To pick up where we left off, it’s now about a month before closing and the buyer had just called ME, even though he wasn’t my client, to tell me that he was having trouble arranging financing. If you’d like to review all the details and all the lessons learned so far, and there were already a lot, take a look at It Finally Closed! A Real Life Case Study and It Finally Closed-Part 2! A Real Life Case Study. After the buyer called me, all was quiet for a couple weeks. I figured that meant the buyer was bluffing when he told me he may not be able to arrange financing and was probably just trying to get a price reduction.

But then I picked up my phone two weeks before closing and guess who was on the other end? The buyer. Again. This time he told me: “I’m trying as hard as I can to arrange financing, but I can’t do it. I can’t close unless your clients reduce the price by $50,000.” I told him that my clients weren’t interested in reducing the price and that he should have this conversation with his lawyer and not with me. I also advised him to make sure his lawyer explained to him that if he didn’t close, there would be a good chance he’d lose his significant deposit and that he’d be sued personally for any damages. Lesson 11: Before you decide to do something that may have severe legal consequences for you, get good legal advice so you’ll know exactly what you’re getting yourself into. At this point, I was starting to think that the chances of the deal closing were about 50-50. Our clients were pretty sure the deal wasn’t going to close, but we kept telling them not to worry because, whatever happened, we’d know what to do and would be there to help them through it.

A week later, the buyer’s agent called me to say that the buyer’s partner could get financing, but the partner and his wife would have to be added as buyers to the agreement. And one more thing: the original  buyer would have to be removed as a party. I never have a problem adding parties to an agreement. It gives my clients more parties to sue if something goes wrong. I always have a problem letting someone out of an agreement, especially in circumstances such as  these where it wasn’t clear what the buyers were up to. Lesson 12: It’s alright to add a party to an agreement because that gives you one more person to sue if the deal goes south, but never let a party out of an agreement  unless there’s a very good reason to do so. The sellers’ lawyer later advised me that it was okay to add the partner and his wife as buyers, but the original buyer should not be let out of the agreement. We drafted an amendment to accomplish this.

As if this wasn’t enough, the buyer’s agent called me again the next day (and it wasn’t because he missed speaking to me). This time, he said his clients needed to extend the closing because their new mortgage broker required that they switch lawyers and their new lawyer needed more time. By now, I wasn’t prepared to believe anything I was being told by the other agent or his buyer so I told the buyer’s agent that if the lawyer needed more time, he should call the sellers’ lawyer. The lawyers talked and the closing was extended by a week. Lesson 13: If you’re  having credibility issues with the other party, suggest that the communications take place between your respective lawyers because the other party may be more likely to tell their lawyer the whole truth and nothing but the truth. 

Did I believe that everything was now on track for smooth sailing until closing? Of course not. I’ve been in this business too long to be that gullible and I know that It’s Not Over ‘Til It’s Over. So I wasn’t surprised when I received a call from the buyers’ mortgage broker. At this point, I started to think “Why me? Why can’t you call who you’re supposed to call? Is this deal going to close or is it going to die a death from a thousand cuts?”. The mortgage broker told me that the buyers’ lender would not advance the funds unless the original buyer was removed from the agreement. This sounded as ridiculous to me now as it did when the buyer’s agent told me this a week before. I’d never heard of anything like this and couldn’t think of any reason the lender would require the original  buyer to be removed from the agreement. I could understand if the lender didn’t want the  original buyer’s name on title, but what did it matter if his name was on the agreement? This got my spider senses tingling big time so I countered with what was now becoming my mantra: “This is a legal issue. Speak to the lawyers.” Lesson 14: Be careful when  the other party asks you to make changes to a deal you already have in place. Seek your lawyer’s advice before agreeing to substantive changes because some changes can have unforeseen and unpleasant consequences. As I suspected, the lawyer said no to removing the original buyer from the agreement.

Was that the end of this issue? No. The day before the extended closing date, the buyers’ mortgage broker called me again to tell me for a third time that the original buyer had to be removed from the agreement or the funds would not be advanced. I passed her on to the lawyer (which you’d think she should have learned already and not even bothered to call me). The lawyer again said no. But this mortgage broker wasn’t going to take no for an answer. The lawyers spoke and the sellers’ lawyer agreed that it would be alright to let the original buyer out of the agreement. We quickly completed another amendment. Just in time. Closing was the next day.

But it didn’t close. Remember the beginning of this story when I told you that one of  our clients was an estate? Well, there was an issue with the estate. Luckily, this issue was resolved in a day or so and then……THE DEAL FINALLY CLOSED!!! Our clients were extremely happy because they were already convinced that this deal wasn’t going to close and weren’t looking forward to putting the property back on the market and commencing a lawsuit against the original buyer.

And that’s when the most important lesson of all  became clear. At least to me. Lesson 15: You can hire a random agent or lawyer if you can remember all these lessons and thousands of others, or you can hire a great agent or lawyer who knows how to handle all the different problems that can arise in a residential real estate transaction so  you can relax and be confident that your best interests will be well looked after. Thankfully, not all transactions turn out to be as complex as this one, but it’s always nice to know that the right people have your back if you run into trouble.

Corinne and I felt a sense of relief when we heard from the lawyer that the deal had closed. We were very happy for our clients because we knew how much stress they were feeling. Complicated transactions such as this one don’t occur all that often, so you may find this hard to believe, but at the same time that all this was  going on, we had another highly unusual and complex situation on our hands that we had to deal with. But that story will have to wait for another day. Just retelling this one has made me feel like I need a rest.