Once an offer on a house is accepted and the contract signed, it may seem like the hard work is over, but an easy closing is not guaranteed.
Planning and communication are crucial to a successful real estate closing, real estate experts say:
1. Do your homework (and make sure agents do theirs, too).
When you find the right house, make sure all the necessary certificates of occupancy are in place, says Susan Owen, an agent with Coldwell Banker Residential Brokerage in Ronkonkoma. There should be a clear title that includes no open permits or liens against the property or homeowner.
An experienced real estate agent can also do a lot of groundwork, including calling the tax assessor’s office to make sure that the buyer qualifies for the true tax of the property.
“We’re supposed to find out the tax with the STAR credit,” Owen says. “The seller might have a VA discount, for example. I always call. If the tax is $14,000 and not $10,000, it could make the buyer not qualified.”
It’s also important that the agent is at the appraisal, since he or she might be able to point out things that aren’t obvious that could have an impact on the price, such as a geothermal heating system.
2. Hire a real estate attorney.
It’s important that a real estate transaction is handled by an attorney who specializes in real estate, says Dawn Wands, an agent with Douglas Elliman Real Estate in Port Washington. Don’t use a friend or an acquaintance who happens to be an attorney.
“Every time I’ve had someone who is not a real estate attorney, everything has gone horrific,” Wands says.
3. Wait on big purchases.
Hold off on making big purchases and pay credit card bills on time in the months before closing to prevent jeopardizing your loan approval.
“We make a joke and say you’re in credit prison when you sign a contract,” says William Leck, a loan officer with Fellowship Home Loans in Rockville Centre. “Just because you’re approved from day one doesn’t mean you’re automatically greenlighted to the closing table.”
If you’re relocating and need to purchase a car, or are starting a new job before closing, for example, make sure to run everything by your loan officer.
“Tell your loan officer to run a check with the new payment to make sure your approval isn’t in jeopardy,” Leck says.
4. Secure homeowners insurance.
Buyers should shop for homeowners insurance well ahead of the closing and also check for flood zones, says Owen. Check with insurance companies to find out whether a home needs flood insurance, he adds.
“Sometimes buyers are stunned when they realize what the flood insurance might cost,” Owen says.
5. Communicate about possible pitfalls.
Buyers and sellers should start discussing the particulars of the closing as soon as possible and try to mitigate potential problems, Wands says.
For example, Wands had a closing just before New Year’s Eve for a house in Port Washington. The buyers were from Brooklyn, and the walk through had to be done the morning of the closing, which was to take place in Smithtown. Wands says it wasn’t practical for the parties involved to travel from Port Washington to Smithtown afterward. Because Wands had a relationship with the bank, she was able to switch the closing to the nearby Douglas Elliman office.
“No one wants to drive the day before New Year’s Eve all the way out,” Wands says. “The key is to have a group that will work in a cohesive manner.”
6. Pay attention at the walk-through.
The agent and the buyer should do the final walk-through before the closing to ensure that the property is in order and nothing has changed since the buyer first viewed the home, says Lynn Goeller, an agent with Coach Realtors in Manhasset.
“I recommend taking pictures and making notes of anything that may cause an issue for monetary compensation at the closing,” Goeller says. “Money can be held in escrow, but that is frowned upon. Any issue should be discussed after the walk-through with the attorneys and the seller. There should be no surprises at the closing.”
7. Get the keys at closing.
“Post-possession” by the seller — allowing the seller to live in the home after closing — should be avoided at all costs, Goeller says.
“What attorneys are trying to do now is give the keys at closing,” Goeller says. “Sometimes when people move out . . . they ding something.”