Payoff Requests – Broker Training Video
Dave Knudson, Gravity Capital. The deal of the day, it’s not actually a deal of the day, but we are gonna call it a deal of the day, because we like deal of the day. It’s called “Payoff Request”.
This is a very, very important part of the business, because if you screw this up, you could be sorry.
This deal that we’re talking about just came out today, there’s a guy who’s name I can’t say, he’s got a property in Mineola, Texas. So, he borrowed some money from us, he got a piece of property in Texas. He turned out to be kind of a mess because we gave him some money, he was rebuilding a structure, he was supposed to provide us with invoices return some stuff to show that he was working on the property. It just didn’t meet our approval, so we slowed down and held off giving some money until we feel a little more comfortable. But, he came and he wanted a payoff request and the most important thing when you do a payoff request are two things:
One. Make sure you have the right amount, you have to calculate your interest points, late fees, penalties, whatever there is. And two, give it to the title company, usually. It could be able to the borrower, though. Send to the title company. Number three, put a date when it expires. Always have an expiration date on it.
So, when we did our payoff request we sent it to the title company, we gave an amount, and we gave them the payoff date, when it was good to. We sent them to the title company, the title companies are usually smart enough that they will not issue a payoff after the expiration date. So the title company got the payoff. Out of the blue, ten days after the expiration of the payoff, the payoff document. The title company sends us a check, but the balance had gone up after the fact. So because it had gone up, because we put an expiration date on the payoff request, the title company was now on the hook for any overage that there was, in this case it was $5,000. So we immediately let the title company know, told them that they were short on their loan, and they absolutely worked it out quickly.
So is important to you, when you send your payoff to the title company, put expiration dates, put the right correct amount, and then usually you’ll just get a check in the mail.
And after the fact, by the way, that’s when you have to do the release. So make sure when you do these loans that you file the release quickly after the loan is paid off. If you forget about it, it could foal somebody up. And then you gotta go back and do the release after the fact and it takes quite a while. So, just remember payoff requests. By the way on all these documents, we’re happy to show you our payoff requests, or our payoff loans, or any of our documentation. We’re happy to give you, to show you, and help you. So that’s part of the deal here. Thanks, Dave Knudson, Gravity Capital.
Find more of Dave’s videos here.