Follow these helpful tips
The closing process on a new property can be just as stressful as it is exciting. There are important steps to take where things can potentially not go as planned and the stakes are high as a home is usually one of your largest investments. Here are some possible snags that can arise so you can try to avoid them occurring in the first place.
Seller Side Potential Issues
Title – There could be an issue if the title company locates any outstanding liens on the property. The title needs to be free and clear of any problems or “clouds” so get a copy from your lender as soon as you can and review it thoroughly.
Final Walkthrough Issues – Properties should always be free of the seller’s belongings at the walkthrough and everything that was supposed to remain with the home should be accounted for. If either of these things are not as they should be or if there is damage to the home then this could delay the closing unless an alternate arrangement is made.
Buyer Side Potential Issues
Job – It is possible that you could lose your job right in the middle of the process. If you can secure a new job quickly enough then you might be able to get a cosigner to keep the deal from falling apart.
Credit – Even though your credit may have been excellent when you first got pre-approved, things could change later on at the time when you put a home under agreement. One of the reasons this could happen is if you accrue more debt like buying a new car or a lot of furniture so avoid any larger purchases during this time.
Down Payment – Be sure you have this ready as in you have the money available to easily transfer (and not in a place where it takes several days to retrieve it), and know the exact amount that is needed.
Closing Disclosure – You will receive this 3 days before the closing date so make sure you review it and scan it for anything that might be incorrect. Alert your agent immediately if there is.
Closing Costs – These are different from your down payment so make sure you have it ready and even add a little padding to the amount. Your lender will furnish you with a good faith estimate of what will be due.
Insurance – As soon as you have a home under contract then start collecting some homeowner insurance quotes for it. That goes for both homeowner’s insurance as well as flood insurance if it is needed.
Either Side Issues
Moving Coordination – It should be clear that a buyer would move in after closing and the seller would be out before but sometimes wires get crossed or there could even be a tenant situation and one of these parties is misguided or a moving mishap takes place. It might be a good idea to confirm schedules to avoid this so everyone is on the same page.
Death – You can avoid this potential snag with the contract stating that the obligations go to the heirs in the event of death of one of the parties.
Cold Feet – It can happen that one party decides to pull out from buying or selling the home. If a buyer does, most contracts are written where they will forfeit their deposit as a result. If a seller does this, they will need to return the buyer’s deposit. The buyer could sue the seller although it is unlikely that they would.
Natural Disasters – If a natural disaster occurs and the home is severely damaged then most agreements will give buyers an out. If it is only a small amount of damage, appraisers may want to view and confirm that this damage is repaired so that buyers can proceed with the purchase as normally would have happened.