Setting a Closing Date
By Sadiya Anjum
Closing day can be very exciting for both the buyer and seller when money and home ownership changes hands. But if due to several unrelated problems, closing day keeps getting pushed for weeks on end it can be quite frustrating for all parties. To avoid such hassles it is best to prepare in advance and set an actual date. Undoubtedly with all preparation, problems may still arise delaying closing day by a few days but this is much better than waiting for some vague day.
Ideally the buyer should present a tentative closing date with his offer. The seller will review your offer and closing date, and suggest any changes if necessary. It is with the sales contract that an approximate date is fixed and after a loan approval that a definite date can be agreed upon. Most often closing occurs about 30 to 45 days after the contract has been signed but it is not a hard and fast rule.
Both the buyer and seller should mutually agree to a closing date after considering the various issues that need to be tackled with. The closing date is affected by the buyer, seller, lender and escrow/ closing agent. Each party has to complete several tasks before closing. For instance, the buyer has to apply and obtain a mortgage. The seller may require time to make repairs after inspection or move out and find another home. The lender may require specific checks or repairs done to the property before approving the loan. The closing agent needs time to process several documents such as a title review.
The buyer and seller can examine the various issues together and estimate the time required for each. They must keep in mind what action should be taken if there is a delay in loan processing, if an inspection report indicates defects, title is not clear etc. They must decide various options for each problem: for instance, if time should be allowed for a specific defect to be repaired or will they hold money in escrow to deal with repairs later and continue with the closing date. After taking into account various factors, a date can be decided upon.
If at any point the seller and buyer mutually agree to change the closing date, then they must inform the closing agent in writing. The closing agent will keep track of the closing process and will also charge interest, taxes etc. calculated until closing day. Both the buyer and seller on their part should avoid delay in closing. Perhaps the seller can arrange for accommodation early and the buyer should get pre-approved so there are fewer delays later.
Setting a closing date in advance becomes essential as the buyer and seller have to arrange for relocation. If the buyer is a renter and informs his landlord about moving out on closing day and then delays occur, then he may find himself stuck in a friendís place or motel. The seller also has to arrange for proper accommodation in relation to closing day.
In the end it will be the closing agent who will know exactly when the deal will be closed. So call to find out about the date, time, place and documents you will be required to bring. Make sure that the closing agent is relatively free on that day so you are not rushed through the process without having time to read any documents.
Delays may still occur even if you have thought of every possible what-if. It is best to have contingency plans especially regarding accommodation. But setting a date is a better option as it will help give momentum to the process and closing will happen as soon as possible.
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