible for a bona fide deal heading south because I waited too long (in the context of the contract terms), I do the work as soon as possible. Then the deal goes to hell anyway!

 

*There’s a bank issue and a flood issue, so this deal’s not looking very robust, either!

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