The real estate closing is the final step in the sale of a home—the point at which title is finally transferred from seller to buyer. While the closing should be an exciting event for both parties, unwanted surprises could turn this pivotal process into a nightmare that causes undue stress at the last minute, or even delays the sale.
Whether you are buying or selling a home, here are a few common closing day surprises—and how to avoid them:
Problems with securing a loan
If you are the buyer, changes to your financial situation during the time between when you were approved for a mortgage and closing on your new home may impact your credit score and cause the lender to reconsider the amount that they offer you. This may result in a devastating situation that could significantly delay closing or cause the deal to deteriorate completely. While some circumstances are out of your control, there are certain changes you can avoid in order to prevent problems with your loan at the time of closing. For example, lenders may be wary if you change jobs, apply for other new loans, fail to pay bills on time, or—surprisingly—receive a large infusion of cash. If, despite your best efforts, one of these situations occurs, contact the lender prior to closing and see if you can resolve any concerns they may have.
While some circumstances are out of your control, there are certain changes you can avoid in order to prevent problems with your loan at the time of closing. For example, lenders may be wary if you change jobs, apply for other new loans, fail to pay bills on time, or—surprisingly—receive a large infusion of cash. If, despite your best efforts, one of these situations occurs, contact the lender prior to closing and see if you can resolve any concerns they may have.
Last-minute moving woes
Regardless of how long you have lived in your home, moving out can be an overwhelming process that may cause pre-closing chaos and delays if not planned properly. For example, some sellers stay in their homes until the morning of closing, which leaves them very little time to pack personal items, do a final clean-up, and make sure that everything is working properly so that buyers don’t encounter any issues on the final walk-through.
To prevent this frenzy, consider moving out completely a couple days before closing and having the home professionally cleaned. Remember to thoroughly check places like the refrigerator, dishwasher, closets, and drawers for items you may have left behind.
Discovering that the seller is taking certain items
Many buyers wrongly assume that certain items—such as fixtures and appliances— stay with the property. In other situations, buyers express an interest in purchasing some of the seller’s furniture, but in the absence of a firm agreement, they may discover at closing that the seller is taking these items. This could lead to the buyer feeling disappointed or that they are overpaying for the property. To avoid this situation, ensure that the purchase contract includes detailed descriptions of what is staying on the property and what the sellers are taking with them. The contract should clearly represent both parties’ expectations.
Errors on the closing documents
During the excitement and time crunch of closing, buyers and sellers alike may not notice mistakes on the closing documents. While this is a particularly common pitfall for buyers, who tend to have more paperwork to review than sellers, errors on the documents of either party could potentially derail the sale. Avoid this by requesting the closing documents in advance and taking the time to thoroughly review them. Consult your realtor if you have questions or notice anything suspicious.
Want more information? Contact me, Victoria Ranck for a free consultation.