Last-Minute Mistakes to Avoid

This article does not intend to go over some of the deal-breaking mistakes made by parties in a real estate transaction.  Rather, this article serves to inform realtors of the most common last-minute mistakes made that delay closing.  Some might say that delaying closing is no big deal, we can always reschedule.  Others might view a delay as a complete and total failure.  Wherever you stand in this argument, we feel that we should do all we can to ensure our clients have the best experience possible.  Here are a few ways to ensure your client’s closing experience meets expectations and does not disappoint. 

The first last-minute mistake I want to address is probably the most devastating and can sometimes lead to major delays and even releases.  This mistake, which we see more than we’d like to admit, is the last-minute inspection (termite, well, or septic).  Too often do we see the termite, well, or septic inspection treated as a checklist item, something that can be knocked out a day or two before closing.   These inspections are essential pieces of the transaction and can cost thousands in repair costs.  Deals can fall apart due to a rough termite, well, or septic report.  And to make matters more complicated, the attorney or title company may not agree, or be permitted by the lender, to escrow the funds needed to close.  Even if they do agree to escrow, the funds held may be way more than your client anticipates, or in the case of a purchase file, the funds may not be sufficient to cure the defect.  Why put the additional last-minute stress on yourself, your client, and all the parties involved.  Take care of the inspections earlier in the life of the transaction.

The next topic is adding a new party to the transaction the day before closing.  If there is someone who needs to be on the deed that didn’t sign the contract, let us know in advance if you can.  The primary reason for this is that the title company must run a search on the new party to ensure there are no judgments or liens against that individual or company.  A last-minute lien certainly can complicate closing, and some loan types have requirements that require more than the buyer anticipates.  Last minute additions also can also lead to revised loan docs.  No party in the transaction enjoys sitting in the closing room while the settlement agent waits on the lenders updated documents with the correct party names. 

Ultimately, the settlement agent’s goal is to ensure not only a safe and successful closing, but to create a positive, memorable experience.  We recommend the real estate agent to prepare the buyer for their closing.  A half day off from work with a closing scheduled in the afternoon is ideal.  Often, the closing is scheduled for the morning, the buyer shows up, and the loan documents are not ready.  There’s nothing to sign and the borrowers have to come back later in the day.   It also gives the attorneys time to figure out any last-minute issues discovered in the walkthrough, or resolve any issues with the seller side.  The sellers do not always approve their closing disclosure a day or two before closing, and there may be some last-minute changes whether that be fees, invoices, or prorations. 

Finally, discussing the purchasers financial institution is crucial.  The buyer should always speak with their bank ahead of time to figure our how they’re going to move their money.  A cashier’s check may not be an option, wiring may not be instantaneous, there could be wire limitations, and there could be long processing delays.  As settlement agent, we cannot close until we receive all the money.  We see closings get delayed due to difficulties initiating wires.  Having a conversation about wires/checks a few days before closing can assist in that client having the positive, memorable experience we all strive to provide.