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Learning to Go with the Flow When Things Go Wrong in Real Estate

by Sharon Vornholt on January 14, 2014 · 18 comments

  
Go with the Flow

Somewhere along the line, we got the idea that life was supposed to be perfect.

When things are anything less than perfect, we all moan and groan. I’ve had a revelation this year where that is concerned and in the process, I have learned that when you just take a deep breath and learn to go with the flow life is so much easier and so much more pleasant. Besides, we usually can’t change the situation anyway. And with real estate investing, “There’s always something”.

Imperfect Is the New Perfect

I have also come to the conclusion that “imperfect” is actually the norm. It is how we deal with all of these imperfections that ultimately will determine not only our success but our happiness and our state of mind. When things seem to blow up in our face we get to choose how we react. And it is during those times that the people on our team get a close look at how we conduct ourselves and how we do business.

My Last Closing of the Year

I had a closing the last week of the year that should have taken less than 30 minutes. This process ultimately took about 5 days before it was finally complete and I had a check in my hand. As a general rule, closings go pretty smoothly in my world. Since most of my closings are double closings or “simultaneous closings” there is always the risk of “double the trouble” right from the beginning. My closing attorney (and his staff), are some of the most important members of my team. Whenever a problem crops up they just take care of.

My sellers in this transaction were two sisters that were residing in different states. One of the sellers actually lives in my city, but had gone to Florida for the winter. This house was part of an estate and the way this had been set up both sisters had to sign the paperwork. My closing attorney sent all of the necessary paperwork to the sisters with instructions to return it to his office.

Simple enough right?

One of the sisters did exactly that. She returned the documents in the overnight envelope that was provided. The other sister mailed the paperwork to the probate attorney who never bothered to forward the documents to the closing attorney. The day of the closing, we were still missing the documents. So they got the probate attorney on the phone to let him know someone would run over to his office to pick up the missing documents.

This is what he said; “I’ll have to see if I can find the paperwork, and we are closing early. We plan to leave the office at 12:00 today”. Was anyone there when the courier arrived? Nope. No one waited for him.

Problem Number Two; Insurance

My buyer was using a local bank for his construction loan, so he needed proof of insurance. As soon as the house was under contract he promptly called his insurance agent. After leaving numerous messages with both the insurance agent and the company itself, he still didn’t have the insurance binder on the day of closing. In fact he had nothing but a bucket full of excuses. The insurance binder finally came several hours after the start of the closing, but not before we had all gone home.

The Check is Made Out to Whom?

As I said, this particular buyer was using one of our local investor friendly banks. They were ready to close in about 7 or 8 days from the date of the accepted contract. I was really impressed by this and also with the man who represented the bank. While we were waiting for everything to get sorted out, we spent time talking about customer service and the benefits of working with small, local businesses.

At one point he looked in his folder and stared at the check. He held it up and said, “I’m not sure how this happened, but the check is made out to the wrong attorney. I will have to arrange for a wire transfer.” All we could do was laugh.

Get Mad or Get Over It?

Two hours after our 9:30 am closing began we all packed up and went home. What we had was a dry closing. The documents were signed, but we were still lacking:

  • The missing signed documents
  • The insurance binder
  • The wire transfer

Since the offices were closed on New-Years day, roughly 5 days after the start of this process we were finally finished. My last closing of the year ended up being my first check of the New-Year.

As you can see, things generally work out in the end.
Photo Credit: VernsPics

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{ 18 comments… read them below or add one }

Karin DiMauro January 14, 2014 at 8:28 am

Thanks for a valuable post, Sharon! I think those of us who are still new to the business have this image in our mind where everything becomes smooth and runs with military precision by the time we reach a level like yours. I’m actually glad to know this isn’t the case! It means that, while I still have a lot to learn about the components I can control to ensure things run smoother, that maybe some of those bumps weren’t entirely my fault and will happen regardless. ;-)

This is also a good reminder for those of us who are recovering perfectionists! “It’s always something” – yes. And thinking of that as the new norm … genius. And ever since I heard it, I’ve loved the phrase, “we get to choose how we react.” It’s always great to be reminded of that, so thank you!

I was wondering about the missing probate documents – did you feel like someone should have discovered that the day before the closing, and tried to run over to the probate attorney’s office that day? I don’t mean to ask you to point fingers, am more wondering about processes and whether there was a way to avoid having everyone at the closing table before that issue arose. (Of course, you still would have run into the insurance problem!)

Thanks!

Reply

Sharon Vornholt January 14, 2014 at 8:59 am

Hi Karen –

I am also a (partly recovered) perfectionist. I have to say “stop (to myself)” all the time. If you wait for things to be perfect they will never get done, and this is a hard thing for folks like us to do. Over time, I have learned that most problems that crop up can usually be fixed; probably not on the timetable you wish they would be fixed, but never-the-less they can be fixed.

No matter how hard everyone tries to make things work out perfectly, they rarely end up being perfect. So ultimately it is up to each of us to find a way to deal with that. There was a time when I let all those things keep me upset and unhappy. One day I just made the decision not to do that anymore. I have just accepted that as the new normal in my business.

Regarding those documents, this closing happened very quickly during the holidays. The documents were expected to be back in my attorney’s office on Friday. When they didn’t arrive, they called the seller and she told them she had mailed hers to the probate attorney’s office. They tried unsuccessfully to reach the probate attorney on that day and I was notified of the problem. They began calling his office again on Monday, and they left multiple messages through the day of the closing which was Wednesday morning at 9:30am (New Years Eve).

