Ready to Close? Not So Fast!
Categories: Chattanooga Real Estate News, First Time Buyers, For Home Buyers
By Kacey Sides, Buyer Specialist - Andy Hodes & The Scenic City Team
After jumping through all of the hoops you finally see the finish line. You’re counting down to closing, and moving into your new home. The movers are lined up, your things are packed, and your family and friends are ready to help you move in. Then you get the call, we have to move the closing date…
Going through a buyer’s consultation can prepare you for these unexpected glitches, because it covers everything you could possibly encounter. Not going through a comprehensive consultation can make this a huge surprise. Having a backup plan if the closing date has to be moved should be one of your top priorities when scheduling your move.
Each home purchase can be a little different, but whether it’s your decision or the Seller’s to move the closing date, you need to be ready!
New Construction- Builders hire subcontractors from various trades to complete the work on your new home. Unfortunately their schedules frequently are not the same as your and your builders schedule. This can easily lead to your home not having all the finishing touches complete and ready for you to move in. You could still close, and have the builder, or their sub, complete the unfinished items after closing, but it’s definitely harder to get it done once the seller has been paid. You risk the chance that it won’t get done. We urge all of our buyers to let the builder complete the home and the punch list of repairs before closing. If that’s not possible then proceeds should be withheld from closing in an escrow account until all the unfinished items are completed.
Resale - Sellers can have the same issues with hiring people to do the work if repairs need to be done. Also, if the Seller is buying another home, there might be roadblocks in their next transaction resulting in a delayed closing and move. If that happens then they are likely going to want to shift your closing to avoid a double move and storage costs.
Short Sale / Foreclosure - When dealing with a bank or national lender, you are working on THEIR timetable - yours doesn’t really matter to them! Even though it’s common to be penalized if you push the closing date back, the banks have free reign to delay things themselves, without penalty. With all the challenges currently facing the lending industry, they don’t have enough people to handle all of the new paperwork so delays should be expected when you are buying a short sale or foreclosure. Title issues can also easily surface requiring a drastic change your closing date!
Knowing these possibilities up front doesn’t always make it easier for you when everything comes to a grinding halt, but we believe it’s always a good idea to have a back up plan that avoids a double move. When the decision to close is in your court because repair items are not completed, it pays to wait. Hold proceeds from the closing in escrow until everything is good is usually effective, but are you prepared to deal with these repairs if they are never completed?
Flexibility in your move can make the smart decision to wait very easy. If you are leasing or selling your home, communicate with your apartment manager, or your Realtor and Buyers, so you can keep your options open and plan ahead. You’ll be glad you did!
Another great post, guys. And you’re right one: every closing is different, subject to the winds of change, and best to talk about these things right up front with clients so they’re not blindsided by the turbulence.
We’re about a week away from closing on one home sale that’s seen more change than you can imagine. This transaction is wedged between a couple of others and we’re working like the dickens to accomodate parties on both ends.
Then, of course, there are transactions that just go perfectly from start to finish - I spoke about one such closing on my blog this past Friday. Keep up the great work.
Ken
great post. it is amazing what banks get away with in this market. late closings, late responses, phony prices at times. nevertheless, we play by their rules for now and this is a great reminder that we should prepare in advance to not get too anxious on the settlement date.
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