Jay Thompson is a former brokerage owner who spent six years working for Zillow Group. He retired in August 2018 but can’t seem to leave the real estate industry behind. His weekly Inman column publishes every Wednesday.
“Clear to close” are words that any homebuyer longs to hear. Two months ago, my wife and I began the long, sometimes frustrating, frequently anxiety-inducing, always enlightening process of buying a home on the Texas Gulf Coast.
In previous columns, I’ve chronicled the process of how we found our agent and how invaluable she was in getting through the trials and tribulations of showings and having an offer submitted and accepted.
That last column left off with us waiting for the appraisal to come in. This is the part of the homebuying process that will make you want to eat Xanax like M&M’s — trust me, the anxiety is overwhelming at times. Our agent assured us the home was well-priced, but anyone reading this knows that’s no guarantee the appraisal won’t go south.
Fortunately, the home did appraise (for $1,000 over offer), and we were on to the next part of the ordeal — underwriter approval for our mortgage. Time to break out the pharmaceutical M&M’s again. If you ever want to feel what it’s like to have zero control or influence over what is in many ways a life-changing experience, apply for a mortgage. All you can do is not do something stupid like buy a car or whack your credit while your financial history is examined under a microscope.
So we waited. And waited. The clock ticked louder and louder as closing day approached. We were holed up in a small Airbnb with our 20-year-old cat and a cockatoo that for obvious reasons didn’t get along well, wondering as the days rolled by what we would do if the closing date slipped.
Our lender did its job well, and our worries were quashed when we got that magical message: “You are clear to close.”
The closing process needs ‘disrupting’
There is almost constant chatter about “disrupting” real estate brokerage. Venture capital money is heaped on startup brokerages, some IPOs actually happen, some are speculated on for months or even years. It seems like everyone wants a slice of the real estate commission pie. IBuyers are going to change, or end, traditional real estate sales, depending on who you choose to listen to this week.
You know what really needs a healthy dose of disruption? The closing process. On the day of our closing, we walked into a title office. A glance into the back offices showed the usual scene — stacks of paper literally 3 feet high. Files everywhere. A printer ran constantly in the background.
In the office where we would sign, there were plexiglass panels across the table, placed there to separate us and our potential COVID-19 breath from the title rep. That is (hopefully) a temporary thing. What wasn’t temporary was the cup full of ink pens needed, of course, to sign and initial the mountain of paperwork we were about to face.
First up was signing a document that would confirm the signature we’d use to sign the rest of the documents. Yes, we had to sign a document saying this was our signature. For fun, I thought I’d count the number of times I had to sign or initial something. I stopped counting somewhere around 25 when I accidentally signed in my wife’s spot. That required three people’s initials, another signature, and maybe donating my first-born child to charity. I don’t remember.
We signed and signed, initialed here to accept something and there to decline something else.
Why? Why all this paper and signatures and initials? A small rainforest was destroyed to generate the paper required to close this transaction. Until that moment in time, every document from purchase contract to multiple addendum had been signed electronically. Now, we’re sitting across the table, sliding paper under the plexiglass barrier and exchanging pleasantries like folks visiting an inmate in prison.
My pen literally ran out of ink. The closer just pointed to the cup of pens, and we kept going.
Of course, these are a bunch of legal documents, and the law requires you memorialize them with a signature. But if electronic signatures are good enough to cement a purchase agreement, why can’t they be utilized for all the other closing documents? Doing that would, if nothing else, save the trees — and our sanity. Can’t some “disrupter” come up with a way to reduce closing paperwork?
I didn’t read a word of the docs, and it still took 45 minutes to sign and initial my life away. Before someone lays into me for not reading what I sign, please know I read everything before getting to the title office. I read it on my laptop, all the while wondering why I couldn’t just click to sign and initial as I scrolled through.
Back in the day, when I actively sold real estate, I had one client who chose to forgo pre-reading and read every single page at the signing. It took four hours. The title rep called in lunch. It was ridiculous.
Someone needs to streamline the closing process. Make it simple, understandable and paper-free.
Agent returns message (way too late)
When the last blood was drawn and the final document signed, the closer gathered the pile and headed to some dark recess of the office to enter God knows what into “the system” that would distribute the funds we’d wired the day before, along with our loan proceeds.
In Arizona, where I sold real estate and am licensed, the buyer doesn’t get possession of the property until the deed is recorded by the county. Apparently in Texas, possession takes place when funds are distributed. The title clerk returned from the darkness, smiled and said, “You’re funded.”
Our agent handed us the keys, the title rep slid her commission check under the spit barrier, and we took the requisite photo with the big giant key. We are now the thrilled owners of a wonderful home in Texas.
This is technically where the story of our quest ends, but because I’m writing this for a real estate audience composed primarily of agents and brokers, there’s one more thing I need to share.
Twenty-five hours after we got the keys to the house, my phone rang. I rarely answer my phone, but this was a local Texas area code, and we were expecting calls from utility companies, an internet provider, delivery drivers — all those folks who make a move happen — so I answered the phone.
Here is how the conversation went:
Caller: Hey! You sent a message about buying a home down here in Texas. How can I help?
Me: (Lengthy pause while I processed this.) Hmm … you mean that one I sent back in March?
Caller: Yeah, I guess it’s been awhile.
Me: We closed yesterday. Found a great agent who’s probably out shopping today.
I started to get a sales pitch, a request for referrals or some such nonsense, so I wished this agent a good day and hung up.
The caller was one of the three agents I initially contacted, finally (after nine weeks!) returning my inquiry. The third agent is still missing in action.
I hope in this series of columns you’ve learned a few things. Maybe you were reminded of the stress and anxiety your clients go through. If you’ve learned nothing, please at least learn to answer your phone and reply to messages. Don’t be the agent calling nine weeks too late.
For more on the state of electronic signatures amid COVID-19, click here.
Jay Thompson is a real estate veteran and retiree in Seattle, as well as the one spinning the wheels at Now Pondering. Follow him on Facebook, Instagram and Twitter. He holds an active Arizona broker’s license with eXp Realty. “Retired but not dead,” Jay speaks around the world on many things real estate.