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How to avoid closing-day glitches

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3. The house is still occupied
"Another pretty common example of a closing-day glitch is that the property simply isn't vacant," says Weinberger. It could be that the property was previously a rental, and the tenant is taking too long to move out. The seller might not even be responsible for forcing the tenant out after closing.

"Depending upon the law in the state, it may be the seller's legal obligation to deliver only the right to possession (of the property) on the closing date, as opposed to actual physical possession," says Weinberger. "What a shock that could be to the buyer, who would then be responsible for getting the tenant out of the house!"

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If you're considering buying a property that currently has a tenant, Weinberger's advice is to ask to see the lease. If there's a substantial security deposit that the tenant would forfeit by not moving out when the lease ends -- which would presumably be before the closing date -- the seller is less likely to have a holdover-tenant problem.

"You can also provide in the contract of sale that it's the seller's obligation to deliver actual, physical possession of the property on the closing date, not just the legal right to possess," says Weinberger.

It may be the seller, not a tenant, who's still occupying the house at closing, particularly if the seller's new home isn't ready. If the buyers don't need to move in right away, both parties could negotiate an agreement under which they close on the property and the seller rents from the new owners for a short while.

7 closing-day glitches

4. Unfinished repair work
Sometimes a house could be undergoing repairs that are specified in the contract but are incomplete on closing day. "It's not unusual that sellers underestimate the length of the time it takes to complete a repair," says Gottlieb. "There may need to be a discussion about delaying the closing date to enable the seller to finish any outstanding work."

If the seller waits until the last minute to address the issue, however, the new homeowner could be in a bind.

"Buyers may have their stuff already on the moving truck waiting outside of the house to move in," says Weinberger. "If the buyer's financing commitment expires on closing day, the buyer doesn't really have a whole lot of options at that point other than to close."

In that situation, the seller could put the money for the repairs into an escrow account to be paid after the work is complete.

"The escrow funds could be held by one of the brokers, the title company that's conducting the closing or anybody other than the seller," says Gottlieb. The seller may also choose to offer the buyer a credit in the amount of the repair.

5. New liens on the property
When an offer on a house is accepted, a title search usually occurs within the first couple of weeks to make sure a mechanic's lien isn't on the property -- that is, a claim for unpaid work that was done on the property. Just because the initial title search comes up clean does not mean a lien couldn't be placed on the property right before closing.

Next: "A routine examination can also cause last-minute problems."
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Understanding the closing process
Understanding escrow accounts
Timeline for buying a house
How to lower your property taxes
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