Closing Void Due To Nonpayment
Question: Several days after closing we are told that the buyer’s checks haven’t arrived, and the closing is void. Can this really happen? We were selling a home in Watervliet, Michigan on Paw Paw Lake. I'm not sure where to go with my question, so I'm giving this a try. Suppose you have a closing at the title company, all the paperwork is signed and checks are to be cut. Then about 3-4 days later you are told that all of the buyer's money did not arrive at the title company, therefore the closing is void.
Answer: In response to your question, I note the following. What occurred is that your closing agent conducted what is called in the business a "dry closing". The closing is "dry" because neither the Seller nor a mortgage company has provided the money necessary to close. Sellers and Buyers often agree to such closings. The parties have set a time for closing, but the mortgage company does not have all of the i's dotted and t's crossed. The parties will agree to meet and sign all of the paper work, knowing that the title company will hold the signed papers and not record them until the Seller's money is delivered and distributed to the Seller. I have never heard of a "dry" closing being conducted without the Seller's knowledge. I don't know if they mentioned it to you, but at minimum, from what you have written, it was not explained to you properly by the title company or your Realtor. Fortunately, the title company did its job and did not record the papers because they have been returned to you. This appears to constitute a default on the Buyer's part. You would appear to be entitled to the escrow deposit placed with the Realtor. Also, if the Buyer's have moved into the property, they will need to be evicted. If this is the case, then I recommend finding a real estate attorney to help you. He may also be able to get some compensation for your loss.
Attorney: Mark Miller