For a homebuyer, closing on a property means finally having the flexibility to build and create your own living space and, as homes typically appreciate over time, some measure of financial security.
Unfortunately though, closing also means having to comb over pages of legal documents, budgeting for closing costs, and finalizing your home financing. By being prepared before moving day, you’ll make sure there are no surprises.
10 Keys to hassle-free closings
By the time a closing is scheduled, you’ve invested at least dozens of hours in a transaction. If it jumps the track and blows up on closing day, you could lose the commission you’ve worked so hard for — and take a hit to your reputation with a disappointed buyer and seller. Here are 10 keys to making sure that doesn’t happen.
1. Be the Hub
You are the center of the transaction — so make sure you’re in control. Put the best interest of your clients and customers first by helping them find the best, most reputable real estate professionals with whom to work. Make sure that the buyer is working with an honest lender who will provide the best rates and the best service. The same holds true for the title company, attorney or inspector. Don’t leave any of these choices to chance or random selection.
2. Use That Speed Dial
The contract may be signed, but that doesn’t mean the phone should go quiet. Rather than delegating the rest of the process to lawyers and title firms be proactive. Pick up the phone, call the attorney, lender or title company to find out how things are progressing, and ask if there’s anything you can do to help. That could mean being present at a home inspection, for example, or simply introducing yourself to the buyer’s attorney by phone.
3. Work with a Multifaceted Lender
A lender who has control over the underwriting, funding and closing process can be an ace in the hole for a buyer. The odds of getting problems worked out quickly rise when those calls are made to multifaceted lenders that control the whole process of underwriting, funding and closing. They can often make decisions and provide answers in minutes rather than days. They’re also more accountable, since an internal team is handling the processing, underwriting, funding and closing package. Be sure to ask if the chosen lender funds and closes loans in their own name.
4. Stay on Top of Contingencies
When the deadline for an inspection or other contingency comes and goes without being fulfilled, it can put an entire deal in jeopardy. Stay on top of all contract deadlines, especially those related to the “intricate parts of the contract.” Because buyers rarely read the entire document, it’s up to the associate to know that a certain inspection must take place by a certain date or that another action, such as a notice to the buyer, must be completed by a specific time.
5. Pay Attention to Condo Documents
Associates, who aren’t always familiar with the paperwork and contingencies associated with condo sales. By law, for example, buyers must be given a package of condo documents that were initially provided to the Florida division of Condominiums by the developer. Once these documents have been received, the buyer has a 15-day rescission period on a new development and a three-day rescission period on a resale. Associates can make a difference by tracking down the documents (through public records for example) and giving them to the buyer as early as possible.
6. Negotiate Well in Advance
Make sure everything that can be negotiated is addressed early, preferably at or before contract signing, review the contract with both parties and tell them that the document is a road map for the rest of the transaction. Title searches, physical inspections, bank financing and the dates associated with those and other steps should follow the map outlined in the contract.
7. Know the Transaction Process
More than one sales associate has been put a transaction in jeopardy simply by not understanding the transaction process. “These cases, ultimately ending in litigation, could have been mitigated had all parties involved in the closing understood the process and outside influences that were affecting the transaction,” says Rivera, who advises associates to stay on top of their evolving industry, changing market trends and the transaction process itself. By taking courses that explain price rates and interest markets, and by knowing and understanding the current trends in the real estate market, says Rivera, “[You] can ensure that the transaction will run smoothly and close in a timely manner.”
8. Stay Organized
It sounds elementary enough, but dealing with reams of paper and digital documents can get cumbersome, particularly when you’re working on multiple transactions at once. Check out software that tracks and automates closings and retain important documents, dates and other information in a folder (either on your computer or in a filing cabinet) dedicated to each transaction.Software programs and Web-based programs can help you manage the transaction by having all vendor updates and paperwork in one spot. One such Web-based program is TransactionDesk, offered by FAR’s technology subsidiary, Real Estate Industry Solutions. The Web-based real estate transaction and document management solution is provided free to FAR members and operated by Ontario-based Instanet Solutions. (Click here for more information).
9. Talk to the Lender
Throughout the transaction process keep the lines of communication open with lenders and reach out to them early and often, to ensure a smooth route to the closing table.
10. Invest in Training
Hassle-free closings are a product of the associate’s knowledge and expertise. The ability to recognize and mitigate problems quickly comes with experience, but that doesn’t mean newer associates can’t go into a deal with the same level of confidence as a veteran. All it takes is training.Take courses in the legal aspects of real estate, effective client and customer communication, investment real estate, financing, negotiation and conflict resolution as good starting points, and many helpful courses are available from FAR (click here for more information).