Both buyers and sellers meet at the closing table to finalize a real estate transaction. Until the closing is complete, no one is paid or the deed is not transferred. But at the last minute, at the closing table, what can be done if either party doesn’t agree on the costs in the HUD-1 Statement or what property they would keep in the house?

Each party to the transaction could regret the price they are receiving (seller) or spend too much money (buyer) and decide not to close. In this case, the seller would get some or all of the escrow, the closing attorney would get the sellers costs (maybe), and the buyer would lose their deposit.

But the reality is that both parties have invested time and money to get to the closing table. It could have taken a few days or in one case of mine, 53 weeks. This took so long due to a triple succession where luckily all parties passed away in one state. On average, most closings take around 30 days or less for investors who have cash buyers and more than 30 days for buyers who have to obtain conventional loans.

If the buyer is determined not to close, they usually just won’t close. If the seller receives a higher offer, he will usually try to get out of the contract well before closing. When the buyer and seller are at the closing table, both parties are usually there with the intent to close.

Our experience is that both the buyer and the seller should receive a Preliminary Declaration from HUD at least one day before the actual closing. This gives both parties time to transfer the charges to the other party, negotiate costs between the seller and the buyer, or request a reduction in costs or attorney’s fees. This would be the time to remove all diffs so that when the shutdown does occur, it goes smoothly and closes quickly.

Our experience is that some investors use the ploy of waiting until actual closing to renegotiate various closing costs. The salesperson wants to close and may feel pressured, but the reality is that he can always say “no.” More often than not, however, he is desperate to close, especially in double-close situations, and even a price cut is not out of the question.

In a recent case, an investor had to close on a specific date or lose the seller side of the deal. The investor had resold the property to a final buyer. The final buyer was a professional wholesaler known for turning the deal around at the closing table. The professional did it again with the new investor and robbed the new investor of his profit on the deal. The professional practically threatened the new investor with the fact that the investment community was a small place and if he didn’t agree to a price cut, he would spread the word about it! The new investor caved rather than get nothing by losing the deal, but he learned a valuable lesson that big deposits are better and to be prepared for anything at closing.