A frightening number of real estate transactions fail during Step 8 – the last 10 days before the scheduled closing.
Not to be alarmist, but THIS is the period of time when we all must be MOST diligent and attentive to details.
Sure! We got a lot done in the first 10 days (Step 8) and we did it like clockwork.
We crossed every “T” and dotted every “I” and have enjoyed a relatively quiet few weeks in anticipation of the closing.
What could go wrong at THIS point?
- The loan underwriter might be taking a first look at the Buyer’s mortgage and starting to ask questions and requiring additional documentation. Depending on the underwriter, each question may lead to other questions . . . and it’s very possible that the additional documentation could take days (or weeks) to provide.
- Lender “Verifications” of employment and income/credit may turn up “issues” to be reconciled.
- Hey Buyer . . . Don’t you DARE buy ANYTHING more expensive than a bread box during this period of time – A new car loan or credit charge for new furniture or appliances could very well squirrel your loan.
- The Title Company will be scrutinizing the title (maybe for the first time) and may discover Previously unknown liens and encumbrances – Some of those may not even associated with that property but they’ve still gotta be cleaned up.
- Buyer could lose a job.
- A tree could fall on the house . . . or the required repairs could open a Pandora’s box of the need for additional repairs.
- Myriad other things could happen to cause delays (or worse).
I don’t offer this scary list with the intent to alarm you . . . Only to emphasize the importance of being VERY attentive to this process for every one of these 10 days.
My practice as the REALTOR conducting this orchestra is to call EVERYONE every day for these 10 days to check in and see if I can smell any loose details. I want to catch issues EARLY.
My goal is to be COMPLETELY ready and “Clear to Close” 4 days prior to the closing – Doesn’t always happen, but it’s great when it does.
So to some degree, step 8 of this House Buying process is all about preemptive damage control.
Here’s a list of MUST dos:
- Coordinate the Final Paperwork – Review all of the financial and contractual obligations of all parties and verify that we are all in compliance
- Ensure the Title Company is “dialed in” and connected to the Lender, The Seller’s Title Company . . . and has the RIGHT contract so as to build an accurate Settlement Statement
- The Lender – Call EVERY DAY to confirm the loan is prepared and ready as early as possible.
- Property Preparation – I recommend Buyer do a Walk-through of the house a week prior to closing and then again on the day of closing. Why 2? The week before walk-through is to check any required repairs to be sure they are done . . . and to verify that the Seller does, in fact, appear to be packing up to move (It’s very unsettling if the Seller forgets they have to move out of the house before closing) – The walk through on the morning of the closing is to see that the Seller really DID move out . . . and that they left all things they were required to leave (Refrigerator, Stove?)
- Coordinate your move – Be kind to yourself and figure out a way to spread your move out over at least a 2 day period. I always recommend Buyers and Sellers to plan on staying in a hotel on the night of closing and for Buyers to plan on moving INTO the house the day AFTER closing. There’s nothing crazier than 2 moving trucks in the front yard on the day of closing with 1 moving crew moving things IN while the other moving crew is moving things out (Yes – that happens)
- Attend to the details of securing keys/access to the property after closing
- Coordinate Utilities and insurance – Go ahead and schedule utilities to transfer the day BEFORE closing . . . There’s not much worse than moving into a house that has no electricity, water, and heating/cooling.
Meanwhile, the REALTORS, Lender, Title Companies are coordinating the details of the Closing itself.
The “Golden Egg” during Step 8 is the “HUD1” otherwise known as the Settlement Statement. This is the document that lays out how the money flows in the transaction and is a “Moment of truth” for all parties. The Seller wants to see the bottom line number to verify that they’re are going to walk away from the closing the amount of money they expect . . . and the Buyer wants to see the “Cash to Closing” number to be it’s in line with expectations.
We want that HUD1 as early as we can get it just in case there are surprises. I can say that in my 21+ years of selling houses, I’ve found errors (big and small) on easily 1/2 of all first draft HUD1s . . . It’s essential to catch those errors early so everyone isn’t scrambling on the day of closing to clean up messes.
This truly IS a SPRINT to the finish line . . . Step 9 is the Closing.
Pareto Realty’s commitment as your Exclusive Buyer Agent is to serve you all the way to the end.
Our goal is to complete the pre-close process at least 24 hours prior to the scheduled closing . . . so you’ll have no worries and can smile and relax all the way through the closing.
When it comes to setting the stage for a SMOOOOTH closing, WE ROCK!
Call us NOW to get this process started!