Did I screw up closing on my house?
June 26, 2021 6:18 PM   Subscribe

I'm a first time home-buyer, with closing scheduled on the house for Monday. The closing attorney has asked for the wire transfer (not ACH) of closing funds to be completed by Sunday. Today, trying to initiate the wire from my online bank, I learned that my online bank containing my closing funds refuses to do wire transfers, only ACH transfers. In a panic, I did an ACH transfer of the closing amount from the online bank to my local bank, which can do a wire transfer. I've now realized that there's almost zero chance this money is going to be available in my local account to complete that wire transfer on Monday before closing. How badly have I screwed this up?

I'm coming to Metafilter with this question before reaching out to my real estate agent and the attorney, because I'm really embarrassed about this situation. Here are some more (hopefully clarifying) details:
  • The amount is around 50,000 to 75,000 dollars. This is in the US.
  • The closing attorney will only accept funds via wire transfer, not check or ACH. Even if they did, I don't have checks or a debit card from the online bank.
  • I chose the "immediate transfer" option for the ACH transfer from the online bank to the local bank. According to the confirmation e-mail, this transfer can't be cancelled or changed at this point.
  • The confirmation e-mail says that the transfer will be completed the following day, and that funds will be in the external account in 2-5 days. I don't understand the difference between a completed transfer and the funds being available.
  • Past transfers from the local bank TO the online bank have been completed in less than 24 hours, but I've never done a significant transfer in the opposite direction that I can remember.
  • I don't have any other accounts with that kind of money available to pull from.
  • No branches of the local bank are open on Sunday.
My current (bad?) plan is to cross fingers that the funds are transferred before the local bank opens on Monday and rush there to complete the wire transfer before the scheduled closing time.

Are there any other options that I have?

How soon should I reach out to my real estate agent or the attorney to tell them about this fuck up? From what I've heard, the sellers are motivated to close on the house ASAP. What happens if the money isn't wired by the scheduled closing time?

Thank you!
posted by WhollyMatrimony to Work & Money (14 answers total) 2 users marked this as a favorite
Best answer: Tell your agent, attorney, mortgage broker, title office, priest, neighbor's dog, and anyone else within earshot. They have undoubtedly been in this situation before and will have a plan for you.

I was in exactly the opposite situation, I knew my online banking wasn't going to do the wire transfer so about 15 days ahead of time I started transferring my money over in batches to my operating account. And of course that's when the mortgage people were doing their final bank account reviews and everything and my money was in transit between banks and my mortgage guy's PA called me in a blind panic like omg what happened to all your money.

Long story short, there is a team of professionals involved in home buying for a reason. Let them earn their fees.

(This is the worst most stressful time so please just inform them, grab a comforting beverage, and go immerse yourself in some distracting tv. Be kind to yourself here.)
posted by phunniemee at 6:27 PM on June 26, 2021 [26 favorites]

I refi'd last fall, and there was a grace period of I think 5 days to get the money there? And as phunniemee said, they'll have seen this before. They have undoubtedly already confirmed that you have the money, and they'll work with you on the details.

Call your agent tomorrow. But you'll be fine.
posted by Dashy at 6:41 PM on June 26, 2021 [3 favorites]

I want to second phunniemee; you're a buyer who is *this close* to closing on their house (and with a significant amount of money down; I know this depends on the market, but that's like, 1/3 to 1/2 of what our house cost). If they're "motivated to close ASAP", the sellers are much better off closing with you - even if they have to push a few days - than starting over with a new buyer, who is 30 days out (MINIMUM) from closing if they accepted a new offer tomorrow, assuming that person isn't paying flat cash (and if they had a flat cash buyer, they'd've accepted that offer).

It sucks and it feels embarrassing, but the agents have heard everything twice and it's kind of amazing to me that houses ever get closed on (ask me about my ex buying a sports car a couple weeks before he was scheduled to close on my house, or the lawyers who just could not grock that I'd been partnered with a man and was now married to a woman and kept trying to screw up the paperwork for her signing off on her interest in the house), and especially if this attorney only takes wire transfers, they're used to the transfers getting cocked up. (I'm a whole assed 44 year old adult who owns their second house, and I have no idea how to make a wire transfer). Call your agent and start figuring out how y'all are going to fix it; the sooner there is a plan, the better you'll feel.
posted by joycehealy at 6:42 PM on June 26, 2021 [7 favorites]

Closings slip. It's massively inconvenient to everyone involved but it totally happens. What if someone else had made a similar mistake with the mortgage preparation? In theory they might be able to get nasty and try to keep your deposit but in reality nobody wants that. The path of least resistance is almost always to fix the problem, reschedule the closing, and finish the deal. But tell everyone right now. Let them figure out what they need to do.
posted by wnissen at 6:43 PM on June 26, 2021 [2 favorites]

My mantra when closing, if this deal doesn’t get done, no one gets paid. It’s in everyone’s interest to get this deal done.
posted by advicepig at 6:59 PM on June 26, 2021 [16 favorites]

1) I just had a similar thing happen with funds for an earnest money deposit, and a branch manager at my (Big, Evil, Corporate) bank was able to authorize making the funds available earlier than they normally would have. Might be worth going in Monday first thing to ask about that

2) Take a look at your purchase contract, it may specify a small fee per day if closing is delayed by an issue on your part. That’s likely the worst that will happen. Agree with the above that the seller is really unlikely to cancel the transaction at this point over a couple of days delay.

