Avoid These Mistakes to Ensure a Smooth Real Estate Closing

The average time needed to close on a home loan, as of December 2018, was 47 days, according to Ellie Mae. Although that number often fluctuates based on market conditions, buyers can reasonably expect that after having their offer accepted, they might be waiting 5-8 weeks to move into their new home.

Sellers are waiting all that time, too, and it can feel like an eternity. Moreover, many things about a real estate closing can go wrong along the way, thus delaying (or, in a worst-case scenario, preventing) that day when all the signatures are signed and the keys are handed over to the new homeowners.

Some parts of the closing process are out of the real estate agent’s hands as everyone waits for underwriters, title companies, home inspectors, and other key parties to come through on their end. But there are things agents can do—and mistakes they can avoid—to make the big day (and the weeks leading up to it) smoother. Here are five common gaffes you should be aware of as a transaction works its way toward closing.

Not Reviewing the Closing Documents

Ask any homeowner about what they remember about closing, and they might answer, “Signing so many documents that my hand cramped up and the pen ran out of ink.” Document madness is inescapable during closing, and even if electronic closing is involved (thus saving pain and ink), dozens of documents and forms are needed to complete the process. Whether you represent the buyer or the seller, carefully reviewing all documentation ahead of time is essential for avoiding problems on closing day. All technical and financial details obviously should be in order, and something as simple as a typo in the buyer’s name or birthday (over multiple documents) can cause delays. And if you are the seller’s agent, a final review ensures the closing proceeds as planned—and you finally receive the commission you’ve worked so hard for.

Failing to Counsel Your Client

The time between an accepted offer to buy a home and the actual closing is a waiting game for buyers, who want the sale to go through but fear something will go wrong. Unfortunately, buyers are often the reason the sale goes awry before closing. Inadvertent buyer mistakes that can derail a closing include:

• Spending existing funds needed to complete the closing

• Ordering a credit report, which generates a new closing disclosure that can delay the process

• Doing something that triggers a credit report update, such as lifting a credit freeze or opening a new credit card account

• Borrowing money or putting a purchase on layaway

• Missing an existing credit card or loan payment

• Cosigning on someone else’s loan

• Changing or closing bank accounts

• Making big purchases, even for items for the new home (e.g., appliances, furniture)

The last bullet point is noteworthy for two reasons. First, unless buyers have several thousand dollars lying around, they are likely purchasing those big-ticket items on credit, which can interfere with the closing in progress. Second, if the sale falls through for any reason, the buyer may not be prequalified for as much (or have strong enough credit) for the next sale.

These tips seem like things buyers should know, but many don’t realize how much their innocent, antsy actions can impact the fragile real estate closing process. As their agent, you should be advising clients against these pitfalls and be in constant communication with them in the days and weeks before closing.

Skipping the Last Walkthrough

The house looked great every time you and your client walked through it before your offer was accepted, and it passed inspection, so maybe a final walkthrough isn’t necessary? Trust us, it is. Although skipping this step saves time for all parties, you may miss problems that can cause chaos during or immediately after closing.

A final walkthrough ensures the seller is out of the property (unless they are renting back for a period of days, as agreed upon in the contract), has addressed any issues that came up during inspection, and hasn’t caused any new damage since the inspection. Basically, this step ensures your buyer is receiving the home in the condition that is spelled out in closing documents. Granted, a problem found on this last walkthrough can throw a little wrench into closing and possibly delay it, but better that wrench is dealt with sooner than later.

Not Anticipating the Unexpected

Even when every party involved in a real estate closing has shown due diligence, something might come up at the last minute, when everything is being signed, that threatens to interrupt the smooth conclusion of the process. As an agent, you can mitigate any surprises by:

• Reminding your clients to bring their checkbooks in case any unexpected expenses come up

• Reminding clients to bring valid, accurate (last names need to match the closing documents), and non-expired photo IDs

• Bringing all additional documents, such as bank paperwork and proof of homeowner insurance for buyers and receipts for post-inspection repairs for sellers

• Bringing the keys

If the unexpected does occur, your role will be to explain why and reassure your client that this is just a bump in the road that likely (hopefully) can be overcome. By thoroughly preparing ahead of closing day, you can catch most potential surprises well ahead of time.

Ending the Relationship Upon Closing

Closing concludes, the buyer gets the keys (yay!), and everyone breathes a sigh of relief. But your job as agent isn’t done, particularly if you are representing the buyer. Many agents like to give clients closing gifts, something practical that can help them with their new home or even just a bottle of champagne to celebrate. These nice gestures show clients that you appreciate them and that they were more than just names on a contract.

That said, continue to check in with buyers in the days and weeks after closing. Stop by as they’re moving in. Call or text them to see how life in their new home is going. Ask about any problems and determine if you can help. Invite them to send pictures of their new home to you or to post them to your social media accounts.