Absent! Out-of State Buyer: What You Need to Know

In Florida, we are no strangers to the out of state Buyer and/or Seller. While Sellers and “cash” Buyers can be fairly straightforward to coordinate the Closing with, financed Buyers require more preparation and communication to ensure a smooth Closing.

What are the Issues that Arise with the Out-Of-Sate Buyer?

Closing Date: When the Buyer can sign will be lender specific. The Closing Agent and lender will discuss whether pre-signing can occur or not. The lender may require that Borrowers sign on the actual Closing Date. This means the Closing Agent will not have the original documents required to close under Section 4 of the “AS IS” and Residential Contract (“Contract”) on the Closing Date because the documents will be in the Buyer’s possession. The original documents will not be in the Closing Agent’s office until the next business day after being overnighted back.

The Signing: When the financed Buyers sign in the office, we can make sure the documents are executed properly. When executed out-of-state, if any documents required for Closing are not properly executed, it can delay the Closing. Therefore, it is important to make sure the Buyers have a plan to avoid any delays.

What Are the Steps to Take to Avoid These Issues? 

Define the Closing Date and the Disbursement Date
The Closing Date will most likely rely on the Buyer’s lender. Rate lock dates are important to note. After all parties agree on the Closing Date, an addendum should be executed defining the Closing Date and the Disbursement Date. The Disbursement Date will be the following business day when the original documents are back in the Closing Agent’s office.

Coordinate the Signing and Wiring of Closing Proceeds
The Buyer will need to send their wire on or before the Closing date, NOT the Disbursement Date to comply with Section 4. The Buyer will need a Notary. The Buyer can use their own notary to execute the Closing Documents. Alternatively, the Closing Agent can coordinate a mobile notary who will bring the documents to the Buyer and ship them back to the Closing Agent after execution. The Closing Agent and Buyer should ask the lender if the lender has any requirements when it comes to the notary. For example, some lenders require the Closing Agent to coordinate the notary.

Communication and Funding!
Ultimately, there should be communication during the whole transaction. If there are any questions during the process, the Buyers should be encouraged to reach out to their lender or Closing Agent on the Closing Day. Once the documents are received back in the Closing Agent’s office, they will upload to the lender for approval if required. After approval, the Closing Agent can officially disburse and close the transaction.

If the Closing for the Buyer is not properly planned, the Closing Day can be missed, potentially putting the Buyer in default.

If you have any questions or concerns regarding anything mentioned in this blog, please reach out to your trusted real estate attorneys for legal advice.

Mariah Miller, Esq. mmiller@berlinpatten.com
Mariah focuses her practice on residential real property transactions.

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