3) Do let your lender and your real estate agent know ASAP. Your agent will advise the seller’s agent so the seller can make any arrangements they may need to make right away. No need to beat yourself up, just advise that there was a delay in the transfer of funds and they won’t be available Monday, you expect them Tuesday or Wednesday and will be confirming earliest availability with your bank first thing Monday.
posted by tinymojo at 7:03 PM on June 26, 2021

Relax. Everyone involved in this wants the sale to succeed, including the seller. As long as everyone's acting in good faith, this should be annoying but not catastrophic. Talk to your agent.
posted by qxntpqbbbqxl at 7:47 PM on June 26, 2021

Best answer: I know how stressed you are right now and I sympathize. I've done a number of house purchases and refis in my lifetime and they never go smoothly.

HOWEVER, I'm throwing up some caution flags here:

1) The closing agent is asking for the money to be transferred before the closing documents are signed, and

2) They're asking for a wire transfer on a weekend.

There have been multiple warnings about the rise of real estate fraud where someone intercepts the real estate or title company's email and gets you to transfer your money to a different bank where it disappears before the true agents can discover the fraud.

(Red flag #3: ACH transfers can be reversed if caught quickly enough. Wire transfers can not!)

On my last refi I had specfic, verbal, instructions to call the closing agent after the signing and verify all my information by voice and then repeat the wire instructions number-for-number three times before starting the wire.

You haven't done anything wrong, and in fact if this is fraud you may have saved yourself a world of trouble. If you do get contacted by this closing agent/lawyer again, reference that web link above and say that you're not moving a goddamned cent until you have verifiable information handed to you in person. At. The. Closing.

Your home is not doomed. Like Phunniemee said, you have the right to transmit funds after the documents are signed within a certain funding window. And it's never on a Sunday.

So take a deep breath, take it slow, and keep your eyes open. Good luck to you.
posted by JoeZydeco at 7:50 PM on June 26, 2021 [22 favorites]

And one more thing: it's a white hot market (as you're probably aware) and the seller of your new home is almost certainly needing those proceeds like yesterday to complete whatever home they're trying to buy.

But that's not your problem. Don't let anyone pressure you into working any faster than you are comfortable with.
posted by JoeZydeco at 8:13 PM on June 26, 2021

I worked in in an electronic banking department some years back, and wire transfers do not go through on weekends. So your closing attorney set you up for this hiccup - Friday would have been the best day to attempt to initiate the wire and uncover this problem.

I would call your local bank first thing on Monday. They should be able to give you more information about when to expect the money (fwiw, I think you have a shot of having the funds post on Monday) and whether it's okay to immediately wire the funds to a third party.

However, I agree that delaying the closing is not the end of the world. Good luck!
posted by toastedcheese at 8:57 PM on June 26, 2021 [1 favorite]

Perhaps I’m ignorant but a wire transfer before close makes no sense. Shouldn’t the title company be supervising this on Monday? They can make sure the wire happens during signing so everyone can leave knowing the sale is done. Since a wire is verifiable there’s no reason to have started it early.

I recommend a voice call with the other parties to explain what happened and to schedule a new close/transfer date.
posted by michaelh at 10:32 PM on June 26, 2021 [1 favorite]

When I closed late last year, I did have to wire the money the day prior. (It went to escrow, no-one got paid until I signed the papers.)

But I second JoeZydeco's concern about the safeguards around the transfer. My wire process involved emails and phone contact and verification codes, to be certain thieves couldn't derail the transaction.

I also had a funds-in-the-wrong-account issue at my first closing. It worked out fine, and I hope yours does as well!
posted by mersen at 3:42 AM on June 27, 2021 [2 favorites]

Best answer: I am a real estate attorney and this isn’t even close to to worst or most “embarrassing” thing someone’s done. It honestly wouldn’t even register in my radar as anything more than low level last minute annoyances. Tell your attorney Monday morning, call your bank, and I’m sure it’ll all work out. Worst case is you dry close or you extend the closing date by a day or 2.
posted by katypickle at 6:32 PM on June 27, 2021 [3 favorites]

Response by poster: We closed on the house!

Thanks everyone for talking me down and helping me get over the embarrassment. After explaining the situation to all the involved professionals, everything went fine, exactly as everyone suggested would happen.

Also thanks to JoeZydeco and toastedcheese offering a word of caution and pointing out that wire transfers don't happen on weekends. In retrospect, I'm a tiny bit annoyed that the attorney gave the instruction completed on Sunday when that was never going to happen. I was extremely careful to verify the wire instructions over the phone (using the number from the website and NOT the e-mail) as well as getting in-person confirmation at the signing that the numbers were correct.

For anyone else who might stumble into this situation, here's what went down:

Right after posting this question, I reached out to my agent and the closing attorney explaining that there was no chance that the wire would go through before the scheduled closing. They seemed annoyed but not concerned.

First thing Monday morning, I went down to the bank to see if they could make the funds available early, which they said they couldn't do. I also called the main office of the bank as well to see if I could escalate, but person who answered didn't seem to know how ACH transfers worked. Not great!

Monday evening, the closing attorney was able to set up what they called a "close in escrow" where we signed all the documents with the sellers, but the deal wouldn't be executed until the funds went through. The sellers had just had a baby, so they were extremely ready to get this all wrapped up, and went ahead and gave us the keys with the understanding that we wouldn't use them until the deal was official. The seller's agent was pretty anxious about that, but I think everyone was pretty keen to move forward.

The ACH transfer finally went through on Tuesday morning, and I was able to get the wire completed without issues. The attorney immediately confirmed receipt, got the deed transfer filed, and we officially got the house!
posted by WhollyMatrimony at 11:12 AM on June 30, 2021 [17 favorites]

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