My closing process just hit a major roadblock

[squirrel!33]

I just got off the phone with my agent at Fidelity and received not great news. Our VGF contract passed ROFR on April 15 and we finally got our closing documents on May 8 and wired the money on May 11th. Having not received any word about the seller's documents coming in, I contacted my agent and found out that the wife of the couple that is selling is currently stuck in Brazil. (they are Brazilian citizens living in the U.S., but she had traveled to Brazil and now cannot leave) Because the U.S. Embassy there is closed, there is no way to get a U.S. notary to certify the documents. Our Fidelity agent even investigated an online notary service but Mason Title said they won't accept that.

Our contract says they must close by June 26th so I guess we are stuck until then to see if the sellers will be able to get the documents in. Our agent then suggested that we sign an extension to the contract if they are unable to come up with a solution before then. She said that this amendment would not require another approval through ROFR. Otherwise, we will have to start all over again on June 27th after having wasted almost 3 months on this contract. I am so frustrated and not sure what to do at this point. Surely, there has to be a way to get a real estate transaction done with someone stuck in another country right now. Any suggestions from my wise DIS Board advisors?

 

[macman123]

Does it have to be a US notary? Im in the Uk.

Cant she use a local one? Papers can be sent by courier surely?

 

[chicagoshannon]

Would another closing company work?

 

[ChipNdale8887]

I just got off the phone with my agent at Fidelity and received not great news. Our VGF contract passed ROFR on April 15 and we finally got our closing documents on May 8 and wired the money on May 11th. Having not received any word about the seller's documents coming in, I contacted my agent and found out that the wife of the couple that is selling is currently stuck in Brazil. (they are Brazilian citizens living in the U.S., but she had traveled to Brazil and now cannot leave) Because the U.S. Embassy there is closed, there is no way to get a U.S. notary to certify the documents. Our Fidelity agent even investigated an online notary service but Mason Title said they won't accept that.

Our contract says they must close by June 26th so I guess we are stuck until then to see if the sellers will be able to get the documents in. Our agent then suggested that we sign an extension to the contract if they are unable to come up with a solution before then. She said that this amendment would not require another approval through ROFR. Otherwise, we will have to start all over again on June 27th after having wasted almost 3 months on this contract. I am so frustrated and not sure what to do at this point. Surely, there has to be a way to get a real estate transaction done with someone stuck in another country right now. Any suggestions from my wise DIS Board advisors?

Did they mention this was from an international seller at the beginning? I would think it should have been since they are Brazilian citizens right? I'd be a little nervous about signing an extension. Who knows how long they might still be there?

 

[squirrel!33]

No, they never mentioned that they were not U.S. citizens before we signed the contract. Honestly, I am not sure if that would have changed by mind but it might have given that the pandemic was already in full swing. The agent said she didn't know either and said since they were located in the U.S. it would not have been a big deal to close the deal other than they have to withhold some income taxes. The issue is now that the wife is not in the U.S. to sign. I guess it has to be a U.S. notary so even though Brazil has their own notary-type system, that is not accepted here. It really seems like there should be some exceptions made given the situation and how unprecedented it is. Is anyone else experiencing something like this? Do you know of a title company that would handle it differently than Mason Title?

 

[ChipNdale8887]

No, they never mentioned that they were not U.S. citizens before we signed the contract. Honestly, I am not sure if that would have changed by mind but it might have given that the pandemic was already in full swing. The agent said she didn't know either and said since they were located in the U.S. it would not have been a big deal to close the deal other than they have to withhold some income taxes. The issue is now that the wife is not in the U.S. to sign. I guess it has to be a U.S. notary so even though Brazil has their own notary-type system, that is not accepted here. It really seems like there should be some exceptions made given the situation and how unprecedented it is. Is anyone else experiencing something like this? Do you know of a title company that would handle it differently than Mason Title?

I've heard really good things about Mason Title and the reason they use a notary is to prove the seller actually signed the document so I'm not sure there is any other options.

 

[squirrel!33]

Yes, I heard good things about them as well which is why I requested them. Obviously, we want to make sure everything is on the up and up. It just really sucks. I would just caution everyone right now to be careful with international sellers and make sure there is a way for them to sign before spending a lot of wasted time on the process.

 

[ChipNdale8887]

Yes, I heard good things about them as well which is why I requested them. Obviously, we want to make sure everything is on the up and up. It just really sucks. I would just caution everyone right now to be careful with international sellers and make sure there is a way for them to sign before spending a lot of wasted time on the process.

