Closing-day nightmares: Don't let them happen to you

Moving into a new home is exciting. The closing process, however, can be intimidating, especially for first-time buyers. If you’re unprepared, your closing may get delayed or, in the worst-case scenario, your deal may even fall through. Here are some common closing-day nightmares, and tips on how you can avoid them.

You bring insufficient funds to cover closing costs.
Before your closing, you will receive a settlement statement that outlines the final costs associated with your mortgage. It’s important to read this over carefully and compare these costs to those listed in the Good Faith Estimate you initially received from your lender. While usually the closing costs should not be significantly different from those initially quoted, sometimes there are valid reasons why they may be a little higher.

You need to pay these costs with guaranteed funds, so plan to get to the bank before the closing meeting and obtain a cashier’s check (or certified check). You should also bring your personal checkbook or cash to pay any other small charges that may arise such as adjustment fees to cover the cost of prepaid taxes or utility bills. Finally, make sure to bring your driver’s license or other photo ID, as the notary who witnesses the signing is required to ask for it.

Your final walk-through reveals an unexpected problem.
About 24 hours before closing, you will have an opportunity to walk through the home to ensure that everything is in order. Sometimes you’ll get an unexpected surprise. Maybe the sellers took an appliance or fixture that they were supposed to leave behind, or you suddenly discover the large painting they’ve removed from the dining room wall was hiding a gaping hole. You can head off some of these problems by ensuring that any items to be left behind are specified clearly in the purchase agreement. Hiring a home inspector before finalizing the offer may also allow you to spot hidden damage to the house. Unfortunately, there are some problems you can’t anticipate, such as the seller leaving piles of garbage in the basement. If this happens, however, you are usually entitled to demand that the seller clean it up, or compensate you for having to do it.

The seller isn’t finished moving out.
Hard as it may be to believe, some buyers arrive at their new home only to find that the previous owners have not yet moved out. This is particularly common when the current occupants are tenants. If you’re buying a home from a seller who is renting it out, request a copy of the lease and ensure that the tenant’s last day is before your move-in date. You might also add a clause in your purchase agreement that explicitly states the seller is responsible for any expenses you incur if the home is not vacated.

You or your partner gets cold feet.
Buying a home is a big step in life, and there is nothing wrong with taking your time before signing the purchase agreement. But the day before closing is not the time to get cold feet about becoming a homeowner -- or for your partner to decide the home advertised in Sunday’s paper looks nicer than the one you bought. Some buyers having second thoughts may act in bad faith -- for example, after the walk-through, they may exaggerate a minor problem to try to scuttle the deal. But be aware that there have been such cases where sellers have successfully sued for breach of contract.

Making sure you’re well prepared ahead of time, both financially and mentally -- by carefully thinking through all of the important steps -- will help ensure you avoid any potential problems and have a smooth closing.


Get Home Mortgage Loan offers customized for you today.