We get it. It happens. Nobody sets a deal up expecting it to fail. What would be the point, then?
But. Every deal, if it closes or not, involves hard costs that have to be paid. Take title exams, for instance. The title exam fee is a hard cost that someone has to pony up for even if something ultimately doesn’t cross the finish line to closing. The examiner going to the courthouse to search the deed books? They don’t do that for free. It’s not their hobby and they’re not just doing it for fun. They get paid.
So then. It’s really good practice, and common courtesy as well, to pay for for those hard costs even if a deal completely falls to pieces. After all, you would never go to a restaurant, order a dinner, and then decide not to pay pay for it because you just weren’t hungry, right? You wouldn’t even think of it.
That said, there are ways to minimize the times that this happens. Some wholesalers hold off on ordering a title exam until they’ve already assigned their contract. Others may wait until they’ve taken care of their other due diligence. There are ways.
Stiffing the closing attorneys’ hard costs is not a great way to make friends and influence people. Just the opposite, really. Any investor whose deals regularly don’t close and then doesn’t pay the hard costs will soon find themselves without closing attorneys to work with. But if you do good work and handle your business professionally, then amazing things will follow.