What a difference a day makes
… when you are the buyer and or seller of a home and the lender drops the ball.
Closing on a home has never been more challenging, the real estate market bust has created numerous new “hoops” that Raleigh home buyers have to jump through in order to buy a house. If you bought a home only 4 years ago, you were able to apply for a “No Doc” loan, which basically meant that the bank required no documentation of your income, assets, etc. Obviously this played a part in the economic bust we are all experiencing now, and, as a result, the pendulum has swung back the other direction. New home buyers are having to provide every detail of their financial situation and the underwriter of the loan still requests additional information as late as the day prior to the home closing – a headache for all parties involved. It is critical to work with a local lender that is familiar with the NC Offer to Purchase contract and processes, for recommendations on tried and true mortgage consultants give us a call or check out the Premier Partners area of our website.
One thing that home buyers need to be prepared for up front is that the appointment for signing paperwork, commonly referred to as the “closing” does not mean that the home is theirs… the property does not officially change from old selling party to new home owner until the deed is recorded at the Wake County Courthouse. Why this is critical is because the home buyer cannot take possession of the home until this occurs. The following have to occur before the deed can be recorded:
- All documents must be signed by both parties at the “closing” appointment which in NC occurs at a real estate attorneys office.
- The signed (fully executed) HUD closing statement must be received by the lending entity before they release the funds through wire to the attorney.
- Once funds are received the deed can be recorded, THEN the keys to the home are released to the buyer and the seller receives proceeds from the sale.
- If their is a back to back closing where the first seller is also buying another home, the proceeds from their first sale must be applied to their purchase. Often this cannot happen within one typical business day therefore it is always best for the home buyers to plan for a 24 hour holdover for moving furniture, personal items, etc into the home.
One way around this dilemma is to use a savvy buyers agent and have them request Buyer Possession Before Closing. This may cost home buyers a hefty deposit as there is significant risk for the home seller, but if you are 100% certain you are taking possession of the home the deposit will be returned once you have purchased even if their is a delay.
Just recently we had a closing experience where the lending company created new loan conditions within a 24 hour window of the closing appointment – they had the files and all completed documentation from the buying parties 30 days in advance and STILL delayed the closing by an extra day. This affected 3 families (original home seller, their home buyer and the original home seller was also buying a home…) because the initial sale was delayed the week of a holiday and the deed to all sales were not recorded before the weekend. Had we not been able to negotiate possession before closing for all parties 3 families would have had to spend the weekend homeless all because the lender dropped the ball. Bottom line, use a local lender that is highly recommended for competitive rates but ALSO customer service and trust your buyers agent to be creative, on top of the transaction and always represent your best interests.