What Can Go Wrong On Closing Day

Here are some common closing issues and ways to avoid them.

Problem: Errors In Documents

An error in documentation is one of the most common problems when closing a deal. An error in documents could be as simple or serious as a misspelled name, transposed address number, or an incorrect loan amount. It could be a delay of up to 24 hours or even days.

Prevention: View Everything:

Ask to see all paperwork in its entirety as soon as you can. Pay particular attention to loan documents. Your Loan Estimate and Closing Disclosure forms will be available three days before closing. Take the time to review them. You can fix a problem faster if you identify it early enough. This will help you keep your closing on track. Ask questions if you don't get it or if something is confusing. Double-check all information, including interest rates and spellings.

Problem: Last-Minute Mortgage Requests And Mortgage Delays

You probably think that your lender will notify you promptly if you have any problems meeting the closing date. This would be a mistake. Lenders can become overwhelmed in hot real estate refinance or buying markets. Your file may easily drop to the bottom of the pile if you don't receive regular calls from your agent and real estate agent. The loan officer will deal with urgent loans. It might be too late for you to obtain the missing document when your loan has reached the top of the priority queue. Lenders may ask for additional information at the last minute - copies of rental agreements, canceled deposit checks, original hazard payment, etc. This can cause you to be overwhelmed and could lead to delays in closing.

Prevention: Get In Touch With Everyone

Find out what documents your lender requires to complete your loan application and file. There are many ways for documents to be lost or forgotten, including bank statements, tax returns, and other documents. After identifying what documents they will need to complete your loan, contact them periodically by email or phone to ensure they have all the information. This may be something your real estate agent is doing as well. How often do you need to check? It depends on how much information is missing from your file. A weekly check-in will not be sufficient until your file is completed. Check-in more often if there are any problems or missing documents. Make sure that they know your expected closing date.

Check-in with your closing agent several days before closing to ensure they are in contact with your lender. Bring anything you think they may need, but nobody has yet mentioned it.

Problem: Cash Flow

The day before closing, you go to the bank and make arrangements to have your down payment transfer directly to the closing agent. All is well. Unless the bank or the money halts the transfer doesn't arrive in time, or the amount that arrives is lower than what you need, then it's good to go.

Prevention: Bring It

This issue can be avoided entirely by sending your down payment in cashiers or certified checks. You can't use personal checks, so don't even think about it. Instead, you can arrange a wire transfer or bank transfer to ensure funds reach the closing agent at least a few days before closing. You can transfer more money if you don't know the exact amount required at closing. Later, you'll receive a refund.

Problem: The Title Isn't Quite Clear

Perhaps the title company discovers that the seller has not paid the contractor for the backyard fence or has not paid property taxes in five years. There is also a lien on the property. Perhaps the family is suing each other over the property. It may seem interesting, but the bottom line is that the buyer has a problem. Therefore, before closing, you must insist on a clear, unclouded, and problem-free title. Your lender will also require it.

Prevention: Please Read The Title Report

The title company completed a preliminary report shortly after escrow was opened. This report is often sent directly to your lender. However, you can request a copy from either the title company or your bank. It is important to get it as soon as possible and to read it thoroughly. You will purchase title insurance at closing to cover yourself against any mistakes made by the title company in its search. However, that policy is only valid from the day you close.

Problem: There Is Something Wrong In Your Final WalkThrough

You are doing the final walk-through of almost your home on the day before closing. Unfortunately, the seller punched a hole through the wall and took down the fixtures that were supposed to be left.

Prevention: Get On Board

To solve problems, your agent should collaborate with the seller's agent. The first step is to determine what's acceptable and what it may cost. Next, work out how you can make the seller pay. For example, negotiating a credit for your closing fees would allow the seller to pay more at closing. Another option is to place the correct amount of the seller's proceeds in escrow until all problems are resolved.

Don't wait for the closing to raise any concerns. Instead, make sure you resolve them before closing. If you are unable to resolve them, the closing will be delayed while you sort it out. Sometimes, it may be more beneficial to accept responsibility and not delay closing.