Today I had a closing on a home in Mendota Heights. Yes, occasionally I deviate a little and list a home outside of our focus cities! My Client, the Seller, flew back to town to close on the home. Prior to deciding to come back, we went through lots of scenarios about how to get the home closed while she was in Arizona.
Closing dates for a home sale are established right in the purchase agreement. This gives everyone the chance to look at their schedule early in the negotiation process and commit to that date.
However, there are times when something comes up and you can’t be present for the closing, what happens then?
In Minnesota we are a ‘table funded state’ this means we actually close the property at the table. All documents are signed by both parties, the mortgage is generated and funded and keys are exchanged all in the same hour.
Mortgage Brokers refer to this as a Wet State, compared to a Dry State. The loan documents in a wet state can only be signed once all conditions have been satisfied. In a Dry State the loan broker can draft loan paperwork and have borrowers sign it, then go to work to Clear all Conditions so the loan can fund.
We often hear the term, In Escrow, regarding a home closing. I hear that term on shows like House Hunter, the show where every buyer decides on a house after seeing just 3 homes….yeah, right! Some states allow the buyers and sellers to independently sign their documents and the loan documents within a 30 day time frame and then the Title Closers coordinate the actual exchange of documents and the home closes on its own. In those states a Purchase Agreement usually has a ‘Possession Date’ negotiated into it instead of a closing date.
Because of our Table Funding or Wet State process, the sellers and buyers must each sign several documents on the day of the closing. The Settlement Statement, or HUD, is one document that must receive signatures from both parties on that very day.
If you can’t make it to closing, and you are the Seller, it’s a fairly easy solution. Your Title Closer prepares all documents which can be signed ahead of time and you come in to Pre-Sign at a scheduled time. If you are not in town, the closer can send documents and you can sign them in from in front of a Notary Public. Along with the closing documents your Title Closer prepares a limited Power of Attorney appointing someone who can attend the closing. The limited POA allows the person to sign the final documents at the closing.
As a Listing Agent in Lakeville, Apple Valley, Savage, Prior Lake, Eagan, Rosemount, Farmington and Burnsville Minnesota, I have been the appointed signer on so many closings, it’s hard to estimate. It’s quite common for a Seller to pre-sign the documents and then authorize their Listing Agent to sign the final settlement. This might sound a bit scary, but keep in mind the few pages being signed at the closing have already been available for the Sellers to see, review, and ask questions about prior to the day of closing.
If you are a Buyer in the State of Minnesota and can’t make it to your closing, the options are more limited and difficult. Primarily, the Lender will decide if they are willing to accept any Power of Attorney signed paperwork. It’s much more rare that a Buyer can’t make their prearranged closing date, after all the Buyers usually propose the closing date.
My client today was the Power of Attorney for her husband who was too ill to travel. This complicated our issue, because a Power of Attorney cannot transfer their Power of Attorney to another person. This means, even if we sent papers to Arizona, they could not allow me, as their Listing Agent, to be the POA.
Congratulations to the Buyers, they got an awesome house with a beautiful lot, complete with a little brook and lots of wildlife!
If you have specific questions, please let me know. You can use our Ask a Question form or just give me a call at 612-889-6496.