When It Comes to Real Estate, the Details Count: Three Costly Closing Mistakes to Avoid

In real estate, it is important to get the details right. Mistakes can damage or even kill the deal. Your real estate deal can fall apart right up to the moment of closing.

The New York Times tells the story of a closing gone very wrong. The buyer and his purported wife were asked for identification. Only then was it revealed that the supposed wife was the mistress. The couple had used the real wife’s credit and income to buy the apartment. This is an extreme example and certainly a self-imposed mistake, but the point is… there are a whole lot of details that you have to keep straight in order to close on a real estate transaction. Here are three tips to help you avoid disaster:

Be prepared for the unexpected.

There’s a lot of potential for things to go wrong in a real estate deal. What happens if there are last minute problems related to the condition of the home? What happens if a tornado destroys the home an hour before closing? What happens if the seller decides she wants to tear out the fireplace and take it to her new home? There are even instances of buyers—or sellers—not showing up for the closing. There should be some protection for you in the contract for last minute chaos. A real estate contract should protect your interests in most situations.

Don’t leave town a week before closing.

Problems can pop up anytime in a real estate deal, and you want to be available to deal with them. If there are problems with the inspection report or your loan has suddenly gone south, it’s important to be available to address the situation and sign papers. If you’re really interested in the property you’re buying, you can’t take your eye off the ball- a lot can happen between signing the contract and a successful closing.

Buying a BMW or quitting your job.

Well, if you’re a multimillionaire buying a BMW isn’t going to be an issue, but it may well be if you’re not quite that rich. Your loan can still be denied even if you’ve been preapproved, and if you withdraw funds before closing, the bank will probably want an explanation in writing. This is also not a good time to get new credit cards. Even switching jobs could be a bad idea. Some lenders will verify your employment again just before closing.

It’s not uncommon to get denied for a loan just before closing, and you want to avoid doing anything that’s going to give the lender a reason to do so.

If you’d like more information about real estate contracts, give us a call. And, if you’re involved in a real estate transaction, we would be honored to represent your interests and make sure that the deal gets done right!