43 minutes from wire to release and the funder still charged the full day rate

Question

Found out this morning. Funded an A-B leg at 9:04, B-C closed at 9:47, funder's wire confirmed out by 11:23. Total exposure was under three hours on a $214,000 leg in Memphis. Fee was $2,450 flat, which I knew going in, but the term sheet had language about a "reduced rate for same-session closings" that I now cannot find anyone willing to honor. I'm going back through email to see if it was in a draft that got revised before I signed. The closer on this deal says she has seen that clause disappear twice before with this particular funder, not swapped for anything, just gone from the final doc. So I'm sitting here wondering how many other people signed something in draft that said one thing and then closed on a version that said another, because nobody reads the final against the draft when the deal is moving fast.

ayesha_qureshi · Answer

That "same-session" language is real, I have seen it in at least three term sheets from two different Memphis-area funders in the last eight months, and yes it tends to evaporate between draft and execution. $2,450 on $214k is running about 1.14%, which is on the high end. I have been quoted 0.85 to 0.95 flat for same-day double closes in that market recently, so even the full-day rate you got is not the sharpest number out there. The thing that would bother me most is what your closer said, twice before with this specific funder. That is not a drafting error, that is a pattern. Before your next deal I would be printing the draft the moment it hits my inbox, timestamping it, and then doing a literal line-by-line before signing anything final, even if title is breathing down your neck to move.

luis_carrera · Answer

Draft-to-final diff is the only document comparison that actually matters in this business.

43 minutes from wire to release and the funder still charged the full day rate

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