Real estate closings can be marred with complications and setbacks, if not properly planned and executed carefully. Unresolved title issues, such as an unknown lien from a former building contractor, or a serious structural problem revealed in an inspection report can cause weeks or even months of delay.
A common issue that often delays a closing is repair disputes. If you are selling a property, it is a good idea to have a general inspection of your home before putting it on the market. You may find problems that you were otherwise unaware of; you can then either correct them, or consider selling the property in “as is” condition.
Another important tip: Ask a real estate agent, local title company or closing agent to perform a “preliminary title report” for your review, particularly if you suspect there is or might be a possibility of a prior lien, estate or divorce issue that could affect your title to the property.
The buyer will receive a “title commitment” from the title agent as part of the initial title work after the purchase contract is signed, and prior to closing. Most contracts stipulate how many days in advance that the buyer will have the commitment. The title commitment will list prior liens, deed restrictions, easements, or other encumbrances (if any) to the property. Typically, the Seller will have an opportunity to clear the encumbrances. If the Seller cannot provide clear title to the property, the buyer may exercise the option to terminate the contract.
By being involved in the process and reviewing these documents early on, you will have the opportunity to clear up any existing issues, avoiding a possible delay due to title defects.
Here are some additional steps that can help shorten the loan process and ensure the deal closes on time:
Get pre-approved. Getting pre-approved for a loan will help you determine how much you can afford and give you a realistic expectation of the price range for your new home. Buyers who have been pre-approved are generally able to finalize their loan application faster and more efficiently.
Stay organized. Assemble your bank statements, pay stubs, tax returns and other documents as soon as possible, even before you begin looking for a home to buy. Getting these documents together can take time and the better you prepare, the faster your loan will be approved — and processed. If you are unsure of which documents you need, ask your local bank for a “mortgage loan checklist.”
Work with an experienced mortgage lender. Whether you use a mortgage broker, or work directly with a lender, ask what the average time is for processing a loan application and, specifically, how quickly they will be able to complete your mortgage. Try to anticipate potential setbacks, like any credit or employment-related issues.
Make sure that you have the money for closing costs. The lender will require proof that you have sufficient funds for the down payment and closing costs prior to closing. Make sure those funds are readily available. Generally, checks are no longer accepted at the closing table. More often, wire transfer of funds must be confirmed received by the title escrow agent’s trust account – prior to closing – usually the day before – or morning of closing.
Create a timeline for any repairs the seller is obligated to make. Make sure any repairs the seller has agreed to make are completed on time. This should be at least several days before your scheduled closing. Do the final walk-through inspection the day before closing, or sooner, if the seller agrees to it.
Follow up with your lender. Lenders are known for asking for information at the last minute. A day or two before closing, contact your lender and ask if everything will be ready for the closing date. On the day of closing, verify with your closing agent that the loan documents have been received.
Attorneys’ Closing Services (ACS) assists everyone from the sole practitioner to fully staffed offices. We offer full service processing for commercial and residential attorney title agents. While ACS is in the background preparing all of your closing documents, you can handle more closings and develop new business. Whether your office needs assistance with full or partial closing processing services, ACS stands ready to assist you at a moment’s notice. We would be honored to work with you on any and all of your real estate closings. To learn more, visit http://attyclosingservices.com/about-us/.
Source: The Washington Post