A real estate closing is complex and involve multiple parties to complete. Each party, from the realtor to legal representatives to mortgage brokers, are pulling to get the transaction completed. After all, they get paid upon the successful completion of the transaction. While most professionals act in the best interest of all parties, you should always be your own best advocate during a real estate transaction. Being prepared and aware during each step of a closing can help you avoid costly mistakes.
In this blog, we review common areas where buyers should be particularly aware to avoid major issues and costly mistakes.
Not Reading the Contract
Contracts are never easy or fun to read. Real estate transactions can include hundreds of pages of documents that you are required to sign. Once you sign those documents, they become binding. There are no ‘do -overs’ when all is said and done. You owe it to yourself to review the documents carefully, and to consider employing an attorney to help you navigate the documents at hand. Ask plenty of questions and come to the closing with a command of all the material you are signing.
Not Disclosing Major Events
Life happens. People lose their jobs, have changes in financial circumstances, etc. Real estate transactions are structured under the assumption that your financial situation has remained unchanged since the time of your pre-approval. Several months can pass between the pre-approval and your closing, and things can change in that timeframe. If they do, you must inform your lender and agents right away. Your lender will require additional copies of your most recent pay stubs as proof of employment. If you can’t provide them and folks only find out at the last minute, the sale will most likely fall apart or need to be restructured.
Using Different Versions of Your Name
Only your legal name as presented on legal documents should be used on your documents in a real estate transaction. Using different and/or shortened versions of your name, nicknames, etc., will cause confusion and require paperwork to be reprinted for the closing.
Not Knowing What to Expect at the Closing
When the closing date approaches, you should know what to expect, who to bring with you, what documents are being signed, what parties are involved and, of course, where and when the closing is taking place to avoid delays. You are certainly welcome to ask questions and take your time at the closing. However, being completely unaware of the process is irresponsible; Again, be your own best advocate.
Big Purchases on Credit
The vast majority of homebuyers use their credit to secure a loan for the purchase of property. A pre-approval is a snapshot of your credit worthiness and it is checked again once closer to closing. If you make a large purchase, such as a car, after a pre-approval your credit can be significantly impacted.
Avoiding these mistakes at closing can help to ensure a smooth transaction on settlement day. The only thing left do is grab your keys and enjoy your new space. Principle Abstract and Settlement Services offers comprehensive title searches, title insurance and work closely with all parties involved to ensure a smooth transaction.
Ready to get started on a residential or commercial real estate transaction? Give our office a call and a member of our team will be glad to assist you.