Homeselling is a difficult process, and most homesellers are waiting for a closing day with a bated breath. However, even you think everything is over, some closing day surprises can occur.
Despite homesellers anticipating closing date, hoping that everything will be over and the money will be on their account soon, some issues can happen even on that final day. Sometimes, the entire sale seems to be going smoothly, but then, just before the closing, everything goes wrong. Closing day surprises can happen no matter if you’re buying or selling. We’ll go over some of the most common ones, and explain how you can avoid them.
1. Final Walk-Through Reveals New Problems
The last walk-through happens right before documents are signed. However, this is when most closing day surprises happen. Even if the official inspection didn’t find anything wrong, many things can happen just the day before. Maybe there was a huge storm, and the roof got damaged, or a pipe broke and water flooded your basement or bathroom.
If the problem is serious, this can make the sale fall through. The buyer can request you fix everything before they proceed with the payment. This can further delay the sale. While there is little you can do other than to fix the damages, if you ensure your house is in excellent condition before you list it, you’ll lower the chance of these unexpected and unpleasant closing day surprises happening. Another think you can do if you don’t want to delay the sale is to offer to cover the repair expenses and place the funds in escrow.
During the first home visit, whether it was online or in person, the buyer might’ve noticed the new dishwasher you have in your kitchen. Maybe they even mentioned something, or you did, that was taken out of context and they understood that, with the house, they’ll get the dishwasher, as well. During the final walk-through, they discover that the item is no longer there and now they are devastated, and they are even considering cancelling the sale.
To avoid this from happening, create a contract that clearly states what stays in the house and what doesn’t. Ensure you clearly mention to every potential buyer what they’ll be getting with the purchase, as well, so they don’t get disappointed once they see the paperwork. If you’ve forgot to state what goes and what stays, and if you notice the buyer really likes this one small thing you’ve taken with you, consider additionally including it in the sale. However, if you really need that dishwasher the buyer likes, maybe it’s better risking letting this buyer go.
3. Financial Issues
Even a small change in someone’s finances can affect their credit score. No matter if buyer applied for mortgage months prior to the closing date, if their credit score is damaged, the bank might deny their loan. In other words, the buyer won’t be able to provide funds and complete the purchase. This is a huge issue, and it is one of the worst closing day surprises for both sides. The buyer can apply for a new mortgage, however this might take weeks, and even then they might not apply after all. Sadly, there is nothing you can do about this, as this is entirely up to the buyer and the lender to solve.
4. Title Issues
A title company can provide you with a few closing day surprises that you weren’t hoping for. There might be some issues with the property that you didn’t check on time and that you didn’t even know of. These issues include liens, aforementioned covenants, or past ownerships. To avoid this, you should check all documents about home ownership and make sure all your bills are paid. Ensure everything was okay with the title when you’ve bought it, and that there aren’t any co-owners that might not even know they have the rights on the part of the property. This can take a lot of time, but without correcting everything, a sale can’t be completed.
5. Money Transfer Disagreements
One of the final things that happen on the closing day is money transfer. Believe it or not, there can be some misunderstandings with this, as well. For example, perhaps the buyer wanted to pay with certified checks, while the financial institution that deals with the transaction accepts only electronic fund transfer. Luckily, while this unexpected surprise can be nerve wrecking, it can be fixed in just a day or two. However, if you don’t want to lose even that small amount of time, make sure to talk with all parties what kind of payment they prefer, and try to negotiate if you see any disagreements. We know, being a mailman in such conversations is the last thing you want, but it is necessary if you want the transaction to go smoothly.
Can You Avoid These Issues Altogether?
While avoiding these closing day surprises is almost impossible when you list with an agent, there is a way to ensure the closing of the sale goes smoothly, and that is to sell to a reliable direct buyer, such as Sparks Property Investors LLC. When you work with a direct buyer, they will take care of all the payments and issues that can happen on the closing day. Direct buyers buy houses as-is, so they usually don’t even request an inspection. Not to mention, they’ll pay in cash, so there’s no need to worry about banks or buyer not applying for loans. Also, direct buyers can close the sale much faster than traditional ones, so you might even be able to close the sale in up to 7 days! This is a great way to avoid all that stress that comes with a less-than-perfect closing day.