Finally the probate attorney returned the call and left that very unprofessional message with my attorney’s office. On my end, they did everything humanly possible. That was a much different story with regards to the probate attorney. This was a “one man show” and I suspect he really didn’t care how that affected all of us. He was going home early- period.

One thing is for sure, you need to expect the unexpected with every deal. Thanks for your comments.

Sharon

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Karin DiMauro January 14, 2014 at 9:21 am

Thanks, Sharon – that scenario now makes a lot more sense to me. I figured you hadn’t just discovered there were missing docs at the closing table. And I’m finding there are more people like that probate attorney than I’d like! Kudos to you and your team for getting it done in a pretty timely manner considering the circumstances.

And I’m laughing about the comment regarding the timetable because it really hits home. No one ever moves fast enough, do they? hahaha That’s one of my latest lessons: take my ideal time frame, then determine what I will “settle” for, and as long as the work is done well, accept it and move on.

Thanks again!

Reply

Sharon Vornholt January 14, 2014 at 9:59 am

I like that Karen – “Decide what I will settle on”.

No one moves fast enough for me. I always want it yesterday! LOL. But, I know that is MY problem not theirs. Thanks for reading. Be sure to stop by my blog too. I just launched my new podcast series today.

Sharon

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Ben Leybovich January 14, 2014 at 12:14 pm

Sharon – some people make sense when they talk; you are one of them :)

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Sharon Vornholt January 14, 2014 at 4:02 pm

Thanks Ben. Coming from you that is quite a compliment.

Sharon

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Martin Cortez January 14, 2014 at 1:06 pm

Sharon,
You are exactly right about imperfect and the unexpected being “the new normal” regarding closings. It’s no fun to walk away from a closing with nothing more than empty hands where a check should have been.

Here is where an experienced and proactive escrow officer is worth their weight in gold. I was fortunate to find such an individual who saved many of my closings from a similar fate. This escrow officer was always on top of things and basically viewed each transaction as though Murphy’s Law was inevitable – “if something can go wrong, it will go wrong, at the worst possible time.” I cannot remember ever going into a closing where she did not have all the documents, signatures and checks properly accounted for.

So search far and wide and do not rest until you find that indispensable escrow officer or title company. They can save your sanity and make everything flow smoothly.

Reply

Sharon Vornholt January 14, 2014 at 4:04 pm

Martin –
This company does exactly that; they make everything (appear) seamless. The problem was the unprofessional probated attorney. He wouldn’t even return the calls to my closing attorney. It all worked out in the end.

Sharon

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Michael Woodward January 14, 2014 at 2:29 pm

Excellent article Sharon! I love articles like this! Attitude is the rudder of life. Fortunately, we each have our hands on the controls and can determine our direction. Thanks for keeping it real!

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Sharon Vornholt January 14, 2014 at 4:06 pm

Michael-

Attitude is certainly what usually determines how you feel. We don’t always have a lot of control over our circumstances, but we can control how we react to them. Thanks for your comments.

Sharon

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Sharon Tzib January 15, 2014 at 7:40 am

It’s always nice to have a check to start the new year off with! A positive attitude is your best offense when dealing with closings. Nice article, Sharon!

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Sharon Vornholt January 15, 2014 at 7:43 am

Sharon –

It’s always a nice way to start the year off. Thanks for reading.

Sharon

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Rachel January 18, 2014 at 1:01 pm

Great stories, Sharon!

Being in the business for as long as we have, we both know there’s never a dull moment! Though things may not always go as planned, there’s something new to learn from every transaction which makes it a unique experience in itself.

I just finished one up where we needed one more document to close — I can definitely relate. Though, I got what we needed and we were able to get the deal done.

Even though I almost had a heart attack (these surprises at closings really stress me out!), I learned from the situation. And, that is what is most important — we learn from our experiences.

I really enjoy reading your stories, thanks so much for sharing! :)

Reply

Sharon Vornholt January 18, 2014 at 2:21 pm

Rachel –

Those things used to give me a heart attack too. But I have really tried to change my way of thinking. Everything usually works out in the end. Great to hear from you, and I’m glad you got yours closed too. We will always have stories won’t we? If you get a chance to listen, I have a new podcast series. Episode/Interview #2 will be up on Monday.

Thanks
Sharon

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Shaun January 18, 2014 at 5:47 pm

So other than no insurance, no documents and no money it went pretty well! :)

On a positive note getting pushed into the new year instead of paying the taxes on it in 4 months you get 16.

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Sharon Vornholt January 18, 2014 at 7:57 pm

LOL Shaun. That about sums it up. It was New Years Eve so it took a little longer. How is your year starting out?

Sharon

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Shaun January 18, 2014 at 10:42 pm

Starting good (at least if I first closing on a rehab sale in 10 days goes better than this one did for you :) ) so far.

Had a lot to review for 2013 and am really trying to keep the momentum for the things that went well and put the breaks on the things that didn’t.
Working on better focus and forming new habits that will improve all aspects of my business and personal life.
Actually should thank you for helping with that since I got inspired by “The Compound Effect” that I got after you recommended it on here a couple months ago.

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Sharon Vornholt January 19, 2014 at 3:22 pm

The Compound Effect is A Great Book. I actually need to pull it out again.

I have been doing the same thing. Figuring out what worked and what didn’t. Good luck on your closing.

Sharon

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