From showing houses to verifying real estate values to negotiate the best deal, a dedicated agent helps buyers every step of the way. Clients rely on their agents to help them navigate one of the most significant investments in a lifetime, especially first-time home buyers. Discover seven facts agents should tell buyers before closing on a house.
A Final Mortgage Approval Kicks Off the Deal
A buyer’s agent should always encourage clients to get pre-approved for a mortgage before shopping for homes. A pre-approval shows the buyers are qualified and lets them know how much they can afford to spend. Before closing on a house, the financing arrangements must be confirmed. The sales contract typically specifies how long the buyers have to secure financing.
The mortgage underwriters will scrutinize the buyers’ financial situation to ensure they can pay back the loan. Underwriters verify all statements on the loan application are true, verify income, and check the buyers’ credit scores. The home appraisal will also be reviewed. Agents should advise their clients not to finance any other large purchases while buying a house, as that could lower their credit scores.
Every Buyer Needs a Dedicated Team
The next step is to ensure the buyer has a dedicated team of professionals to assist throughout the process. The first people a buyer works with are a lender and real estate agent. Once they make an offer on a property, it’s time to find the other necessary players to move the deal forward. The closing team members include an attorney, accountant, home inspector, insurance agent, and title insurance agent.
A savvy buyer’s agent maintains a list of reputable local professionals to recommend to clients. Network with other people in the industry, and get plenty of business cards to recommend them. Encourage reciprocal referrals to get more leads.
Follow a Closing Checklist for Success
Closing on a house is a confusing time, especially for first-time buyers and people who are relocating. A buyer’s agent can put clients at ease by providing a closing checklist for success. Main points to include in the list are:
- Schedule a home inspection to ensure the property has no undetected faults that could add up to significant costs after closing on a house
- Have a professional appraiser determine local real estate values and prepare an appraisal of the home to prove its current market value to the lender.
- Provide a myriad of financial documentation to the lender, including income tax statements, pay stubs, bank account statements, insurance documents, and more.
- Order a title search to ensure the property has no liens or other encumbrances that impact the buyers.
- Secure homeowners insurance on the house in the event, it is damaged or destroyed, and if any accidents occur in or on the property.
Closing Dates are Speculative
The contract specifies a projected closing date, and often buyers believe it is etched in stone. Closing dates are estimated and can vary by a couple of days or weeks. Sometimes the delays are longer if the lender requires additional documentation to approve the mortgage. Most delays are the result of financing questions. Delays may also be caused if termites or other conditions are found during inspections and require remediation. Clearing title exceptions also takes extra time.
And certain types of mortgage loans take longer to fund than others. VA, HUD, and FHA loans typically take a couple of weeks longer to close. Government agencies must review the loan documents to verify they are in accordance with all terms and conditions to qualify for the financing. Encourage buyers to be patient, reassuring them it takes time to get into their dream home.
Review the Closing Disclosure
The buyers must have ample time to review and sign the Closing Disclosure before closing on a house. This necessary paperwork outlines the closing costs associated with the sale, so the buyers are prepared to come to the table with the right amount of money. Typically, the mortgage lender or title insurance company sends the CD to the buyers at least three days before closing.
A buyer’s agent should be in touch with the title company to verify this necessary paperwork is sent on-time. Without it, the closing will have to be rescheduled. While some delays are inevitable, this one can usually be prevented.
Do a Final Walk-through of the House
The final walk-through is one of the last formalities before closing on a house. Usually, the walk-through is incident-free because sellers are eager to close the deal. But this may not always be the situation. During the walk-through, buyers determine if the house is in the condition they expected before taking possession.
For example, all repairs should be completed per any inspection reports. All the appliances and other items included in the transaction should be present and in good working condition. And there should be no new damages to the property, such as a broken window or a large hole in the wall. If any problems arise, working them out can delay the closing.
Bring Essential Documents to Closing
Once buyers realize the importance of the six previous facts, it’s time to attend the closing. Advise them to bring the correct documentation to close the deal, such as:
- Photo identification for all parties to the contract and mortgage note
- Any outstanding paperwork requested by the mortgage lender and title company
- A certified or cashier’s check made payable to the title closing company to cover the closing costs that are not deducted from the final sales price.
Once the closing is over, the buyers might be able to move into the house right away. Sometimes the sellers request a few days to move out. The terms should be outlined in the contract, so everyone knows what to expect. Agents should always remember to connect with buyers after the closing. Give them a small housewarming gift and include a business card in case they need help in the future.
Buyers rely on their real estate agent to keep them informed and prepared as the deal unfolds. Better Homes and Gardens® Real Estate agents have access to the Be Better® University to learn the latest ways to help clients achieve their goals. An agent who reassures buyers and thinks ahead to avoid problems is sure to be appreciated. And this appreciation is often expressed by clients in repeat business and referrals.