A closing is supposed to be the time when Sellers receive their agreed upon money. They have already vacated their home and moved their furniture, changed electric and water accounts, and most likely purchased or signed a rental agreement on another property. Since the new owners will be moving in on the day of closing these actions have been accomplished a day or two before the closing day.
The new owners also known as Buyers, have also ended their commitment with their most recent abode. They have scheduled electric, water and moving arrangements or possibly painting and carpeting provisions have been contracted. They too have severed their previous living arrangements.
Thus we have all met at the closing table to sign a form known as a HUD 1 (closing statment)and the balance of the money in the form of a cashiers check has been offered by the Buyers to the closing agent or attorney. The keys will be passed.
However, in accordance with the FHA or VA mortgage, although the Buyers have been approved and are committed to the loan, they cannot receive the money for three more days. This is the right of recission.
This is to protect someone from something??
The Sellers are stuck, thats the word: stuck. They cannot move forward with their plans and truly have no where to live for three days.
The Buyers are stuck, they also have no where to live for three days.
Now, if you think it would be perfectly alright for the moving to take place. THINK AGAIN.
The insurance coverage is not in effect. Also supposing something happened to cause the Buyers to activate that right of recession? Possibly a death in the family or another personal problem erupts and they chose not to buy the home?
Where does that leave the Seller? How will the Buyers retreive their money? Who will pay for the expenses, title commitment, appraisal, survey, etc.?
Tell me, who is the 3 day right of rescission protecting?