Ensuring a Smooth and Problem-Free Closing

Whether you’re selling a home next month, next year or in five years, the day that you accept a buyer’s offer is going to be a great day for you.

However, don’t celebrate too soon. You still have a couple of steps left that may trip you up—including your settlement. Unfortunately, problems at closing are all too common these days, but with a little forward thinking and planning ahead, you may be able to sidestep potential pitfalls.

Here are four problems you may encounter at closing and what you can do to avoid them:

The home inspection is vital. Unfortunately, residual problems from the home inspection can crop up at closing. The key is to ensure all of the necessary repairs have been completed and that local laws concerning permits and certifications have been followed (even for past repair work). If you want to pass the buyer’s home inspection with flying colors—and avoid problems at closing—consider having your own inspection done. Also, keep an eye out for any new issues right up until the day of closing.

Do you have renters? Having tenants while a home is on the market can make the selling process a bit more complex, but don’t let tenants end up being a problem when you close. Have any new repair issues come up? Have the tenants fully moved out (yes, it happens)? To avoid having your renters become a third party in the transaction, make sure you’ve scheduled in plenty of extra time between the tenants’ move-out day and the day you close.

Make sure the title is clean. An issue with a home’s title is one of the most common problems that occur at closing. Usually, a title search is done shortly after an offer on a house is accepted. However, if there’s a sizeable time period between the offer being accepted and the day of closing, be careful of any outstanding payments for remodeling or repair work, homeowners’ association dues, state or local property taxes, etc. that could cause a lien to be placed on your property right before closing.

Do you have enough money for closing? Although it’s far more common for a buyer to be unable to come up with enough funds to cover all of the closing costs, it can happen to a seller as well. This usually occurs when a seller is underwater on their mortgage and can’t raise enough funds to cover a shortfall in paying off their own loan. Obviously, you can’t control the buyer’s financial situation, but you can definitely control your own side of settlement.

If you want to be as prepared as you possibly can be for your closing, make sure you talk to your real estate agent, lender or title company about any concerns you may have. ∆