Real estate sales involve a dozen or so people who can easily derail the process. Your objective, when you are buying a home, is to avoid being that weak link that may be delaying closing and adding additional stress.
I like to categorize one role of a buyer’s agent as a transaction manager helping you stay on track.
In 2012, the delayed closing has become routine since mortgage lenders scrutinize your file one last time before they give you 80% of the cash to purchase your new home. So here are a few items to put on your real estate checklist to help you avoid being the reason your closing was delayed.
Cash to Close
The money that you are going to use for your down payment needs to be available on the day of closing. Although this seems obvious, some clients ran into a jam when their bank placed a “hold” on their deposit citing bank policy for deposits of checks over $2,000.
If you have funds coming into your account, have them “wired” into the account and then they will be available immediately. And, if your mortgage lender sends up a red flag, the wire transfer provides a very clear record showing where the deposit came from. (Avoid wires from loan sharks and bookies, okay)
Mortgage Lender Checklists
You would assume that your lender has a rigid checklist for the loan processor to use, but that may not be the case when the processor has ump-teen loans to process.
This scenario surfaced only after I checked in with a client’s loan processor to make sure everything was on track. Her answer shook my confidence when, in an off-hand manner, she said that the closing may need to be delayed a couple of days.
To make a long story short, she assumed the borrower knew that he needed to get her updated bank statements and a bunch of other little odds and ends. Really?
You may have gotten the good-to-go from your lender a month ago, but you need to expect them to want updated information:
- like your most recent bank statements
- like your most recent pay stub
Oh, and remember that just before closing they will:
- contact your employer to make sure you are still employed there
- check your credit report for any “new” lines of credit
The take-away here is to contact your lender a week before closing to check in and make sure they aren’t waiting for you to get them a statement or two.
Home Owner’s Insurance Policy
Having an insurance policy in place on day #1 is a lender requirement. I always recommend that my real estate clients get this established early on in the process to compare rates, deductibles and more.
The big “more” is that your insurance company is able to check the ultra secret CLUE database for excessive claims by the current owner. Yes, if you ever file a claim then it goes into an insurance company database that could impact the cost of getting a policy on the home.
Check in, and be pro-active
Although your real estate agent should be helping you manage a checklist of tasks, understand that being proactive on these steps can help you avoid being the reason your real estate closing gets delayed.