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A contract is ratified.
Between contract ratification and closing, the agents coordinate a settlement time for their clients, perhaps together, or perhaps at different times and even different places. On the date of settlement identified in the contract, the seller shows up at the time scheduled and signs all the required paperwork. However, the buyer, who had scheduled their closing for 1pm that same day, does not show up (for purposes of this article, the reason doesn’t matter).
Approximately four years ago, Vesta conducted a closing on which the buyer inquired about using Bitcoin for payment purposes. I politely explained that the rules in Virginia as well as the standard contract required certified funds or bank wired funds. Generally, certified funds are a form of payment that is guaranteed to clear or settle by the company certifying the funds.
Upon transitioning from litigation to residential transactional real estate, I realized something refreshing. In real estate, everyone wants the deal to close.
In litigation, the interests of the parties are not aligned and the litigants, even in success, are still subjected to extreme stress and the expenditure of significant amounts of money. In a real estate transaction, assuming the buyer wants to buy and the seller wants to sell, the interests of all involved are the same. Everyone wants the deal to close.
Over the past few years, the Consumer Financial Protection Bureau (“CFPB”) has taken center stage for its aggressive enforcement posture. While I have major disagreements with the CFPB’s regulation/guidance through enforcement practice, particularly as it impacts the real estate title industry given the fact that the vast majority of title agencies are small businesses that do not have the resources to hire in house compliance officers or hire expensive outside counsel, its most recent enforcement action seems to be misunderstood.
This is a pretty outrageous statement, particularly coming from the current Chairman of the Standard Forms Committee. A few times a year we handle transactions in which one party or the other decides they don’t want to go through with it. However, sometimes by the time they make this decision, a contract has already been signed and all available avenues to void the contract have expired.
Among the changes to the NVAR Residential Sales contract is a change to provision 12 – Utilities, Water, Sewage, Heating and Central Air Conditioning. Specifically, the following language was added: “Septic Waiver Disclosure provided by Seller (if applicable) per VA Code section 32.1-164 1:1. State Board of Health septic system waivers are not transferrable.
Recently, I saw a good client of Vesta Settlements as we watched our boys playing soccer together. We got to talking and he eventually asked a simple question as he congratulated me on the growth of Vesta Settlements. “What distinguishes your company from the others that allowed you to grow and succeed?”
Several attempts have been made recently in the real estate industry to divert funds from both
Buyers and Sellers during the closing process. The fraudulent schemes typically involve the hacking of public domain email accounts (e.g. Gmail, Hotmail, Yahoo, AOL etc.) and/or the creation of a similar named account through which the perpetrator creates a separate thread of communication.
