5 Key DOs/DON’Ts to help get YOUR closing(s) closed on time!
Remember – Folks’ possessions are on moving vans, that may not be able to be rescheduled
…Childcare has been arranged
…Folks have taken off work
…Folks don’t have extra days-off
…Buyers can lose their interest rate
…Sellers or Buyers may need to leave town
…Folks don’t have a place to sleep
…Rent may be coming due if closing is delayed one more day
Don’t be the reason all these arrangements get messed up, which makes tempers flare and can cause you more expense. Read below!
1. Real Estate Professionals – The Contract
- Include personal property-TVs, shelving, media room equipment
- Check any of the separate, itemized inspection boxes on contract page-3, Inspections Section 7(d)(3).
- Include all appliances and window treatments
- Check the first box ONLY in Inspections Section 7(d)(3) “Complete Property”
- All the inspections desired, just check the first box on the contract.
2. Real Estate Professionals & Buyers – Repairs
- Expect a home that needs repairs to close on time. Slight (days/weeks) delays are possible.
- Appraisal may list all problems
- These issues require professional assessment of the problem, or that they be repaired before can close: Cracks in basement walls/floor; Non-functioning HVAC; Peeling paint
- Expect added time to get estimates, negotiations, repairs, re-inspections, buyer-approval of all.
- Coach your buyers on the time requirements.
- Get moving asap on estimates so…buyers can be able to make a judgment call to negotiate, or cancel.
- When you represent sellers, have them do a home inspection before you list the property – do all repairs and eliminate surprises and crazy drama.
- Docs for the lender
3. Buyers -Documents for Lender
- Let your buyers believe that once they give docs to their lender that they are done. This is only the first step:
- Then the UW digs into them, to validate, verify…and they will request addtl., supporting docs
- Open/Close any credit at all before/during loan process
- Guess on any info on the loan application. Verify all.
- Get all student loan docs – accurately list payments!
- Get final/recorded divorce decree & property settlement agreement
- Get all child-support docs
- Get correct employment history, ID all gaps, ALL jobs no matter how long, complete.
- Get accurate names, addresses, phones so the lender can get a speedy verification of employment
4. Buyers – Sourcing of Funds
- Make large deposits w/n 60 days UNLESS there is a FULL legitimate paper trail-no sale of guns; no get loan paid back from sister, no sell TV/car to mom; keep funds in home safe/mattress
- Provide bank statements w/o ALL pages, even if page 5 of 5 is blank.
- Transfer $ between accts within 60 days of loan app
- Delay getting funds from 401k, investment accts, or from a home-equity loan as these can take 3-14 days’ time.
- Make large deposits a minimum of 60 days before you make your loan application
- Start cashing in assets (if needed) far in advance of closing to put funds into your bank – get copies of the paper trail: Statements before take funds out of fund “A”, the check/wire, deposit receipts into account “B”, statement on account “B” that shows it in the account.
- When get a gift from family, tell the loan officer early, use the lender’s official gift-letter form only.
Give the lender EXACTLY what they ask for – The loan officer asks you only for what he/she is instructed to ask you for.
- Bank statement means just that, all pages, even if any are blank. If the pages at bottom say 1 of 7, then ALL 7 pages are required – NO screen shots.
- If asked for tax return, that means the entire return with all schedules, regardless of how thick it may be, not just pages 1 and 2, etc.
- If asked for a paystub, that does NOT mean some partial printout from a HR website.
At closing, you may ONLY write a check(s) from the accounts that are mentioned on the loan application
5. Real Estate Professional-Documents for Title
- Assume there is a Marriage, Death, Divorce or HOA police – The title co. needs you to tell us if anything has occurred recently.
- Assume title has copy of the final purchase contract.
- Fail to cover this list of items when you first engage a client to prepare them
- Schedule closing before lender is able to close it.
- Reply asap to title requests that are emailed to you.
- Recent marriages/divorces; Deaths; Estate, Will & power to sell; Trust; LLC, members, Absentee parties, POA, remote closing
- Purchase price, commissions, death certificate, payoff auth.; last 6 of social security numbers, email and cell
- Coach buyers/sellers to return our calls asap – to help us clear title, etc.
So, what does this all mean?
1. Buyers MUST know they will be asked early, often, redundantly, last-minute and certainly inconveniently for documents and info.
2. Real Estate Professionals, Buyers and Sellers MUST know that SPEED AND ACCURACY of responses to information requests by lender and title is critical.
- Go home during lunch(if possible) to get docs;
- Stay up late if have to to find the docs;
- Deliver docs in hours not days;
- Info. requests are a SUPER HIGH PRIORITY
“ACCURACY” means do not take short-cuts
- Bank statement means that. Not a print out of a transaction history online
- Tax return means that – the entire return. Not the first 2 pages.
- A W-2 is not a pay-stub which shows annual earnings, it means a W-2
When things go wrong, folks look for someone to blame and to pay for the inconvenience. Following these DOs and DON’Ts should help prevent you from being the one responsible if a closing happens to be delayed.