Salvaging a dead transaction: when a client refuses to sign.

Never underestimate the power of a cup of coffee

A few months ago I met with a client at their home in the Woodinville area. After introducing ourselves to each other we sat down at the kitchen table and started going over paperwork and loan documents. The gentleman slowly started to go over the loan documents in a methodical manner which is not unusual. Prior to each signing appoinment one of the very first things I mention to our client is that I’m not in a rush and they can take all the time they need. I indicate that there are a few important documents they need to pay particular attention to while the other bulk of the loan package is a series of disclosures, much of which is boilerplate and typical of most lender loan packages.

Probably 15 minutes into the signing it was evident that the demeanor of the client was changing. Not only was the scrutiny of the documents going slowly but question after question started to flow, one after the other. The client decided to stop the appointment and make a phone call to his loan officer. After a brief discussion, the client hung up the phone and informed me that the transaction would be on hold.

Naturally, your mind starts to spin a bit and I sensed that the gentleman wanted to digest the information more carefully, perhaps without the pressure of anyone being present. I informed the client that it was not a problem and I would be in touch to schedule another time to mutually get together and sign the documents.

coffee cup

We’ve been in each other’s company for about an hour by this time and I told him to “not worry about the transaction, at least I met another new friend!” At this point the gentleman offered me a cup of coffee. Hmm. That sounded really good and was my invitation to build trust. We sat down at the table over the coffee. I’ve never had a better brewed latte—this guy really knew what he was doing. Silky smooth and wonderful. We started to discuss absolutely everything: his house, our families, kids, the real estate market, interest rates, etc….

The gentleman was from Turkey and it was another lesson in assisting clients from other cultures and the way in which you build trust. The rest is history. Three and a half hours later I had a happy client, happy customers (loan officer/agent), and signed documents in my hand ready for a funding package to be completed and overnighted to the lender.

34 thoughts on “Salvaging a dead transaction: when a client refuses to sign.

  1. Tim, that’s such a nice post. It’ so easy to get into a “mode”–I think especially for escrow since you’re the “catchers” in the game…only meeting the true consumer at the tail end of the transaction for an hour or so.

    What was the clients issue with the loan package?

  2. Hi Tim,

    Glad to hear it all worked out. Seattle is such a melting pot, this is a reminder for all us to even be more sensitive to style, personalities, and different cultures.

    I always tell my buyers to make sure they get copies of the loan documents ahead of time, so they can peruse the forms at a leisurely pace. Escrow can be a pretty stressful time for people, even if they don’t act like it is when they are at the signing appointment. It can be scary to sign documents an inch thick. At least this gives buyers an option before going into the signing appointment.

  3. I think the fact he was from Turkey is why he made great coffee, not why he was reluctant to sign the documents. In fact I was wondering if his issue was waived away or resolved? The article doesn’t say.

  4. I think the crux of the issue was really comfort and trust. The gentleman was very interested in our discussion about home improvement and the market and interest rate volatility. When I think through this, it also makes sense that he may have, through no fault of his own, thought that I was an extension of the bank or loan officer. Perhaps our role as escrow was murky, but I’m guessing.

    Ardell- yes! I think his being from Turkey clearly was a factor in that coffee.

    Rhonda- when we go through the loan documents so many times, it is easy to sound like a robot, so I also mention that if I sound like a broken record, to please stop me and ask a question if they have one.

    Debra- I really wish we could get loan documents to the borrowers to review, but the reality is that the majority of cases it won’t happen. My wife tells me to get over it. The only thing escrow can do is to call the borrower to make sure the terms are what they expect before we make appointments to sign. I hear ya!

  5. My favorite is turkish grind in a Bialetti. I know my coffee 🙂 One of our agents who is Portuguese made me a cup of real Turkish coffee this weekend, so it was fresh on my mind.

  6. Hi Tim,

    I know you are held hostage to how quickly the bank gets loan docs to you. Too often, it is at the last minute, making it difficult to give the buyer time to review ahead of signing.

  7. Tim,

    Do you ask if they would rather lose their Earnest Money than proceed? I think if asked that question, some people would say yes.

    I have had that happen on occasion. I say if you are willing to lose your Earnest Money, then let’s stop right now. I tell them they may not lose their Earnest Money and we can do everything possible to prevent that. But if their gut is saying they’d rather lose the Earnest Money than proceed…it’s over.

  8. Marc-

    We’ll see. Did write most of it, but am debating whether it’s helpful for people or not. It could really be construed the wrong way in the blogging world. It’s a hot potato.


    Hot potato. The impact of not going forward is really outside of the escrow world. That’s is a question for the agent to discuss directly with their client.

    PS. what is a Bialetti? (I feel dumb, sorry).

  9. It’s an Italian coffe pot. You’d probably know it if you saw it. Can’t post photos in the comments anymore, or I’d showyou. It’s kind of like a percolator, but the coffee is stronger.

  10. As a potential first time homebuyer, I find this a great site. The closing seems like the culmination of everyone’s hard work. I’m a little unclear, why I wouldn’t be able to get the loan documents to review prior to the closing. When I do make the likely largest financial transaction of my life, I would want to be as prepared as possible.

    Tim, why do you state: “but the reality is that the majority of cases it won’t happen.”

  11. My first time-

    Superb question. Because the majority of the time, lenders do not get loan documents to escrow in time for you to review the documents a day or two or three prior to your signing appointment.

    Unfortunately, in too many cases, escrow will receive loan documents at the very last possible moment in the transaction timeline. Therefore, once we receive loan docs, escrow works up the paperwork and Settlement Statement and calls the client to make an appointment to sign the documents, sometimes on the very same day (a real thorn in the side for escrow firms) or night escrow receives them. In an ideal transaction, escrow will receive loan documents well ahead of time, allowing escrow time and perhaps allowing time for the client to review the loan docs prior to your signing appointment. When that happens all the client is doing is signing paperwork, which saves you time and is a huge time saver for escrow (no 3 hour signing marathons).

  12. Tim,

    If this is a continuous problem, why aren’t agents writing contracts for 45 days instead of 30? Do you think that would help? Or would lenders still wait until the last minute?

  13. Ardell,

    Wouldn’t change a thing (says Lynlee). Give the lender a 30 day window and they’ll take it up to the last day a clients can sign both in a purchase or rescission period in a refi. Not always, but in too many cases.

    Buyers or refi folks,

    if you want to review loan docs ahead of time, you’ll have to press the issue with your loan officer to get the documents to escrow who can forward the important stuff for review prior to your signing appointment.

  14. Hi My First Time,

    When interviewing your loan originator, BEFORE you commit to working with him or her, ask for the LO to commit to you, in writing, that you will be able to review the final HUD I Settlement Statement one day prior to entering the signing room.

    If this person balks, calmly let him or her know that under a federal law called RESPA, the LO must comply with your request.

    If that person is unfamiliar with this part of RESPA, continue your search for an LO.

    Here are two links to the HUD website which explains homebuyer’s rights under RESPA.

    Good luck! Feel free to come back and tell us how everything turned out for you, or to ask any other questions.

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