After months of hunting and preparation, you're finally ready to close on a house. The last thing you want is to have a problem pop up and delay the closing. Watch out for these common closing-day glitches, and learn how to avoid them.
When you're buying a home, one of the last steps of the
process is to conduct a final walk-through of the property. These walk-throughs
are usually scheduled the morning of or the day before closing -- after the seller's
furniture and artwork has been removed -- to verify that the new home is clean
and in move-in condition. However, sometimes buyers receive surprises when they
see what's behind the decor: faded floors, holes in walls or dirty rooms that
can make a buyer balk at going through with the closing.
|7 closing-day glitches|
"I had an experience where on a walk-through we discovered
that the flooring the owner advertised as ceramic tile really wasn't. It was a
ceramic-looking design that was actually laminate," says Joyce Rhodes, a
Realtor with Coldwell Banker Residential Brokerage in St. Charles, Ill. The buyer
complained and the closing was delayed until the seller offered the buyer a credit
to pay for installing real ceramic tile. "In general, a credit can go a long
way to fixing any problem. The buyer and seller just have to negotiate how much
money is needed for the repair," says Rhodes.
Not enough cash to seal the deal
"A buyer, particularly a first-time
buyer, could discover at the last minute that they don't have enough money to
costs," says Alan Weinberger, a professor of law at Saint Louis University
Law School in Missouri. "Even with a modest house those costs can run into
the thousands of dollars for title insurance, recording fees, etc."
try to put together the final settlement statement within 24 hours of closing,"
says Leah McCann, a loan officer with First Horizon Home Loans in Fort Myers,
Fla. Up to that point, the buyer has only an estimate of the fees they need to
pay at closing. "Because of prorations and title fees, the final amount may
be a few hundred dollars more than what's noted in the good-faith
estimate, but the buyer still has to provide those funds in order to close."
"At that point, all eyes are on the lender"
to see if they will lower their fees enough to let the buyer go
through with the closing, says Weinberger.
McCann concedes that sometimes lenders have to be
willing to do just that. "Nobody wants to lose a deal over
a couple hundred dollars."
Even if the funds are available, they may not be in
the right form.
"If a seller needs the funds from the purchase
of one house in order to buy another, they may be expecting a wire
transfer of the purchase price into their account. If the lender
provides only a check, then they have to wait for it to be deposited,"
says Alan Gottlieb, vice president and special counsel for First
American Title Insurance, in Philadelphia. "If they need that
money for a subsequent funding, then they should make amends for
a wire transfer."
if a wire transfer isn't necessary, funds need to be guaranteed. "We often
see people who don't bring certified or bank checks to a closing," says Gottlieb,
and that could cause a delay.