House #2: Down to the Wire

August 22, 2008 · 3 comments

I closed on The Bulge House yesterday. While I was hoping for a smooth and easy close, I was unfortunately a bit disappointed…

The good news is that the appraisal came back very solid, at $75K. I’m paying $61K, plus getting a $2500 credit towards rehab, so essentially my purchase price was $16,500 less than appraised value. Not too bad!

The harder part of closing was the result of my financing this one; I came to realize over the past week that the bank I’m working with (a small, local bank) probably isn’t very used to dealing with investors. First, the appraiser found that the hot water heater wasn’t working (duh! it’s a foreclosure!), and the bank decided that this needed to be fixed before they would go to closing. They didn’t seem to care that the A/C and furnace weren’t working, the stove wasn’t working, and the roof was caving in…just that the hot water wasn’t working. They originally insisted that I get this fixed before closing — in other words, before I owned the house.

While I got them to agree to put off final inspection until today (the day after closing), it turns out my HVAC guy couldn’t do the work today, so I actually had him come in to replace the hot water heater yesterday, a couple hours before I closed on the house. While he was there, he decided to also replace the furnace and A/C (I don’t think he knew I didn’t own it yet), so I basically spent nearly $4K in repairs before I even owned this house. I realize this was a really bad idea, but it was easier than arguing with the bank about getting to closing. Since I can pay cash as a back-up plan, there’s essentially no chance I wouldn’t close, so it wasn’t a huge risk to do some rehab a couple hours before the closing — but it’s still a habit I won’t get into. Luckily it didn’t turn out to be an issue.

The next thing that the bank/attorney pissed me off with is how they handled my having an out-of-state partner who co-signed the loan. First, they said that I needed to get a Power of Attorney (POA) signed and notarized, to allow me to sign for my partner on the closing documents. I sent my partner the POA on Tuesday, and he was going to overnight back to me on Wednesday, just before the close yesterday. I get a call on Wednesday morning from the lender saying the head closing attorney refused to allow a POA, saying he can’t be sure I have my partner’s best interest in mind, as we’re not related, so I can’t sign for him.

What the hell is that about?!?! If my partner is willing to sign over POA to me, he apparently believes I have his best interest at heart, and if I don’t, he’s apparently willing to take that risk. Why should the closing attorney step in?


Next, the closing attorney says that my partner will have to sign and get notarized all the closing docs and overnight them back (all with about 5 hours notice, as closing was less than 24 hours away at this point). Luckily my partner’s wife is a notary, so we figured this would be no problem. But then the closing attorney said that because my partner and the notary are related, she can’t be the notary for this. What the hell is that about? A notary is just a legal witness…how is a marital relationship a conflict-of-interest when it comes to being a witness?!?!?

Anyway, the closing attorney finally did the right thing and had another notary (that they found) go to my partner’s office, get the docs notarized, and then send them back herself. So, at least my partner didn’t have to go out of his way to accommodate this ridiculousness.

After all the hassle of getting signatures and getting the water heater fixed, we closed at 3pm yesterday and the closing appraiser was able to do a final inspection late yesterday to verify the hot water heater had indeed been fixed. So house #2 is official…

3 responses to “House #2: Down to the Wire”

  1. Andres says:

    Congrats on closing!!!

    Yes, lately the closing agents and title companies are making things more difficult. This is just a simple overreaction to the issues that created many accusations of fraud about illegal closings during the boom years. I remember getting to a closing company where the lawyer did not even check my ID, they were too busy to be bothered with those things… Soon things will get back to normal.

    Again, congrats, now go there and get’er done!!!

  2. ezra udoff says:

    I think if you review the documents you’ll see they charged us for the notary, and because they kept changing the rules last minute, you should make them reimburse you!

  3. J Scott says:

    Yeah, they charged us $150 in notary fees!

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