You have spent weeks dotting every “I” and crossing every “T”. You have handled every curveball your lender has thrown at you and dealt with issues you would have never expected. You struggled getting on the same page as the seller but now you are finally ready to close. Just when you think your work is over an 11th hour item comes out of nowhere that jeopardizes the closing. Instead of throwing your hands up in disgust you need to buckle down and finish the deal. Issues right before or even at closing are more common than you may think. With the regulatory laws that are now in place lenders need to scrutinize every loan item and closing document now more than ever. Dealing with issues at the closing is much more the norm rather than the exception. When they come your way you need to be ready. Here are five tips to help deal with some common closing issues.
- Read The HUD. It is no longer an excuse to be caught off guard with an unexpected figure at the closing. A few years ago there were significant changes in the mortgage closing process to protect the borrower. In the past the borrower would only receive the HUD 1 settlement statement at the closing. Today, they are required to receive an advanced copy at least three days prior to. This gives you plenty of time to review the closing statement line by line to see if any figures that may be off. If there are issues with a credit or closing cost you have time to tweak it before the closing. Any significant changes may add a few days to your closing but at least you will not be caught off guard at the closing table. Even though you are required by law to receive a copy it is up to you to stay on top of your lender and attorney to make sure you receive with plenty of time to review.
- Schedule The Walk Through Early. Unless you are planning a complete demo of the property you are going to schedule a walkthrough prior to the closing. In your walkthrough you will look to see that any changes on the contract were made and the property is broom swept as you expected. If there are issues with these items you and your real estate agent need to get them sorted out as quickly as possible. By scheduling the walkthrough on your way to the closing you make it difficult, if not impossible, to get the changes you desire. Not removing an appliance or a piece of furniture may not be a deal breaker but taking a fixture you expected in the property is. If you have a morning closing planned you should schedule the walk through early enough the day before to give you time to act if necessary. No buyer ever expects issues with the walk through but if they present themselves you want to allow enough time to react.
- Know The Title. Perhaps the most popular closing issue is with the title of the property. Many real estate attorneys have gotten burned paying for title search requests on deals that never end up closing. Because of this they end up waiting until the deal is approved prior to taking action. If there are any liens or other mortgages that need to be removed there is not much time to act. These issues have to be cleared up prior to closing and will be more of a hindrance in the process than at the actual closing. What can be a closing issue is with how you plan on holding the title. Without asking you may think that you can close in an LLC or in a different name than what is on the loan application. When you find out that you cannot this may be cause for concern. You can certainly change title or even quitclaim ownership after the closing but not during it. During the process you need to talk to your attorney and lender about how you want to hold title and if it is possible. Doing this at the closing table is often too late.
- Get Closing Funds Ready. As we mentioned you should know all of the facts and figures for the closing at least a few days in advance. This gives you more than enough time to get your closing funds ready. Anyone that has closed before knows that you need a bank check for the closing. If you try to come to the closing with a personal check you will be sent to your bank for a new one. Depending on what time your closing is scheduled this can be a real issue. Always get your bank checks ready at least a day in advance. Confirm with your attorney at least a few times on the amount and leave nothing to chance.
- Communicate With Your Team. In the days leading up to your closing you should be in contact with your lender, attorney and real estate agent. Most issues on the day of the closing are caused by oversight. If you and your team are on the same page and working together you can nip plenty of these problems in the bud. Even if you feel that you are annoying you have every right to ask for a quick email, phone call or text response. The closing may be one of many for them but means much more to you. Get on the same page with your team days in advance of the closing.
The closing should go smoothly if you have everything in place. You may have to be more involved than in the past but it is worth it.
