Avoid a Delay in Closing
Note: The following tips are for informational purposes only. Please refer to disclaimer at the bottom of the page.
Tip #1
Allow your agent, lender, attorney, inspectors – all the third parties involved, TIME to adequately prepare for your closing. Oftentimes the expectations of buyers and/or sellers are not adequately set as to how long it takes to compile all the information necessary for a closing and, therefore, what is presented at the closing may not be what the buyer and/or seller bargained for in the form of fees, terms of the loan agreement or status of repairs or inspection results.
Buying and selling a home is a process within which there are many steps. One step may be dependent upon another and one step of the process, once complete, may require additional steps to be put into place.
For example: One step along the process may be to order a home inspection. As to repairs or additional inspections, the homeowner cannot determine how to move forward without those initial results. In my office, one of the first steps is toexamine the title. The results of the title examination will determine if there is a title issue that needs to be addressed or an older mortgage that was not properly cleared of record.
The bottom line is that time needs to be factored into the scheduling of the closing if possible to allow for additional steps along the way. There are exceptions however that do call for closings to be handled more quickly due to an outside factor – employee relocation, a contingency in another contract – and this is where the experience of each professional is relied upon to properly meet deadlines or prepare for an alternative solution that will allow for the parties to reach their goals.
Tip #2
If you decide to order a survey – do so early and make sure it gets to the attorney's office in advance of the closing date so that the attorney can review the survey. There are often discrepancies in the current legal description versus the new plat or survey. Oftentimes a survey may as well disclose encroachments from the neighbor's property onto the property being purchased or projections onto the neighbor's property. Additional time is needed to resolve those issues.
Tip #3
Keep in touch with your lender. As your loan file continues through the process, additional or last minute requirements are often required. The sooner you know, the sooner you can fulfill that requirement.
Tip #4
If repairs are completed – you may consider re-inspecting a few days before closing in the case there is need for more work to be completed. Consider not waiting until the final walk-through the day of closing to verify completion of repairs as there is not time allotted for additional repairs if one was not completed or not completed correctly.
Tip #5
Be prepared to get your bottom line figure the day before closing and more than likely no earlier. My office would like for nothing other than to have a file complete five days before closing but remember the process from Tip #1. The attorney's office cannot provide you with your bottom line figure until the title examination is complete, the lender has completed its paperwork, emailed or delivered the final package to the attorney's office, the package is properly prepared by the attorney's office, and the final documentation has been approved by the lender and agents.
You may consider using your good faith as a guide to what is needed and plan to go by the bank prior to closing or better yet, schedule a wire transfer with your bank or on-line transfer from your account.
Tip #6
Verify with your lender a few days before closing that you have the interest rate, term and principal and interest payment correct. Oftentimes, many scenarios are discussed and the final result may not be exactly as you had anticipated. Keep in mind as well that your principal and interest payment will not beyour actual payment if your taxes and insurance are being escrowed.
Tip #7
The closing table is not the place to negotiate. Last minute changes may require additional documentation from your lender and delay closing. For example, the inspection results show that there is an additional repair that needs to be completed and the buyer and seller decide on closing day that the seller will give the buyer $500 for the repair. The closing will be stopped if a lender is involved.
The money will need to be escrowed via lender approval or the purchase price lowered by the $500. Last minute changes after the lender has finalized its numbers can cause additional underwriting review, an escrow agreement provided by the lender or possibly a new lender package.
Tip #8
Choose an insurance company and request that a firm quote from the insurance company be emailed or faxed to the attorney's office as soon as possible. The insurance company may require review of your appraisal. The attorney's office assists the lender with escrow charges for completion of your loan package using this figure. Last minute changes may cause closing delays.
Tip #9
Unless it is on the settlement statement, there are to be no money/possessions passing between the parties. This can stop a closing.
Tip #10
If a buyer or seller cannot come to closing and will be relying on a power of attorney - do not tell your attorney this the day of closing. As to the buyer, the power of attorney will most likely be required to be specific for the transaction and be approved in advance by the lender. Our office can work quickly to accommodate a party not being in town the day of closing. We just need to know this prior to the "hour" of closing.