Closing Attorneys Hate Transactional Funding?

Why Do Some Closing Attorneys Hate Transactional Funding?

 

While seasoned professional closing agents embrace transactional funding to get deals closed, there are closing agents and closing attorneys who hate transactional funding.  These agents seem to come from a couple of backgrounds that account for their adversity to the legal and successful funding of real estate closings using transactional funding.

 

The first type of closing agent or closing attorney that tends not to like or even hate transactional funding is one who is usually very experienced in traditional closings where the end-buyer had to get conventional (bank) financing to buy the property.

 

With these types of closings the closing agent is under extreme scrutiny from state and Federal regulators because of the mortgages being given the end-buyers.  A goodly amount of the closing documents are disclosures for the buyer and seller and hold harmless agreements to protect the closing agent.

 

Mistakes by the closing agent can be catastrophic even many years later because of the non-intentional violation of mortgage statutes – so these closings follow strict guidelines that the agents do not want to amend – even for cash buyers who do not fall under Federal or State regulations.

 

In addition, the national lenders (banks, credit unions, savings and loans, etc.) have intimidated the closing agents into believing that investors are not entitled to make quick profits (illegal flipping).  So these closing agents stick to their tried and true methods of closing transactions that do not include transactional funding.

 

Another type of closing agent that does not like investors doing transactional funding is one who does real estate closings as a sideline to his other practice.  I have called some of these firms and their “on hold advertising message” is related to their resolving traffic tickets, criminal offenses or other non-investor related activities.

 

The final non-authority on transactional funding who seems to mess up deals is the attorney who represents an end-buyer and who is suspect that every investor is a criminal and he is out to prove it.  He requires document after document that almost has no relevance to a real estate closing.  In one case we had, the attorney for the end-buyer wanted to see the closing agent’s escrow account with the our funds in the account before he would allow his client to send in his money.

 

The above are broad generalizations from our personal experience and not meant to reflect on any specific closing agent, title company or closing attorney.  I suggest you get referrals for investor-friendly closing agents and deal with the end-buyer’s attorney as the issue presents itself.

 

About Dave Dinkel 27 Articles
Dave Dinkel graduated from the University of Florida in 1968 with a BS in Chemical Engineering. He initially worked for a petrochemical research and development company in Illinois. Later he entered the financial arena as a stock and commodity broker with Merrill Lynch.While a stock broker he became a Certified Financial Planner and later started his own brokerage firms and stayed in the financial services industry for 22 years before retiring to pursue his love of real estate investing. After retirement, and because of his interest in business start-ups, he worked with a small company for a few years while driving their sales from under $12,000,000 to over $150,000,000 annually before going back to full-time real estate investing.Dave Dinkel has been a national platform speaker, contributor to local real estate clubs, mentor and consultant to numerous real estate investors and all the while running his own real estate business. Mr. Dinkel received the following degrees or designations: BSChE, FINOP, CFP, MSRP, RSP, RR, ROP, SROP, MGA, GA, Certified Estate Planner, Licensed Mortgage Broker, and Licensed Insurance Agent. He is often referred to as the “Teacher of Teachers” and his Mentoring continues to produce Students who go on to be national real estate "Gurus". .He has been a real estate investor since 1975 and recently received the first-ever Lifetime Achievement Award for Contribution to the Real Estate Investing Community. While being active in real estate investing for over 40 years, he and his wife Nancy have been married for over 52 years. He is most well known for the development of his Mentoring Program that has been called, "The Best Mentoring Program in the Country" which he continues today.In addition to his Mentoring Program, he started a full-service transactional funding Program so that new investors had the ability to do deals with no money of their own. He challenged the funding industry by making borrowing money very simple with his "One Point Funding Program" which has revolutionized the transactional funding industry and made millions of dollars available to investors who otherwise could not have afforded it. Currently his transactional funding is only available in Florida.Get more information about his real estate investing mentor program at http://www.DaveDinkel.com