You made it to Closing Day! How To Avoid Problems and Delays

Hank Bailey
Hank Bailey
Published on June 21, 2019

Purchasing a home for the first time can be a daunting experience, and on the closing day everything in the buying process comes to a head! Dealing with unexpected issues that may arise can be difficult. While some problems can be easily solved, others can derail a deal or at the very least delay a deal, at the last moment.

Disheartening walk-through surprises

The final walk-through of the property is the number one cause of unexpected issues on closing day. The final inspection takes place the day before, or during the morning of, closing day, leaving the buyer with not much time to prepare and react to potential problems.

Remember however, the final walk through is not another due diligence to find additional or new issues in the home that were not brought up during your due diligence.  The final walk through does allow you to inspect repairs agreed to in the contract along with making sure the home is in the same shape as it was the day you put a contract on it.  That’s it.

On a listing of mine recently I received an email from the buyer’s agent regarding her final walk through where she said…”Thank you very much for sending the receipt (for repairs). We appreciate the additional work completed. I was with the buyer today for the final walkthrough and everything looks great. However, we noticed that one of the garage door is unable to open since there is no garage door opener installed. My buyer will have more than three cars and will definitely need to use both garage doors. This will affect its proper function. Please if your seller can install the garage opener before closing.”

That was answered with a resounding, “No.” I explained to the buyer’s agent if the buyer had wanted that done, they should have asked for it during their due diligence.  To reiterate once again, the final walk through is not a second due diligence so make sure you are diligent during your inspection period to note and ask for anything that’s a concern to you!

What the seller takes with them

A common issue on closing day is confusion between the buyer and seller over which items are taken by the seller and which items remain with the property. Perhaps you liked the new clothes washer and dryer at the property and were disappointed to discover it had disappeared on closing day.

Unless you’re extremely attached to an item and regard it as a deal breaker, it is often best to let go any issues over the transfer of items or personal property of the seller. The simplest solution to any misunderstanding on closing day is to state in the contract what is expected to remain or must be removed. Be detailed and make sure that the contract matches what you expect to be in the property on closing day.

The easiest way to make sure it is crystal clear what stays is to make sure a copy of the seller’s property disclosure statement is included as an exhibit to the contract.  In Georgia, for example, there is a fixtures checklist to note anything that will remain with the property. This takes the guesswork out of whether those blinds or drapes are included with sale and stay or do they go!

Money transfer problems

The crucial part of closing day is the transfer of funds. Some banks and financial institutions prefer to conduct transfers electronically, while others prefer certified checks. In Georgia for example, it’s state law that closing funds in excess of $5,000 have to be wired to the closing attorney prior to closing. If you make a mistake with account numbers, you can delay the deal. Make sure therefore that you have wiring instructions from the closing attorney’s office a few days before closing so you can ensure that no issues arise the day of closing.

Seller hasn’t moved out yet

Never a fun issue. If the contract states that the transfer of possession occurs at closing, then you need to do a final walk through after the seller has moved out to make sure that they’ve actually moved out! I’ve only seen this twice in my career, but when it happens it’s ugly.

Other Issues

Other closing day issues we’ve seen, and many may have experienced in the past, such as title issues or loan problems are systematically handled and addressed well before everyone walks into the attorney’s office on the day of closing. A title search will have been done well before the date of closing and normally the lender won’t even schedule a closing until title work is back and reviewed.  In the past, we may have seen a delay in a loan package getting to the closing attorney on time or the file itself being delayed in getting “clear to close” even by the day of closing.  Today due to TRID guidelines, the CD or closing disclosure has to be signed off on three (3) days prior to closing.  At that point, it’s effectively a done deal so go close and enjoy the benefits that homeownership has to offer!

What happens if problems are found

If during the final walk through, whether you see damages that may have occurred on the seller’s move out or repairs that were not completed per the contract, the closing attorney may hold in escrow some portion of the seller’s proceeds of sale until those issues are rectified. That way the closing can still take place.  To make sure you are covered, it’s always a good idea if you can to have a contractor also quote or bid out those repair items in the contract to know roughly what the cost should be.  In this way, the closing attorney has a true figure on what should be withheld in escrow for a given repair if not completed in the timeframe allotted in the contract prior to the day of closing.  Your agent can certainly refer you to contractors that should be able to provide quotes on various repairs items during due diligence.

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