This makes me concerned a little bit because only dvcresalemarket really puts it out there that its an international seller from what ive seen. Has anyone seen other resale websites list if its an international seller?

 

[squirrel!33]

I have seen International Seller marked on the dvcstore's listings before. Usually they tout this as an advantage because it is very rare that an international seller's contract is taken in ROFR. However in these strange times, it may end up being a disadvantage.

 

[Welsh_Dragon]

If you find a major US international law firm with offices in Brazil, chances are that they will have a US notary on their staff.

maybe someone like White & Case? Or Baker McKenzie?

 

[squirrel!33]

I will suggest that option - thank you!

 

[RoseGold]

I would wait until the closing. Absolutely no way I'm extending unless they refund the earnest money.

They lied to you. t's not like they didn't know they were stranded in Brazil when they took the offer. Let them figure out how to get a notary.

This is why I didn't wire until seller docs were in hand. Too many bad stories on the boards.

 

[starry_solo]

Wouldn't it (the notary requirements) be the same as if they were "true" international sellers (residing out of the country)? So they find a notary in Brazil (a Brazilian one, not a US one) and get it notarized that way?

 

[RoseGold]

Wouldn't it (the notary requirements) be the same as if they were "true" international sellers (residing out of the country)? So they find a notary in Brazil (a Brazilian one, not a US one) and get it notarized that way?

No.

 

[Cg disney fan]

That's terrible. sorry to hear about that. I am closing on my first contract any day now. Hope everything works out!!

 

[MICKIMINI]

That is not right. You should have been advised that it was an international seller. I don't think where they live has anything to do with their home country. I have had international seller transactions, and though they were both Canadian so there wasn't a time issue, it is required to provide your SS #'s. The IRS collects tax when a foreigner sells a contract. You receive a form from the IRS with your name on it and are on the hook if they don't pay the tax! Fidelity is not known for their attention to detail. I caught an error on a contract we were buying as I saw the bottom line has gone UP. Absolutely unacceptable. If it were me I'd demand my deposit back next day delivery for withholding that information (it is up to them to ASK) and move on. I'm so sorry - that just sucks.

 

[Sandisw]

That is not right. You should have been advised that it was an international seller. I don't think where they live has anything to do with their home country. I have had international seller transactions, and though they were both Canadian so there wasn't a time issue, it is required to provide your SS #'s. The IRS collects tax when a foreigner sells a contract. You receive a form from the IRS with your name on it and are on the hook if they don't pay the tax! Fidelity is not known for their attention to detail. I caught an error on a contract we were buying as I saw the bottom line has gone UP. Absolutely unacceptable. If it were me I'd demand my deposit back next day delivery for withholding that information (it is up to them to ASK) and move on. I'm so sorry - that just sucks.

I don’t think they are international sellers per se as it says they have been living in the US and the wife is now stuck in a Brazil after having visited,...I assume because there are travel bans,

I think That is maybe why they must use a US notary vs, one in that country because that is not where they currently reside,

To OP, I am sorry you have to go through this but that is still a month away and maybe between now and then, they can get back or thenUS embassy will open and you still close on time.

 

[squirrel!33]

My understanding is that we will get all of the money back if they do not provide the signed documents by the date stated in the contract. You are right, it was dishonest and wrong. Unfortunately, the contract really doesn't address this situation and we are still under contract with them so if I don't want to pay a penalty, I think I have no choice but to wait until the closing deadline of June 26th and then ask for the money back that is being held is escrow. Sound right?

 

[MICKIMINI]

My understanding is that we will get all of the money back if they do not provide the signed documents by the date stated in the contract. You are right, it was dishonest and wrong. Unfortunately, the contract really doesn't address this situation and we are still under contract with them so if I don't want to pay a penalty, I think I have no choice but to wait until the closing deadline of June 26th and then ask for the money back that is being held is escrow. Sound right?

Is there a clause in your contract that determines what happens if your sellers don't close on time?

 

[squirrel!33]

The clause goes as follows (this is standard wording in the Fidelity contract):

"Upon Seller default, the Buyer may terminate this contract and shall be entitled to the return of any escrow deposits made as Buyer's sole and exclusive remedy. Seller also agrees upon Seller default to pay all expenses including escrow fees, advertising fees, and title exam fees and also to pay Broker's full commission and/or transaction fees."

So we are basically made whole and while the Seller is going to need to pay a bunch, none of it will go to us. So no compensation for wasting our time and effort. But at least we don't lose money which I guess is something.