Moving Across the World
Thankfully, international travel restrictions are becoming a thing of the past. Paddy McBuyer, like so many others, decided to test his luck and make a move across the rainbow from his native Ireland to the pot of gold that is sunny Florida. After securing a pre-approval for his loan and surviving a brutal bidding war, Paddy finally executed a contract for the perfect home. As luck (or fate) would have it, St. Patrick’s Day, his favorite holiday, is the Closing Date! There was only one problem: Paddy had never missed his hometown St. Patrick’s Day celebration, and he was not about to miss his last one. Paddy informed his Closing Agent of his dilemma. It turns out accommodations could be made for Paddy to sign remotely as long as Paddy carried out his obligations to close on time.
What obligations need to be met for the transaction to be “closed”?
Section 4 of the FAR/BAR Contract states that the closing shall occur
“when all funds required for closing are received by Closing Agent and Collected … and all closing documents required to be furnished by each party according to this Contract are delivered.”
The Contract further clarifies that a Closing Agent may delay the closing and disbursement of funds until funds necessary for closing have been collected and deposited in the Closing Agent’s account. Collected means that the funds have truly cleared and are presently available, not that the Closing Agent merely has a check in hand. Because of this, Closing Agents cannot accept checks on the Closing Date but instead require wires, which, when received, are available immediately.
What does this mean for parties signing remotely or even internationally?
As mentioned above, Closing Agents generally have the tools to accommodate remote closings, even when taking place internationally. However, Paddy will need a little more than just luck to close his loan on the Closing Date. Paddy turned green with dread when he realized he had to make arrangements to sign all of his loan documents, have them properly notarized, and mail the original copies back to the Closing Agent by the Closing Date, which was just days away! Additionally, Paddy had to wire the closing funds to the Closing Agent by the Closing date.
Relying on his famous luck, Paddy procrastinated until the day before closing before ultimately and properly executing his documents, mailing them back, and making arrangements for his bank to send his wire. Phew! Paddy was free to drink all the Guinness he could handle while enjoying his favorite holiday before jumping across the pond to his new life in the U.S.!
What can go wrong?
As Paddy awoke the following day, he quickly learned that his most minor concern was his headache from festivities the night before. The Closing Agent was regretful to inform Paddy that his international wire had not been posted to their account on time. They typically take at least 48 hours to arrive, and the closing documents were still in transit, as he did not send them for overnight delivery. Paddy’s already queasy stomach sank as he learned the Sellers did not intend to extend the Closing Date and instead made a claim for the Earnest Money Deposit. Worse, they were re-listing the property!
Tips to avoid issues when signing remotely
Paddy’s luck had finally run out, and it all could have easily been avoided if he followed these few tips:
- Make a plan to sign your documents with a notary as early as possible. If the Buyer is getting a loan, it may not be possible to sign before the Closing Date, so this will be vital information to make plans and put the opposing side on notice regarding when the closing will occur, and funds can be disbursed. Finding the proper notary overseas can be challenging, so adequate planning when signing overseas is even more critical.
- Do not wait to send your wire until the Closing Date, especially when sending an international wire. Remember, the funds must be “collected,” not just sent.
- If a remote signor expects to experience unique challenges, it is essential to communicate with the Closing Agent early and often and plan. Most, if not all, challenges can be overcome with proper planning.
Paddy ultimately learned his lesson and found the right home here in Florida, but proper planning and communication could have avoided his cautionary tale. If you have any questions regarding how to ensure your remote closings don’t suffer a similar fate, please do not hesitate to reach out to a trusted local real estate attorney.
Andrew Conaboy focuses his practice in the areas of residential and commercial real property transactions. Andrew is a dedicated advocate for the rights and interests of every client, and prides himself on building lasting relationships with each client he is fortunate enough to represent.