By Bob Walsmith Jr.
Santa Barbara Association of Realtors
Ever notice that when you’re unprepared, it heats up stressful situations? Take the pre-closing stage of the home buying process. You may keep thinking about the money at stake, while forms, disclosures, and reports fly at you. It’s enough to overwhelm anyone. Anyone who isn’t well prepared, that is.
Here’s a list of the most typical closing-on-a-house problems the title pros see and how you can steer clear of them.
#1 Sprinting Through Documents and Emails
Attention spans are short in the digital age, and you’re probably not in the habit of reading thousands of words at a single sitting. That’s understandable, but you must read every word in documents and emails your lender, agent, appraiser, and title officer put in front of you. And you must read them carefully.
#2 Paying Too Little Attention to the Paperwork
Buyers who don’t read all the paperwork can be left high and dry – literally. That said, it’s OK to wait until the closing to read some of the docs, even if it means making everybody wait while you delve into the minutiae of the escrow statement, sales agreement, or deed of trust. Buying a home is a huge and important decision. Take your time!
#3 Leaving People Out of the Loop About Major Life Changes
This deal involves several people: you, the seller, your agent, the seller’s agent, the lender, and the title rep. Keep relevant participants in the know about every bit of information, or you could delay your closing. If you have a job change right before closing, let the lender know. If you and the seller do a handshake deal on a credit for a last-minute repair, notify your agent and the lender.
The paperwork has to reflect any deals. If the lender knows about the deal, they’ll capture it in the paperwork.
#4 Using Inconsistent Versions of Your Name in Your Documentation
Have you recently gotten married or divorced but not updated your driver’s license with the name change? If so, you could run into trouble at closing.
On closing day, a notary will look at your license to be sure the name matches the name on your paperwork. If the names don’t match, you can’t sign the title. You’ll either have to get a new ID with a name that matches the one on the paperwork or redo the paperwork to match the name on the ID. To avoid this snafu, make sure your state-issued ID has your current name on it. At the beginning of the deal, tell your lender, agent, and title officer your full legal name – your first, middle, and last name as it appears on your ID.
#5 Being in the Dark About the Home Closing Process
A lot of buyers, especially first-timers, don’t understand their role in a home closing. Some buyers:
· Bring their own checkbook to a closing, thinking they could pay with a personal check
· Didn’t know the location of the closing or who should come with them
· Were surprised to learn they would be reading and signing a stack of important documents
#6 Forgetting to Line up Your Wire Transfer or Cashier’s Check or Not Allowing Enough Time
You can’t use a personal check to cover the amount you owe at closing, including the down payment. You’ll need to pay the balance with a wire transfer or a cashier’s check.
You can get a cashier’s check at a bank where you hold an account, assuming you have enough money in your account to cover the transaction and all recent deposits have cleared. Keep in mind that some banks require advance notice.
Most banks send wire transfers electronically, but delays can happen. The money might need to be sent to a corresponding bank, or you may miss your bank’s cutoff time.
With either a wire transfer or a cashier’s check, ask questions about payment requirements and be sure to allow enough time.
#7 Asking Too Few Questions at Closing
If you see an acronym you don’t recognize, ask. Is there a word you don’t understand? Ask. Do you wonder if the well has been checked? Ask. No question is too big or too small. Call the title company and ask questions a few days before closing. You can ask questions at the closing, too. Remember, your agent and the title officer are there to help.
Most, if not all, of these issues can be avoided if you work with a trusted local Realtor® and a team of professionals that your Realtor® can recommend. Ask questions throughout this whole process so that you understand everything and allow the process to run smoothly.
Bob Walsmith Jr. is a native to Southern California and a Realtor® with Berkshire Hathaway HomeServices California Properties in Santa Barbara. During his work with the Santa Barbara Association of Realtors, Bob has served on the CORE Committee, Education Committee, been Chair of the Budget & Finance Committee, and the Multiple Listing Service Committee. He also is on the Board of Directors of the Alpha Resource Center of Santa Barbara. Bob lives in Goleta with his beautiful wife Julie. When not working, Bob enjoys playing golf, fine wine, fine dining, and walking our beautiful coastline. Bob can be reached at 805.720.5362 and/or firstname.lastname@example.org