Buying a home? Prepare yourself for these 4 last-minute closing surprises
The process of a property’s transaction involves so many obligations that you can completely forget to be prepared for issues that may come up on the closing day.
Your ignorance can’t be an excuse because these issues can be a deal breaker at a time when you have already invested a lot of money and energy to ensure that the deal comes through.
Here are a few tips to help you cope with last-minute surprises:
Final walk-through
You have already conducted a home inspection and are pretty sure it has revealed all the problems with the property. You have negotiated with the seller on who will cover the expense to fix these issues, so you think you are all set. You can’t wait to proceed to the closing, right?
Well, do you know when a final walk-through takes place?
The answer is – just before closing.
It is not uncommon to run into new problems with the property during the final walk-through. You may notice cracks in walls or flooding problem due to a sudden storm the night prior to the inspection.
Don’t panic if the final walk-through comes up with any defects. First evaluate how serious they are and then talk to the seller how much the repairs will cost and who will cover the expense. Talk to a home inspector to know how much a repair will cost and negotiate accordingly. Don’t forget to ask the seller to put the negotiated amount in escrow before closing.
What’s included in the sale and what’s not
Most people assume that whatever items they saw on the property when they visited it for the first time would get transferred to them with the sale. This assumption often leads to last-minute disputes as the seller may remove ceiling fans, furniture, kitchen appliances etc. before closing.
It is always better to clear any confusion over what’s included and what’s not in the purchase contract. As a rule of thumb, items permanently attached to the property are included in the sale.
Last-minute mortgage challenges
After applying for a mortgage, did you –
- change your job?
- take out a new loan to buy a car?
- fall behind on your credit card payments or utility payment bills?
These steps can have a devastating impact on your credit score overnight causing your lender to withdraw the loan or increase the interest rate at the last minute.
To avoid any surprise on the closing day, you should visit your lender ahead of time and discuss if there had been any last-minute changes in the terms and conditions of the mortgage. Avoid any step that can have a negative impact on your credit score.
Problems related to transfer of title and funds
Two things happen at the closing – (1) the property’s title is transferred to you, (2) funds are transferred to the seller. There are a lot of things that can go wrong in the process of title and funds transfer.
Make sure to check with your lender before closing what form of payment is required – cashier’s or certified checks or an electronic transfer. You should also confirm what paperwork you will need to complete.
Likewise your title company may come up with last-minutes issues with the title such as past ownership, liens, and covenants. It is rare, but it happens. In such cases, you should never proceed to closing before the title defect in question has been resolved.