Edgewood, WA Real Estate Blog

Rhonda Porter wrote another excellent post on her blog The Mortgage Porter regarding what a buyer should do before closing. Although written from a buyer’s perspective (as Rhonda is a mortgage broker), it’s also sage advice for sellers.

My biggest problem as an agent is getting a transaction to close on time, as scheduled. To a large extent, it’s how buyers and sellers measure how well I did as an agent. Most last minute closing delays are out of my control. Even though I counsel my clients early in the process about what is and isn’t within my control, a delay in closing is what sticks in their mind. It doesn’t matter if I may have otherwise performed brilliantly.

Last minute or late delivery of lender docs to escrow all to often result in closing being delayed. Most of the time it’s not the loan originators fault. It’s the underwriters in the back room. To them the loan is just another file to be processed… although the choice of lender is normally the loan originator’s choice.

How often have I gotten a call saying we need a couple days extension because docs are late? As if it’s no big deal. The movers are scheduled, plane tickets are in hand – and it’s no big deal. Or worst yet, this is the first transaction on a contingent sale. You won’t find many happy campers about if that call comes.

Always request a copy of the HUD-1 a couple of days before closing regardless of whether you’re a buyer or a seller. And let the closing agent and the lender know you’ll be doing so early in the transaction. Mistakes, and more often surprises, are not uncommon.

Sometimes it’s hard to pry a HUD-1 loose prior to closing, especially if the lender is late getting docs to escrow and the escrow (closing) agent is racing to meet the closing date. A lot of closing agents don’t routinely send draft settlement statements (the HUD-1) out to the agents involved. I suspect this is because real estate companies prefer their agents not review HUD-1’s for errors and thereby assume responsibility for accuracy.

I’ve been tempted to insert a clause in the purchase and sale agreement stating closing will not occur until after the seller has had a day to review the HUD-1. (If it’s my buyer, I usually help them select a lender who delivers on time and a closing agent who knows I’ll need the HUD-1 before docs are signed.)

When it comes to real estate transactions, surprises are about as welcome as food poisoning. Get everything you can nailed down as early as you can. It’s your best insurance for a smooth and timely closing.

Related posts: A buyer’s closing table checklist (what to check when signing closing documents) can be found here. Avoiding closing delays can be found here.