02 Jul Concurrent Closings – A Complex Escrow Challenge
Concurrent closings are a common escrow situation where a client is conducting two real estate deals, and wants them both to close on the same day. It sounds like a simple, straightforward matter of timing; in reality, the request for a concurrent close can be a difficult and stressful affair for all concerned. It’s like trying to line up two flocks of ducks at the same time.
Reasons For Concurrent Closings
A client may ask for concurrent closings for several reasons. Perhaps they are buying a new house, and using the proceeds from selling their current house to pay for it. Perhaps it’s a business deal with a need for close timing. Perhaps they are involved in a 1031 exchange, and the timing of the closings has strong financial implications. For whatever reason, the less time between the closing of the two deals, the more the client benefits.
The challenge in executing a concurrent closing arises because any real estate transaction involves a multitude of agencies and stakeholders. Title agencies must work through the process of transferring title; spouses, business partners, or other parties with an interest in the property need to be consulted; lenders have approval processes that depend on other paperwork being completed in a timely manner. In short, the escrow officer works an impressive feat of organization and coordination in a concurrent close.
It May Be Out Of Escrow’s Hands
The escrow officer is the director of the two transactions. The escrow officer makes sure people have the right information and forms at the right times, follows up to ensure timely completion of the paperwork, and does whatever is necessary to keep things on track. The plain fact is, however, that a concurrent close runs across many desks besides the escrow officer.
There are ways that a buyer can streamline the process, and help bring the timing of two concurrent transactions closer together. The two biggest considerations would be to have the same title company and the same escrow agency handling both transactions. This opens the possibility for workers in the same office to coordinate their efforts, to the buyer’s benefit. Having the same lender will help, too. Keeping the sale and escrow considerations as simple as possible give the transactions a better chance of coming to a concurrent close.
These are some ways to help make two related transactions close on the same day, or close together. However, because of a real estate sale’s inherent complexity and the number of agencies involved, no timing of a concurrent closing can be totally guaranteed. Dealing with a professional, experienced and skilled escrow company can however help to effectively manage the transaction and meet the closing goals of all involved.