11 Things Not To Do Before Closing
Guidelines of what not to do once the seller has accepted your offer:
At last, you have found your dream home, and the seller has accepted your purchase contract. For you, the buyer, the few weeks before closing can be very nerve racking since it is so important that everything goes smoothly. Do not worry. Follow these simple guidelines of what not to do, and your closing will should go as planned.
1. Do Not Switch Jobs or Careers
When buying a home, it is very important that you stay with your current job until after you purchase a home. Lenders do not like to see an inconsistent job history. If you must switch jobs, try to stay in the same line of work. Lenders are more likely to provide loans to individuals who have switched jobs but have remained in the same field.
2. Do Not Make a Substantial Purchase
Lending institutions look at few factors when considering you for a loan:
Since making a major purchase such as buying a car or new entertainment system can affect the above criteria, hold tight until you are in your dream home. Remember, financial experts believe that your first major investment should be your home.
3. Do Not Let Your Emotions Get the Best of You
You have just sold your old home and have a limited amount of time to move your family from your current residence. There is a house that your Realtor® took you through which is priced right. Plus, you and your family absolutely love it. You make an offer which the seller accepts. During the home inspection, you find many small items in need of repair.
In this scenario timing is critical, but don't let your emotions take over. Make reasonable offers to amend the situation. Do not lose your dream home because the seller refused to fix something which takes little time and/or money. No older home is without its imperfections. It is quite normal for the new owners to take on minor repairs. Then again, if it is something major which could devalue the house, do not buy it just because you have made it this far in the home buying process.
4. Do Not Go to Pieces Because the Home Appraises Below the Purchase Price
Know that there are certain steps you and your agent can do to amend this situation. Talk to your Realtor® about the options.
5. Do Not Do Everything Yourself
Your Realtor® is there for you to help make crucial decisions to assure that you will close on the home. Other resources, including your lender, escrow officer, and home inspector, are here to assist you in the process as well. Use these resources to help you along the way.
6. Do Not Dismiss Your Obligations
Again, there are many resources available which will educate you on what is and is not your responsibility. For instance, if your lender requires unusual documentation, you must provide it within an agreed upon time.
7. Do Not Conceal Pertinent Information from Your Lender or Realtor
You have finally done it - made an offer on the house that you love. What's that? You did not tell your lender that you have decided to be on the loan by yourself when your loan approval was based upon your in-laws cosigning for you?
It is important to reveal any information that could change the status of the loan, or your ability to buy the house. This is true even if something does not initially show up on a credit report, such as a recent line of credit.
8. Do Not Give a For Sale by Owner (FSBO) Money for Your Earnest Deposit
Never give your earnest money directly to a seller who is not listing with an agent. Sometimes sellers are unaware of the fact that this money is a good faith deposit to be applied to the purchase price of the home at closing. Instead, the earnest deposit should go into a trust account. If a trust is not set up for the deposit, you may have difficulty applying the funds to the purchase price or retrieving the funds if rightfully owed back to you.
9. Do Not Negotiate Deals on the Side
If you are working with an agent, all negotiations, agreements, and changes to the contract should be completed by the Realtor®. Failing to allow the Realtor® to do their job could delay or quite possibly prevent you from closing.
10. Do Not Forget to Switch the Utilities
As soon as a contract is in place, call all of the utility companies to apply for service. Also, get informed on the lead time to switch over service. Update the companies periodically on your closing date. The task sounds easy, but many people forget to do this and are without service for a period of time.
11. Do Not Forget to Obtain Hazard Insurance
This is another easily overlooked task, yet obviously important. Your lender will require an insurance binder for the new home prior to closing. Take care of it in the beginning so you are not scrambling at the last moment.
When buying a home, it is very important that you stay with your current job until after you purchase a home. Lenders do not like to see an inconsistent job history. If you must switch jobs, try to stay in the same line of work. Lenders are more likely to provide loans to individuals who have switched jobs but have remained in the same field.
2. Do Not Make a Substantial Purchase
Lending institutions look at few factors when considering you for a loan:
- debt to income ratio
- credit score
- job history
- cash reserves
Since making a major purchase such as buying a car or new entertainment system can affect the above criteria, hold tight until you are in your dream home. Remember, financial experts believe that your first major investment should be your home.
3. Do Not Let Your Emotions Get the Best of You
You have just sold your old home and have a limited amount of time to move your family from your current residence. There is a house that your Realtor® took you through which is priced right. Plus, you and your family absolutely love it. You make an offer which the seller accepts. During the home inspection, you find many small items in need of repair.
In this scenario timing is critical, but don't let your emotions take over. Make reasonable offers to amend the situation. Do not lose your dream home because the seller refused to fix something which takes little time and/or money. No older home is without its imperfections. It is quite normal for the new owners to take on minor repairs. Then again, if it is something major which could devalue the house, do not buy it just because you have made it this far in the home buying process.
4. Do Not Go to Pieces Because the Home Appraises Below the Purchase Price
Know that there are certain steps you and your agent can do to amend this situation. Talk to your Realtor® about the options.
5. Do Not Do Everything Yourself
Your Realtor® is there for you to help make crucial decisions to assure that you will close on the home. Other resources, including your lender, escrow officer, and home inspector, are here to assist you in the process as well. Use these resources to help you along the way.
6. Do Not Dismiss Your Obligations
Again, there are many resources available which will educate you on what is and is not your responsibility. For instance, if your lender requires unusual documentation, you must provide it within an agreed upon time.
7. Do Not Conceal Pertinent Information from Your Lender or Realtor
You have finally done it - made an offer on the house that you love. What's that? You did not tell your lender that you have decided to be on the loan by yourself when your loan approval was based upon your in-laws cosigning for you?
It is important to reveal any information that could change the status of the loan, or your ability to buy the house. This is true even if something does not initially show up on a credit report, such as a recent line of credit.
8. Do Not Give a For Sale by Owner (FSBO) Money for Your Earnest Deposit
Never give your earnest money directly to a seller who is not listing with an agent. Sometimes sellers are unaware of the fact that this money is a good faith deposit to be applied to the purchase price of the home at closing. Instead, the earnest deposit should go into a trust account. If a trust is not set up for the deposit, you may have difficulty applying the funds to the purchase price or retrieving the funds if rightfully owed back to you.
9. Do Not Negotiate Deals on the Side
If you are working with an agent, all negotiations, agreements, and changes to the contract should be completed by the Realtor®. Failing to allow the Realtor® to do their job could delay or quite possibly prevent you from closing.
10. Do Not Forget to Switch the Utilities
As soon as a contract is in place, call all of the utility companies to apply for service. Also, get informed on the lead time to switch over service. Update the companies periodically on your closing date. The task sounds easy, but many people forget to do this and are without service for a period of time.
11. Do Not Forget to Obtain Hazard Insurance
This is another easily overlooked task, yet obviously important. Your lender will require an insurance binder for the new home prior to closing. Take care of it in the beginning so you are not scrambling at the last moment.
