Real estate closings can be extremely confusing and complicated. There are a lot of unknowns and what-ifs in the process. Sometimes setbacks delay the closing for months. Several moving parts make up the closing process, including title issues, lender requirements, appraisals, financing concerns, potential structural or maintenance problems, liens, and more.
What you can do to ensure that the closing process runs smoothly will depend on which side of the transaction you are on. The things you do as a buyer will not be the same as the items you can control as a seller.
As a buyer, you can take the following steps:
1. Get conditional approval from your lender before you make an offer.
If you are pre-approved, you are less likely to have any major surprises when you want to finalize your financing options. You can also get your loan funds much faster when you are ready as well. Keeping certain documents, such as pay stubs, bank statements, and other proof of income can be very helpful too.
2. Create a timeline for repairs.
Once you have made an offer, and it is accepted, then the next step is to have an inspection done. The inspection will provide a list of concern areas on the home. In many cases, you can go back to the seller and ask that problem areas be addressed. If you do this, it is a good idea to create a timeline in which the repairs should be done so everyone knows what to expect. Do a final walk-through at least a day before the closing date so you can inspect the repairs.
As a seller, you may want to consider the following tips:
3. Locate your abstract immediately!
In Iowa, we use paper abstracts in real estate transactions. An abstract includes all of the necessary documents to show how real estate was transferred or affected for the life of the real estate. This document is bound and typically ½” to 3” thick. If you do not have it in your possession, the HUD/Settlement Statement from when you purchased your home can help our office locate your abstract. If you cannot locate your abstract AND do not have your HUD/Settlement Statement it may be necessary to rebuild your abstract, which is very expensive. Once you have provided your abstract to our office, the continuation process typically takes 14 days.
4. Be sure to have professional help in place early!
Sellers do need to have an attorney in place to assist during the closing process. Waiting until the week before closing to engage a law firm nearly guarantees a delay in your closing. Danilson Law focuses on assisting sellers in real estate transactions and can help ensure a smooth closing for your sale.
5. Be clear about the timeline.
Whether you are a buyer or a seller, you should be clear about the timeline that you need for the transactions. Buyers may be selling another house, and their purchase is contingent on that sale. As a seller, you may be purchasing your next home and need the proceeds from your sale to buy the next property. Both parties should communicate directly to ensure each understands timing of possession and closing. Communication during real estate transactions is essential from all parties.
Learn more about how we can help you by calling 515-512-5500.
