Top 5 Closing Day Problems for Home Buyers – Purchasing a home for the first time can be a daunting experience, and the closing day is perhaps the most daunting part of the buying process. Dealing with unexpected issues that may arise can be difficult. While some problems can be easily solved, others can derail a deal at the final hurdle.
Top 5 Closing Day Problems for Home Buyers: Disheartening walk-through surprises
The final walk-through of the property is the number one cause of unexpected issues on the closing day. The final walk-through usually takes place the day before, or during the morning of, closing day, leaving the buyer with not much time to prepare and react to potential problems.
A heavy storm may reveal a roof leak, or the furniture that you thought was included has vanished, cracks in the ceiling or walls may be revealed.
If the issue is a serious problem you should take careful steps in proceeding with the deal. To avoid any unfortunate revelations, you should have a very thorough inspection of the property before the final walk-through on the closing day.
Feel free to ask the current owner to view the property after a large storm to inspect for any damp or potential flooding. Discovering a last-minute problem does not necessarily mean the deal should be compromised. Negotiate to have the cost of repairs covered by the seller, and have the money put in escrow. Get estimates from professionals to verify how much the repairs will cost.
What the seller takes with them
A common issue on closing day is confusion between the buyer and seller over which items are taken by the seller and which items remain with the property. Perhaps you liked the antique furniture at the property and were disappointed to discover it had disappeared on the closing day.
Unless you’re extremely attached to an item and regard it as a deal-breaker, it is often best to let go of any issues over the transfer of items and furniture. The simplest solution to any misunderstanding on closing day is to state in the contract what is expected to remain or must be removed. Be detailed and make sure that the contract matches what you expect to be in the property on the closing day. Take pictures of fixtures or appliances (including model and serial numbers) of the items you want to have conveyed with the sale of the home.
Most buyers begin the mortgage approval process over a month before the closing day. However, slight changes to your financial situation can alter your credit rating and problems can occur right up to the point of closing on the deal. If you change your job, apply for a credit card or loan, fail to make payments on bills, even an unexpected influx of cash can cause issues with mortgage approval.
If the lender backs out of the deal, you will have to find another mortgage provider before you can close. The mortgage provider may adjust the interest rate and you will have to reconsider whether the property is still affordable.
To avoid any lending issues, you should communicate with the mortgage provider the day before closing to ensure there are no issues, and resolve any if there are. It’s advisable to avoid any large financial moves in the month or so before closing, like changes to your employment or any financial influx from a relative or family member. A big no-no is buying furniture, curtains, or anything else on credit right before closing your escrow. That additional revolving credit balance could upset your home purchase plans. Here’s the important message: communicate with your lender from day one to the final day of your mortgage process. Refrain from making any purchases on credit without running it by your lender first.
Money transfer problems
The crucial part of the closing day is the transfer of funds. Some banks and financial institutions prefer to conduct transfers electronically, while others prefer certified checks. If you bring the wrong paperwork or make a mistake with account numbers, you can delay the deal.
While not to serious, it is best to avoid creating any unnecessary stress. Ask your mortgage provider and real estate agent what type of transfer is required.
One more major issue we gotta mention here! Wire fraud is very real. When you receive your wire instructions from the title/escrow company make sure you have the bank call your title company prior to completing the wire to verify the title company bank account number. Thieves these days will intercept the emailed wire instructions, substitute in their account number, and then complete the email to you. You head into the bank, wire funds and they are gone for good! This stuff is real and serious. Take the extra minute to verify.
A preliminary title report from the title company will reveal details of the property, such as any liens, covenants, and past ownership, that can reveal serious title issues. Give yourself time to consider any issues or stipulations that come with the property. Any tax owed on the property or claims of ownership from family members or co-owners can delay closing. It can be frustrating, but all title problems must be resolved before closing. However, when it comes to purchasing a property it is better to proceed with caution than making any costly errors that must be dealt with later when the lawyers get involved.
Closing day problems can happen but if you do your homework, have a good Realtor and Lender by your side, and read the fine print you will probably buy the home of your dreams with no problems at all. Here at LasVegasRealEstate.com, we like to recommend to our readers our Preferred Partners. Our Preferred Partner: Residential Lender and Residential Realtor are experts at what they do and our readers rave about them. Give them a call if you want to buy your home using the best experts in Las Vegas.
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