6 Indicators Your Home Closing Will Go Haywire: Buyers' Edition

No one wants to start off in a new home frustrated, but unfortunately that is exactly what ends up happening when some homebuyers overlook a few important tenets of the homebuying process.  Instead of ruing the day of your home closing, use this handy list to help avoid the common pitfalls of buying (especially if you are financing) a home.

Indicators of a Haywire Home Closing:

1. You did not receive or pay attention to the numbers on the HUD-1 Settlement Statement

Picture this: It is the day before or the day of closing and you search through your emails to find the estimated numbers that your lender or closing attorney sent you 30 days prior.  You find the email, review the numbers and prepare the portion of money you are bringing to closing.  You head to the closing office and once you sit at the closing table, you are handed a settlement statement.  Gasp. You have to pay what?!  The number on the settlement statement that you are to turn over at closing is DOUBLE what you had been told 30 days ago - yikes!  

This is not a far-fetched scenario, especially if a homebuyer is not represented by a real estate agent, who typically will make sure the buyer is alerted timely to any changes.  Regardless, you as a homebuyer should always ask the closing attorney for the final settlement statement at least the day before the closing (but as early as possible) so that you are kept apprised of and minimize the effect of any startling changes.

2. You "forgot" to update your lender with your job or pay change

You started a new job in a new industry because this is the work you are really passionate about - congratulations.  Or, perhaps you have experienced a demotion, pay reduction, furlough or even lay off, which you know is only a temporary setback, from which you will rebound.  Either way, if you did not communicate this with your lender, you may be rudely awakened by the final verification process that the lender does to re-confirm your employment, credit and income.  It is wonderful to be optimistic and resilient but unfortunately the loan process will not see those positive attitudes as the requisite qualifications.  

Be upfront with your lender and agent as soon as you get wind of a change, whether positive or negative, in your income, credit (more about this on in the next point) or employment to prevent your home buying process from stalling out or coming to an abrupt halt.

3. You celebrated early by buying new furniture on credit

A new home, deserves new furniture, right?  Well, if you are purchasing with credit, then the answer is no, not until you have closed on the home purchase.  As mentioned, your lender will verify your employment, income and credit a couple of days before (sometimes the day of) your home closing date.  Unbeknownst to some home buyers, when you add debt to your existing credit mix, you can inadvertently lower your credit score and even push your debt-to-income ratio out of the required portions for your lender.  A simple purchase using credit can actually lead to your return to renting because you will not be allowed to finance the home any longer.

4. You did not add in buffer days between when you must vacate your current residence and your closing date

You have been given a schedule closing date and time from the closing office's staff - hooray!  You get on the horn and confirm that the movers will have you out the night before because you plan on driving the moving truck to closing so that you can begin unloading your furniture in your new home before the ink dries on the closing documents.  Wrong move!  Please give yourself, the seller, lender and attorney a grace period in case some of the items previously mentioned pop up or anything else expected or unexpected happens that can delay closing.

I have witnessed buyers sit in a closing table antsy that they are not able to move in that day because maybe by the time the all parties signed all documents and those documents were sent to the lender, the lender's banking hours were over for the day, causing the all parties to wait until the next business day (which can sometimes be 2-3 days later if a weekend and holiday are in the mix) for funds to be received.  Instead of spending and potentially wasting money trying to move the same day, give yourself a buffer of a few days just in case everything does not work out perfectly as planned.

5. You were only allowed to see the home once 

You have fallen in love with a home that is occupied by tenants, an ailing resident or just an ornery person. No matter what the reason being, you have not been allowed to see the home again since the first day you viewed it.  You may think that is okay but it is in your best interest to see the home at the least a few hours before closing to ensure that the home is in the same condition that you originally saw it in.  But the better practice (in addition to seeing it a few hours before closing) is to also examine it when you have a professional home inspection by a reputable company.  There are many substantial problems that cannot be discovered with the naked eye, especially if you are not familiar with the construction of a home.

Can you imagine how angry you will be if you close on the home only to later discover that there was a material difference to it or that there was something drastically wrong (like the roof needs to be replace, the plumbing is problematic and the like)?  Do not let this become a reality.

6. You did not have a real estate agent looking out for and representing your interests
When you work with an Agent+ (what I like to call a top-notch, professional agent), then you likely would have avoided points 1 - 5. If you are not a real estate professional and you are not represent by an Agent+, there is no one looking out for you.  The seller has no obligation to look out for you although he or she may be as "sweet as pie".  With an Agent+ you will receive guidance from start to finish during the home buying process to help ensure that your home closing does not go haywire.  Of course, no one, including the best agent, cannot prevent all external delays or issues but, an Agent+ can help you prevent the one's that you have control over and help you strategically weather the delays that are unavoidable.

Follow me on Google+ and Facebook for more tips and techniques. Also, if you are a real estate agent or manage agents, learn how to GROW or RE|VAMP your business with us today.  Here's to your success! 
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