Buying or selling a home requires an enormous amount of paperwork from a number of different entities. Because there are so many moving pieces in this process, one tiny mistake can lead to significant delays. The last thing you want as a buyer or a seller is to delay the closing, so you should be prepared to do everything in your power to make sure the sale is finalized on time.
The following are the most important things you can do to avoid a delayed closing:
Be honest when applying for your mortgage.
When you apply for your mortgage, the lender will ask for a variety of documents to prove your income, assets, and credit history. It can be tempting to misrepresent your financial situation to get better mortgage terms. You might want to conceal tax liens or other debts, but mortgage lenders are skilled at unearthing these financial details.
If your mortgage lender discovers an undisclosed element to your financial situation, they will recalculate your loan or deny it altogether. A mortgage approval problem is one of the most common reasons for a delayed closing, but you can avoid this issue by being upfront from the beginning about your finances.
Don’t make major changes to your financial situation.
Right before you close on your home, your mortgage lender will likely conduct a final check on your income, debts, and credit. A significant change in your finances could affect your loan approval, which will delay your closing.
Avoid taking out new debts or making any other dramatic changes to your finances while you prepare to close on your home. Sometimes, buyers want to take out a loan to purchase furniture or appliances for their new home, but this can create issues with your mortgage lender.
Similarly, it can be risky to change jobs while you’re in the process of buying a home. Lenders want to see consistent employment and income, and they may become suspicious if you leave a job right before closing on your new house. Even if your income stays the same or increases with a new job, you should try to delay employment changes until after your closing date.
Be prepared to negotiate on repairs.
Hopefully, your home inspector discovers minimal or no issues with the property. Unfortunately, though, the home inspection can sometimes reveal serious problems that are in need of immediate repair. If the offer includes a home inspection contingency, the closing may be delayed until the buyer and seller resolve the situation.
Whether you’re the buyer or the seller, you have the ability to negotiate with the other party on home repairs. To stay on track with the closing process, it helps to have a plan prepared in the event that the home inspection has problematic results. The fastest solution is for the seller to reduce the price of the home to offset the repair costs. The buyer may ask the seller to make the repairs before the sale, but this usually takes extra time.
Review the preliminary title report immediately.
If you’re the seller, you can speed up the closing process by reviewing your preliminary title report as soon as possible. A lien on the property or any other issue with the title must be resolved before you sell your home, and fixing these problems can be time-consuming. Sometimes, past financial issues that have already been resolved still appear as red flags on the title report, and you may have to track down old financial records or get in touch with past lenders to prove that you have a right to sell your home.
Submit your HOA application as soon as possible.
If you’re buying a home in a community with an HOA, you may have to receive their approval to purchase the home. In this case, you should submit your application as soon as possible. Different associations have different requirements for members, so you’ll have to connect directly with your new neighborhood’s HOA to learn about their application process. After you submit your application, don’t forget to check in with them periodically to make sure everything is going smoothly.
Check all your documents multiple times.
Small oversights or missing documentation may not seem like a big problem, but any issues with your paperwork could have serious consequences when you’re closing on a home. No matter how confident you are that your paperwork is complete and accurate, you can never check it too many times. Pore over your documents in the days leading up to your closing to look for errors, and keep everything organized in a safe location.
You should also ask professionals to review your paperwork and confirm that you have everything you need. Your real estate agent knows the ins and outs of the closing process, so they’re your best resource when you’re gathering your paperwork. You can also consult with your attorney, financial advisor, or other experts you trust.
Don’t close on a Friday.
Closing on a Friday can lead to longer delays if you encounter a paperwork issue during the meeting. Because most offices are closed on the weekends, you’ll have to wait two extra days to resolve the problem and finalize the sale. This can be incredibly frustrating when you’ve come so close to making the transaction official.
Instead, try to schedule your closing earlier in the week. This way, you can make the corrections immediately and reschedule the closing for the following day. While you’ll still face the stress of a delayed closing, you won’t have to wait an entire weekend.
A delayed closing is inconvenient for both the buyer and the seller, but you can reduce your risk of delays by being careful and timely in your preparation. Review all of your documents as soon as you have access to them, and have a backup plan in place in case anything goes wrong. By doing everything possible to stay on track, you’ll do your part to avoid a delayed closing.