If finding the right house was a challenge, get ready, because the actual closing tends to put people on pins and needles. There are so many moving parts to closing an escrow — the buyer, the seller, the lender, the escrow officer, and the title company all have to do their part. If one goes astray, it can jam up the works completely. It’s another reason to work with people who know what they’re doing. Here are nine ways you might be delaying your closing, and what you can do to keep things on track.
You’re Dragging Your Feet on the Statement of Information
Both the seller and borrower need to complete a statement of information for the title company — and the sooner, the better. This gives the lender all the pertinent info about who you are, so they don’t mistakenly search recorded documents on someone with a very similar name.
There are Mistakes or Oversights on the Purchase Contract
Accuracy. Accuracy. Accuracy. And in the event of a contract change or modification, make sure to submit them to the lender and escrow officer as soon as they’re available. Without explicit instructions approved by the lender, you’re setting yourself up for a delay.
You Forgot to Print Proof of Homeowner’s Insurance
You’ll need proof that you bought homeowner’s insurance in order to close your transaction, so make sure you have that evidence handy. Contact your insurance company ahead of time, then follow up with your escrow officer to make sure they have what they need.
You Didn’t Get the HOA Certification
If you’re buying a condo, you’ll need a condominium certification, which speaks to the financial health and status of the homeowner’s association. It can take a little while to get your hands on that certificate, so contact the HOA well ahead of your closing date.
You Didn’t Consider Vesting Instructions
Real property can be owned by one person or jointly by two or more people. The vesting of title, or how you take ownership of the property, determines who signs documents relating to the property, as well as those people’s rights down the road. If you haven’t thought this through before closing and you need some advice, a real estate attorney can lay out your options in black and white.
You Ran Up Some Debt on a Whim
This is not the time for a new car. It’s not even time to apply for a new credit card. Many lenders do a second run of your credit before your transaction, and that new ride will dramatically ding your FICO score. What’s more, it could directly impact your ability to get a loan. Just sit tight until escrow has closed.
Your Lender has the Wrong Contact Information for Your Boss
In addition to re-running your credit, lenders may also verify employment just before funding. Make sure your loan officer has the right contact information for your superior or HR department to make this part easy.
You Didn’t Check the Closing Disclosures
Three business days before you’re contractually obligated to your new loan, you should receive the closing disclosures. It’s imperative to open and review these documents immediately so that you can compare the loan terms and fees to your original loan estimate. If anything is questionable, bring it up with your lender as soon as possible, because changes have to be made right away. This is a scenario to be avoided, which is simple if you’re working with an agent who knows what she’s doing.
You Forgot the Cashier’s Check
That closing disclosure will also list how much money you need to bring to the closing. Of course, this must be in the form of a cashier’s check (from a local bank) or a wire transfer, so get that part sorted out ahead of time. Personal checks won’t work.
The best way to stack the odds of things going smoothly during your homebuying experience is to partner with the right people. You want an agent who understands all the potential pitfalls, so they can guide you skillfully around them. If you’re buying or selling in the San Francisco Bay Area, where I started my career, or in Reno, Nevada, where I’m currently living, ping me. I may know someone who can help.