Closing day is the most exciting day in the home-buying process. The long journey is finally over, and you will sign your papers and get your keys. Once you’ve been told that your home mortgage has a closing date, you may want to move in immediately. But while most home-sale transactions are smooth, some may hit speed bumps on the road to ownership bliss.
The most important part of the transaction is getting all the necessary parties and documents together on the right day at the right time. Sounds simple, right? Unfortunately, as many an experienced agent reports, the process can be like herding cats. Although your Realtor will be your guide, it’s a good idea for you to be aware of all the dates, steps and procedures as you approach the big day.
Many issues encountered at closing can actually be tackled earlier in the process. It’s important to keep on top of your mortgage-approval process, home inspection and repairs, and the title-discovery process, as these areas are where things often go wrong. For more information, check out our post on why pending sales can fall through. Below are three last-minute things that can delay a closing.
1. Be certain the home is ready for you to take occupancy. If you notice something on your final walk-through, bring it up immediately. It’s your responsibility to make sure that the home is being delivered in the agreed-upon condition. If something is wrong and the home is not cleaned out, or if agreed-upon repairs aren’t completed, it’s time to spring into action. Your agent can work with the seller’s agent to solve any problems. From there you can determine what is necessary and what it will cost. It may be possible to make some last-minute negotiations, either changing things so that the seller pays more of the closing costs or putting proceeds in escrow until repairs are completed.
2. Make sure the paperwork is in order. Review all documents ahead of time if you can. Misspellings, missing information and incorrect addresses or loan amounts can hold up a closing. If they can’t be easily corrected, your closing could be delayed by hours or even days. When you review your loan documents, make sure that the payment amounts and interest rates are as you expected them to be. If you are using a real estate attorney, you will want to have an appointment to review the real estate contract, settlement, truth-in-lending statement and mortgage. Your attorney should verify that the seller has made all repairs that were agreed upon and that the seller will bring the deed to the real estate closing.
3. Make sure your funds are ready. Closing costs will be due, and a personal check is not permitted. Be sure to either bring the down payment to the closing yourself as a certified check, or arrange for the fund transfer a bit in advance so that any potential transfer delays won’t hold up your closing. Closing costs can amount to a small fortune. All these costs were outlined to you during the mortgage-application process. Loan origination, mortgage loan, mortgage points and credit report fees are all closing costs to be paid at the closing. In addition, you may need to prepay interest for a partial month, depending on the date you closed and when the first payment is due to the lender. Title insurance is one of the more expensive fees and is required by all lenders to ensure that there are no liens against the deed. Finally, the last charge to pay to the lender is the fee for recording the deed, which may include a real estate transfer tax.
Susan Wellish contributed to this post on Realtor.com
