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VOL. 41 | NO. 22 | Friday, June 2, 2017

Too many moving parts can spoil a good closing

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With fraud raining down upon the real estate industry through the years, title companies began to rely on bank wires rather than paper checks. The wires fly in from buyers and lenders alike and make for a more secure transaction.

Problems arise when there are two or more transactions interwoven in domino style with all depending on bank wires. For example, the seller of Forsberg Avenue is buying on Pekka Peak, and that couple is buying on Subban Circle. The goal is for three buyers to buy and three sellers to sell on the same day.

In most transactions, the buyers and sellers close with different title companies, thereby providing each with legal representation. In the Forsberg closing, the buyers are closing at 9 a.m., and the sellers at 10, one in Cool Springs and the other in Hillsboro Village. Pekka’s has the buyers in Hillsboro Village, the sellers in Green Hills, and Subban Circle has the Green Hills buyers and a Brentwood seller.

If all goes well in the Forsberg sale and signed documents are emailed to the lender and immediately approved, the lender could generate a funding number, and a wire could leave the lender who is in Virginia at 1 pm, thereby creating a power play for the Forsberg sellers, now Pekka Peak buyers.

The Forsberg house owners’ title company receives its cash at 3, as the Fed controls the cash. Then it must wire it to the Pekka’s Peak title company. The sellers of Forsberg signed their Pekka Peak purchase documents during the same session at 9, but their sellers are not closing until 1.

So the lender receives the documents from Pekka Peak at 2, immediately (not always) funds the loan and issues a wire order at 3. However, the proceeds from the Forsberg sale have not arrived and do not until 4.

Until such time, the Pekka people deflect any effort by their buyers to take possession. Effectively, the buyers are offside if they enter the house ahead of the wire. Both wires finally hit at 4.

The Forsberg sellers had agreed to give possession to the buyers at closing. The buyers had wired their money to the title company, the bank had wired its share of the money and the deal is closed. Those buyers can, in fact, take possession.

At 4:30, they are released from the penalty box and can move into their new homes that the Pekka Peak owners had saved for them.

Lest we forget about Subban Circle. The sellers and buyers signed all of the documents at 9 a.m., but had to wait for the entire game to unfold. Even if the lender funded the loan quickly, the buyers still need Pekka Peak’s proceeds to close.

That money hits the title company at 4:30 and is wired immediately. Alas, the Fed is closed.

The money will not arrive until the next business day, and it’s the Friday of Memorial Day. Although everyone did everything right, there were not enough hours in the business day and the Fed does not offer an overtime. As a result, the Subban Circle seller has no money at all and will to wait for four days.

In short, it’s tough to pull a hat trick in residential real estate in one day.

Sale of the Week

Poston at the Park is a new condominium development located on Poston near Centennial Park, hence its name. Listed by Mark Deutschmann, the marketing guru and midtown development visionary, the project had a $2 million sale last week, a spectacular number even during the wild ride the city is experiencing.

The 3,301-square-foot unit sold for $2,150,000 last week, one month after a smaller, 1,938-square-foot unit sold for $928,889.

The $2.15 million home has four bedrooms, three full baths and one half bath, along with a separate office, living room, dining room and den. The enormity of the unit is unparalleled in high-rise and midrise condos, and the four-bedroom configuration is rare, if not a first.

With a $1,000-a-month homeowner’s fee and an estimated $21,500 in property taxes, this is not for the faint of wallet. However, its sale substantiates the fact that there is a demand for the product.

As people move in from the East Coast, developers are learning that many families are accustomed to apartment-style condominium living, and their children are not a yard-romping breed.

Poston at the Park is a five-story, 27-unit collection of several floor plans ranging from 1,552 to 3,301 square feet.

Interestingly, a 1,552-square-foot, second-floor unit carries a price tag of $679,900, yet a condo that is slightly larger at 1,556 square feet on the first floor sells for $599,000.

Atop the complex is a saltwater pool and a deck that is shared by the ownership.

Richard Courtney is a real estate broker with Christianson, Patterson, Courtney, and Associates and can be reached at richard@richardcourtney.com

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