When a closer will do the double close but won't sign the transactional funder's escrow instructions

A recurring friction point in transactional funding shows up when the closer and the funder disagree on the escrow instructions themselves. Take a file set to close in a few business days: a buy at 148,000, a resell at 176,000, an end buyer with a local bank loan already committed and clear to close. The transactional funder wants a flat fee and wires the buy-side funds into escrow that morning. A closer experienced with double closings will often do two closings on one day without issue, but some will not accept a funder's escrow instructions as written if those instructions require certifying that the second leg is funded before the first leg's funds disburse. Many underwriters won't let a closer certify a future event, only confirm receipt of good funds already received, and that's a real underwriting limit in a lot of shops, not simply habit. When a funder says their standard closers sign that language routinely and offers an approved closer instead, the tradeoff usually comes down to cost and timeline: a new closer typically means an added fee, unfamiliarity with local recording practice, and re-papering the bank side, all under a tight clock. The shortest path in most cases is getting the funder to redraft the instruction into a form the existing, trusted closer can sign, since that preserves the bank relationship already in motion and avoids re-papering. Moving to the funder's approved closer is the fallback when the funder won't budge on the language, and shopping a different funder whose instructions are already closer-friendly is worth keeping in reserve given how few business days are typically left on a file like this.

monica_tran3 SF2APRO 15

Answer

tonyv88 PU4APRO 10

Her objection is real and it's fixable with wording, so that is the shortest path forward. What a funder wants is protection against their money disbursing into a first closing when the second one never funds. What a closer can actually sign is a conditional disbursement instruction: hold the funder's wire in escrow, disburse on the A to B only simultaneously with receipt of good funds from the C side, and if C side funds aren't received by a stated time, return the funder's wire the same day. That is a present-tense obligation about money that can be seen and verified, which is a different thing from certifying that a future closing will occur. Most funders accept it because it gets them the same outcome. That language should go to the funder directly rather than asking the closer to negotiate it herself. Escrow officers tend to be slow at drafting and fast at signing something already clean. One other thing worth nailing down in the same email: recording sequence and timing, which is state specific and sometimes county specific. Ask whether both deeds record on the same day and in what order, and whether the funder's payoff sits before or after recording. If the funder is also recording and releasing a mortgage, that is a third and fourth document in the same queue. Swapping closers days out with a bank package already in flight is how a Friday closing becomes a Wednesday two weeks later.

tonyv88 PU4APRO 10

5 replies

aaron_fitz10 PU1APRO 13

@tonyv88 the conditional disbursement wording is worth keeping on file for the next one of these. @monica_tran3 does the bank on the C side know their borrower's seller is acquiring title the same morning? Local banks are usually fine with a same-day chain of title, but some carry a seasoning rule buried in the credit policy that can catch a file by surprise.

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aaron_fitz10 PU1APRO 13

aliyah_bActivePRO

On the 400. If the approved closer solves the instruction problem and your closer doesn't, 400 against a 28,000 spread isn't the deciding factor. The deciding factor is that the bank package is already with your closer, and re-papering that is days you don't have.

aliyah_bActivePRO

tylerbrooks9 AO1APRO 10

A closer who actually reads instructions before signing them is worth more than any flat fee on the table. Keep her and fix the paper.

tylerbrooks9 AO1APRO 10

nicole_adeyemi SS3APRO 13

Worth asking one more thing while the closer is on the phone: whether her underwriter has a position on issuing the second owner's policy on the same day, and at what rate. In some states there is a short-term or reissue rate on a quick resale and in others there is not, and that can swing a few hundred dollars either direction on a 176,000 policy.

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nicole_adeyemi SS3APRO 13

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