Steps To A Smooth Closing
1. Fill out the purchase agreement completely:
- Type all names for sellers and purchasers and include their marital status we also need you to identify real estate companies and including email address. Purchase agreement must also include legal descriptions and tax id number (if you have two tax id numbers for the property please put both of them down).
- Sales Prices must be legible not scratched out. Earnest deposit must show which company is holding it.
- Funds and Terms must be filled out so we know if we need to contact the lender for the purchaser.
- Bill of Sale items must be filled out if the offer is changed you must have all parties initial the removal of an item.
- Home Warranty we must have the company this is providing the warranty along with the amount and who will be paying for it.
- Assessments: Please make sure you are checking with townships and cities if the property does have an assessment. The sellers may tell you they don’t but they might not realize that they have one on the property. The standard Ann Arbor Areas Sales Contract states seller is to pay off the assessment prior to closing. (This could kill your deal) Or the Seller may want you to pay for it out of your commission. (this has happened to many agents) BEWARE!!!
- Water/Sewer charges if they property is on a well and septic please cross that part off.
- Proration: Please make sure you are checking in each county to state the correct verbiage if taxes are to be prorated in arrears or advanced. This could be a very costly mistake if you use a purchase agreement for your buyer in Ann Arbor and the property is located in Jackson County.
- Occupancy: Please use the occupancy addendum and be very clear on the amount per day and also the day of vacating. You should also specify if the seller moves out early they will only pay for the days occupied after closing.
- Title Insurance: Please make sure to check off policy with or without or hand write extended policy if you want more coverage for your buyer at an additional cost. Also state who will be paying for survey if one is required.
- Seller Concessions: If you have any please put it under other in the purchase agreement and type it so it is very clear make sure you put in addition to cover closing cost, tax pro-rations and pre-paids.
- After you have an accepted offer please email the purchase agreement to title company along with payoff authorizations from the seller filled out with loan numbers and social security numbers. We will also need the Lender contact information for the purchaser.
2. Schedule Closing
- Wait for a clear to close!!!!
- Please make sure you are giving enough time on the purchase agreement. If purchaser is financing with an FHA or Rural give extra time at least two weeks. Underwriter requirements are getting really tough and the purchase agreement with only 30 days to close is not going to happen in that time frame.
- The worse thing you can do as an agent is to rush a closing that is not ready to happen. If you set a closing without the clear to close you are giving the purchaser and seller false hopes and will not have a smooth closing.
Guideline to follow:
Once the lender has given you clear to close and they have all the conditions met:
- Schedule the closing to happen within 3 business days or more.
- Call the other agent and find out a good time for their buyer or seller to close at the best location to accommodate all parties.
- Then call the title company to schedule.
The reason I state 3 business days is because it takes the lender 24-48 hours to prepare closing documents and it takes the title company 24-48 hours to prepare the real estate documents. That will then give an extra day to get hud approval and numbers to purchaser so they can get their cashiers check (always make sure it is payable to the title company that is handling the mortgage side) Making your closing very organized and smooth. You do not want your buyer at the bank trying to get a cashier’s check for an amount they don’t even have because we don’t have final HUD approval.
You will receive your real estate closing package two days at least prior to closing.
- Please look it over and go over it with your client in detail. Your client will appreciate you explaining the closing documents and they will be prepared for a closing. Again this will make the closing (SMOOTH) all parties will have correct documents no spelling errors or number changes at the table.
- Do not give your purchaser the final bottom line number until you receive the final hud from the title company. Usually one day prior to closing.
- Then you should call your client and go over the final hud with them making sure they understand all charges.
- The lender may also go over the final hud with the client but it really helps if both parties are involved because a lot of times the lender has never met the client but you have so they will relate to you on a different level.
- Also the more involved you are with your client the better the relationship for them to think of how wonderful you were during this process and you will be sure to get that phone call when they are ready to sell their home and buy a new one.
- Room filled with happy faces!!!!!!!!