Buying a house is an emotional journey — from finding the perfect property to securing the ideal price. The last thing anyone wants to endure is a real estate closing that resembles a roller-coaster ride.
“The goal of a good settlement is where the buyers and sellers get to meet, sign papers, hand off keys and trade information about the neighborhood,” says Realtor Dianne Hansen of Fairfax, Virginia. “When done well, it’s a nice moment between buyer and seller.”
And who wouldn’t want that?
Realtors share their tips for a smooth closing:
Get preapproved for a loan
Working with a lender to secure financing ahead of time not only helps determine what you can afford, but it also helps unearth any speed bumps that might impact your chances of closing on a property.
“I’ve seen buyers go out looking, and the first day they fall in love with a home,” says Realtor Ed Huck of Ed Huck Team in Westlake, Ohio. “They need to make an offer, but they miss out because the home sells while they’re getting preapproved or they lose the home in a multiple-offer situation because the other buyer is already preapproved.”
Listen to your lender
Buying a house involves a mountain of paperwork, so be prepared. And just when you think you’re done submitting the last forms, the bank will undoubtedly want something more.
“Respond to lender requests promptly,” says Realtor Colleen Malone of Moxie Realty in Portland, Ore. “And by promptly, I mean within hours, not days. If the lender needs a pay stub or a tax statement – even if you think you’ve already given it to them – just get it to them again ASAP.”
Huck agrees, and says because of today’s tight lending guidelines, lenders are asking for more documentation than ever before. “Many of our transactions are not closing on time because underwriters, at the lender, are asking for updated documentation just days before the scheduled closing,” he says.
Ask questions and review documents
Don’t be afraid to ask questions of your Realtor, title company, attorney or lender, and be sure to read through the documentation detailing the sale.
As a buyer, you have a legal right to obtain the HUD-1 settlement statement (which outlines all of the costs for both the buyer and seller) at least 24 hours in advance of closing.
“Listen, ask questions, and ask again if you still have questions,” Hansen says. “Understand title insurance. It’s not required, but should you have a title issue, the lawyer fees can be impressive.”
Before closing, a title professional will examine the history of the home’s ownership to resolve any issues, but problems may still arise (for instance if the previous owner failed to pay taxes or if there’s an outstanding judgment on the property). Title insurance will pay for your court costs if anyone challenges your title, and it will pay for your equity if you lose.
Double-check the property
Sellers should be proactive on any agreed-upon repairs, but as a buyer, try to schedule a walk-through of the property a few days before closing. That way, there’s still time to address any issues that aren’t resolved. It also won’t hurt to drive by the house on your way to sign the closing papers – just to make sure there hasn’t been a flood or fire.
“Determine if you want to pay for a survey,” Hansen suggests. “I recommend one, especially on single-family homes. If there’s a fence on your property, this is the way to find out about (property line) issues ahead of time, because after settlement it becomes your problem.”
Stay calm
Realtors agree: Be flexible, be responsive, and above all, remain calm.
“Your lender will ask you for all sorts of last-minute details — verified, of course,” Hansen says. “Even the most qualified of buyers have to meet audit standards. Don’t take it personally; sometimes things come up last minute. Stay calm, and keep your eye on the ball.”
Staci Giordullo is a writer for Angie’s List, www.angieslist.com, a resource for consumer reviews.
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