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KELLEY’S MARKET TRENDS 35 FLOOR SPACE 35 Real Estate
It’s Closing Day
to avoid last-minute surprises.
Don’t be shy about asking for another
look-see after a big storm to vet for damp- ness or ooding. But a last-minute discov- ery of a problem is not necessarily a deal breaker. Just ask the seller to cover the cost of those repairs, and put the funds in escrow. Be sure to come with estimates from professionals on how much those x-its will cost.
What Stays, What Goes
Another common issue that crops up during the walk-through is misunder- standings about which items get trans- ferred with the sale. For instance, maybe you loved the seller’s antique stove, ceil- ing fan, or other household item and assumed it would stay, but you nd out the sellers took it with them.
How bad is it? Unless you’re really attached to the item, you may want to let this one slide if you want this deal to go through. The easiest way to avoid these misunderstandings is to delineate in a contract what remains in the house or must be moved out, says Ben Niernberg, executive vice president of business development at Proper Title, LLC.
“Be very detailed on what’s staying and going,” he says. “Washer, dryer, ceil- ing fans, xtures, appliances – be dil- igent during your initial inspection.” Also, make sure the contract re ects your expectations.
Credit Challenges
Even though you were probably approved for a mortgage a month or so earlier, even small changes in your nan- cial picture since then can a ect your credit score and create problems up to the moment you close on the property. Changing jobs, applying for a credit card, falling behind in paying bills, even sudden
IBY LISA KAPLAN GORDON
WAS THRILLED WHEN THE SELL- ers accepted my o er on a tear-down lot. And the deal went forward with-
out a hitch – that is, until closing day. Soon after I arrived at the title compa- ny’s o ce on the big day, my real estate agent sheepishly handed me a set of 40-year-old covenants that restricted what I could build on the site. Looking back, I know that I should have smiled politely at the six people gathered and suggested we reconvene later after I’d studied this giant wrench in my plans. But I didn’t want to inconvenience every-
one, so I closed the deal.
It was a mistake. Even though those cov-
enants didn’t derail my dream home’s con- struction, they caused me constant anxiety. This is not just a concern for those building a home from scratch: For many homebuyers, closing day is daunting, and coping with last-minute surprises can be tricky. Some problems are minor and easy to solve; others can wreck a deal. So
which are which? Let’s take a look.
Ugly Walk-Through Revelations
The dreaded walk-through is the top reason for surprises on closing day, and for good reason: This nal inspection of the home happens the day before your settlement – or even the morning of – so there’s little time to prepare for whatever problems might pop up.
Who knows? A sudden storm could have poured water into the basement, or now that the furniture is all gone, cracks in walls or other aws may be exposed.
How bad is it? If the problem is seri- ous, like ooding, you should de nitely proceed with caution. To avoid this snafu, make sure to inspect a home as thoroughly as possible before your nal walk-through
infusions of cash can red- ag your deal. How bad is it? Pretty bad. If a lender with- draws the o er, you won’t be able to close until you secure another mortgage, which could take weeks. Or, if the lender wants to increase your interest rate, as it usually does in these situations, then you’ll have to
decide if you can still a ord the purchase. To head this issue o at the pass, con- tact your lender the day before closing to discuss and solve any issues that may have turned up. Also, try to avoid making any sudden nancial moves in the weeks leading up to the close, like quitting your job or receiving a $10,000 “gift” from a family member to help out with home buying – that could, ironically, throw a
wrench into the process.
Money Transfer Misunderstandings
On closing day, the chief order of busi- ness is to transfer funds. Some nancial institutions and title companies pre- fer cashier’s or certi ed checks; others want funds to be transferred electron- ically. Show up with the wrong paper- work or account numbers, and you’ll be left scrambling.
How bad is it? This misunderstanding
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should be nothing more than a speed bump. To avoid it, ask your agent and lender before closing what form of pay- ment is required. Also bring your check- book to pay for small items that might crop up, like an unpaid electric bill.
Title Trouble
A title company, which con rms details about your property such as past ownership, liens, and the aforementioned covenants, could bring up issues on clos- ing day. If that happens to you, don’t be afraid to step back and insist on taking time to digest any details, problems, or stipulations attached to the property.
How bad is it? It depends on what the search turns up. Some problems, like tax liens or a claim on the property from a relative or co-owner, can postpone a closing. Other things, like the covenants I mentioned above, or unpaid HOA dues, may be surprises but not deal breakers. But any and all title defects must be xed before you can close on the property. It may be frustrating, but when you leap into homeownership, it’s always better to be safe than sorry.
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