It's Tuesday afternoon, just wrapping up a couple meetings that have been WAY too long. Looking forward to heading home, eating a meal and planning what to pack for our trip out to Tennessee for the closing on Friday. "Only three more days" I think to myself, "then we’re really locked in!" About that time the phone in my pocket starts buzzing incessantly. One ring doesn’t really surprise me, but multiple calls in a row gets a little worrisome. Now I want out of this meeting even more.
I head to my office and check the missed calls. All 615 area codes. Interesting. That’s Nashville and the surrounding area, so certainly this has something to do with closing. I hope this is routine and not trouble.
Many farmers along the way have grinned back at us with huge smiles and said, “Boy, I sure can’t wait to hear your stories!” They then proceed to regale us with tales of botched deals, broken vehicles, lost money, and other mistakes that I hope we’ll never commit. Secretly in my head I always think, “wow, that’s a bummer for them, but I’m sure we’ll sail more smoothly.”
So I pick up the phone and call my voicemail. Broker. Lender. Attorney. Closing on Friday might not happen after all, they say. That’s only three days away, wtf!?
The lender and attorney say that the payoff for a tax lien on the mortgage hasn’t been approved and the IRS needs to send approval within two days otherwise the close will be postponed. Great. It’s not like we live right down the street and can just waltz on over and close the deal any day of the week. This has been planned for over a month. Our parents are flying out with us to celebrate and clean and repair the house. Plane tickets purchased, cars rented, the whole shebang. So, I ask, what’s the back-up plan? How will this work out if the IRS doesn’t come through? Pause. No answer. "Ummm, haven’t thought about that." I ask them to come up with a plan and call me back.
So I call the broker to see if he had similar news. NOPE. He hadn’t even heard about the tax lien issue. He was calling because one of the sellers doesn’t want to sign the papers at close! What!? “Is that even an option”, I ask? Turns out she doesn’t have to sign the papers if she doesn’t want to. The agent is obviously just as pissed as me because he won’t get paid if this thing doesn’t close. I call my buddy in Nashville that happens to be an attorney. He explains that I could get a court-ordered enforcement of the sales and purchase agreement. I start to do my own research and discover this is called “specific performance”. When I get home I read the contract in fine detail and find that the last clause in our contract clearly states that “specific performance” could be enforced if the seller fails to close and no other “remedy” would suffice. “Other remedies” would basically include a cash (or other asset) settlement for damages. However, and this is an important however, land is considered a unique asset for which a cash remedy may not suffice. The court considers land to be so unique that a person could argue that a cash settlement wouldn’t cover it and could then force the close of the property under the original contract terms.
While none of this is great news I’m very glad that we had “specific performance” written into the contract and would have a high likelihood of forcing the close on this land if it were to come down to that. I break the news to Sweetbreads when I get home (NOT FUN) and then prepare myself for a long few months of legal hassles. I wonder how to break it to our parents, but decide to delay for another day in case everything gets resolved. This is not how I envisioned my week ending.
So, Wednesday morning I wake up and head to work. I shoot off a couple emails asking for updates, but no response. I'm tied up in more meetings all day, so I decide to wait 'til afternoon to get back on the horn. Around Noon I start getting updates. First comes the attorney. "We spent all morning on the phone with the IRS and finally received payoff approval." Woo hoo!
I head to my office and check the missed calls. All 615 area codes. Interesting. That’s Nashville and the surrounding area, so certainly this has something to do with closing. I hope this is routine and not trouble.
Many farmers along the way have grinned back at us with huge smiles and said, “Boy, I sure can’t wait to hear your stories!” They then proceed to regale us with tales of botched deals, broken vehicles, lost money, and other mistakes that I hope we’ll never commit. Secretly in my head I always think, “wow, that’s a bummer for them, but I’m sure we’ll sail more smoothly.”
So I pick up the phone and call my voicemail. Broker. Lender. Attorney. Closing on Friday might not happen after all, they say. That’s only three days away, wtf!?
The lender and attorney say that the payoff for a tax lien on the mortgage hasn’t been approved and the IRS needs to send approval within two days otherwise the close will be postponed. Great. It’s not like we live right down the street and can just waltz on over and close the deal any day of the week. This has been planned for over a month. Our parents are flying out with us to celebrate and clean and repair the house. Plane tickets purchased, cars rented, the whole shebang. So, I ask, what’s the back-up plan? How will this work out if the IRS doesn’t come through? Pause. No answer. "Ummm, haven’t thought about that." I ask them to come up with a plan and call me back.
So I call the broker to see if he had similar news. NOPE. He hadn’t even heard about the tax lien issue. He was calling because one of the sellers doesn’t want to sign the papers at close! What!? “Is that even an option”, I ask? Turns out she doesn’t have to sign the papers if she doesn’t want to. The agent is obviously just as pissed as me because he won’t get paid if this thing doesn’t close. I call my buddy in Nashville that happens to be an attorney. He explains that I could get a court-ordered enforcement of the sales and purchase agreement. I start to do my own research and discover this is called “specific performance”. When I get home I read the contract in fine detail and find that the last clause in our contract clearly states that “specific performance” could be enforced if the seller fails to close and no other “remedy” would suffice. “Other remedies” would basically include a cash (or other asset) settlement for damages. However, and this is an important however, land is considered a unique asset for which a cash remedy may not suffice. The court considers land to be so unique that a person could argue that a cash settlement wouldn’t cover it and could then force the close of the property under the original contract terms.
While none of this is great news I’m very glad that we had “specific performance” written into the contract and would have a high likelihood of forcing the close on this land if it were to come down to that. I break the news to Sweetbreads when I get home (NOT FUN) and then prepare myself for a long few months of legal hassles. I wonder how to break it to our parents, but decide to delay for another day in case everything gets resolved. This is not how I envisioned my week ending.
So, Wednesday morning I wake up and head to work. I shoot off a couple emails asking for updates, but no response. I'm tied up in more meetings all day, so I decide to wait 'til afternoon to get back on the horn. Around Noon I start getting updates. First comes the attorney. "We spent all morning on the phone with the IRS and finally received payoff approval." Woo hoo!
Next call, just a few minutes later. It's the broker. "The uncooperative seller worked out her grievances with the other seller and will sign the docs." Woo hoo #2! And I’m sitting back in my chair thinking, “Holy shit, we totally just avoided disaster on that one!” AND I didn't have to tell either of our families! I hate stressing other people out, very pleased to avoid that conversation. And just like that we were back in gear. Fingers crossed that it stays that way.
As this posts we’re on the plane to Nashville and should be closing this afternoon. Barring any other madness I hope to have good news next week and an update on some repairs and other things we did. ‘Til then I’ll file this one away in our storybook.
As this posts we’re on the plane to Nashville and should be closing this afternoon. Barring any other madness I hope to have good news next week and an update on some repairs and other things we did. ‘Til then I’ll file this one away in our storybook.
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