Dry Closing

In the oil business, a dry well is one where no oil comes out. There's a lot of pumping, but no crude. The company sets up all the equipment, drills a big hole in the ground, gets the derrick going up and down, and then...pfft. Nothing.

A dry closing has a similar vibe. You sign a deal. Closing rolls around. Everything's ready to go and then, pfft. No money.

Let's back up a bit. A dry closing usually relates to real estate. In general, a closing involves the consummation of the deal. Most real estate deals are complicated enough that a span of time exists between the signing of the contract and the point where the deal actually takes effect.

You sign a contract to buy a house. It's set to close in 30 days. It gives everyone a chance to get everything read. Then closing comes around. You give the money to the seller. They give you the deed to the house. Deal's done.

That situation constitutes a wet closing (snicker all you want; that's what they call it). One party gets the title to the property and the other gets the cash meant to pay for it. The money changes hands. In a dry closing, everything else happens but the money part.

You want to buy a summer house in the Falkland Islands. You arrange to borrow money from your brother to make the initial down payment. The closing date comes. However, your brother has skipped town just ahead of an Interpol warrant for wire fraud. You don't have the cash in hand.

But you assure the sellers that you can just get the money from your parents in a few days. They believe you, so they let the closing go ahead without the cash in hand. A dry closing. Next week, when your parents give you the money, you'll forward the payment to the sellers.