Failure to Prepare For and Foresee Problems     at Closing Time

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There is much yet to be done once the closing date is actually set.

Usually the buyer needs to get their insurance binder, pay one full year’s premium in advance, get a receipt for the payment, and have copies faxed to their attorney before a closing can be set.

The buyer needs to call the utility companies to transfer service into their name. This includes phone and cable, as well as gas, electric, refuse collection, water, propane or fuel oil deliveries.

Next comes the final walk-through inspection. This takes place shortly before closing and is a final opportunity for the buyer to see the home that they are buying.

The Purpose of the Final Walk-Through Inspection:

• to make sure that the home is still in the condition that it was when you entered into the contract to buy it;
• to check for water leaks; damage from movers; yard damage from storms; or other adverse changes;
• to make sure any personal property such as appliances or window treatments, that are included in the sale, are in fact still there;
• to check that any available instruction booklets for appliances and mechanical systems are there;
• to make sure that remote garage door openers are there;
• to check that a set of keys will be at closing for you; and
• to make sure the utility meters get read and the meter reads called in.

Review of the preliminary closing statement.

The buyer’s attorney compares closing costs and adjustments with the seller’s and lender’s attorneys. Your attorney will then prepare a preliminary closing statement.

The amount should be close to the preliminary closing estimate (GFE-Good Faith Estimate) that the lender gave you. Someone needs to review the preliminary closing statement and compare it to the lender’s estimate to determine the accuracy of the numbers.

Provide your attorney with a copy of your GFE and have him or her compare the numbers. If there are major discrepancies, call your lender.

Preparation for the closing.

Know what items need to be brought to closing. You will need to bring: a cashier’s check payable as per your attorney’s instructions for the total amount you are told to bring; your driver’s licenses so the lender can verify that you are you; the original insurance binder and paid receipt may or may not be needed, but bring it anyway; and perhaps your mortgage commitment and lender good faith estimate in case you need to refer to them.

The closing attorney has the final packet from the lender. The seller or his/her agent or attorney brings the new deed, proof of CO/Smoke detectors from the fire department, proof of paid taxes and water bill (if municipal water), proof of paid condo fee (if a condo), and keys to the home.

Finally along comes the actual closing.

If someone has diligently been monitoring the process, has you prepared for the closing, and has reviewed the preliminary closing statement, the actual closing should be a breeze.

However, that is a big if. Many times the above preparation isn’t done in advance of closing. Things often get left to be settled at closing. And closings often times become battle grounds and take two hours.

It really does help to have a professional, knowledgeable agent working only for you at the closing to make sure that all goes well. With preparation, the right agent, and right attorney, closings truly are enjoyable and can take less than an hour.

Real estate closings in many areas take place at the lender’s attorney’s offices. Sellers can sign papers in advance, some do. Others come to the closing. The buyer has to come in order to sign the mortgage documents. They typically will be accompanied by their attorney and their real estate agent.

Professional buyer’s agents do attend closings, monitor the process leading up to the closing, and in general do what has to be done to ensure a smooth transaction. Seek out such agents and your home buying adventure will be an enjoyable one.

MABA, the Massachusetts Association of Buyer Agents, and its professional “conflict-free” members are here to help you (www.massbuyeragents.com). For a list of MABA members in your area to interview and help with your next home purchase - Click here. Thank you for your interest and the opportunity to be of service.