Final walk-thru, figures, closing and possession all take place in the last 48 hours of the transaction. They are crucial to a smooth closing and occur in order as they are listed above. Completion of these items helps ensure that closing day is very calm and enjoyable. If not completed, chaos reigns and stress levels go through the roof. Let’s discuss them, slice and dice them, and let them lead you to smiles and celebration.
Your final walk-thru is the last time you see the house you’re buying before the closing takes place. It is usually done within 2 days of closing and its purpose is to make sure that the house is in the same condition it was at the time you wrote the contract, any repairs that were agreed on between the parties have been completed in a professional fashion and any items that are staying with the property after closing are still there. It sounds simple to accomplish and most of the time it is, but a couple of things can happen to frustrate the buyer and hinder the closing. They are (in no particular order):
- The house is cluttered with the seller’s belongings because they can’t move until the closing takes place. It should not be a great concern the buyer. Most sellers have a lot of pride in their home and they are not going to leave it in that condition. As a buyer, just make sure the work that needed to be completed has been done and leave it at that. If you are truly concerned with how the house is going to end up, after your closing, have your agent tell the title company not to fund to loan to the other side until you have went on another walk-thru.
- The repairs are not complete as agreed upon. This is a critical issue. Once the seller has their money and are out of the house, it is very difficult to get them to do things they were supposed to. If the repairs are of a substantial nature, you may need to halt the closing until they are done. Another method to ensure the completion of the work is for the title company to escrow some of the seller’s proceeds until the repairs are done. This may delay or stop the closing depending upon the type of repairs that were not finished.
Figures are a shortened description for the RESPA or Settlement Statement (balance sheet for your closing). It will show all of the debits and credits of the transaction that are on your side. Credits may include: Earnest Money Deposit, the amount you borrowed to the taxes, sewer or water bills that the seller owes you for the portion of the year they occupied the house, the amount of credit you’re getting from the seller for closing costs, pre-paids and inspections (if they were agreed upon in the contract). Debits may include: lender charges for processing the loan plus any other bills you’ve incurred during the process of buying the house such as title search and insurance, homeowners insurance, survey, credit reports, appraisals, escrow account set-up, and many more. (Click on settlement statement).
Everyone wants their figures early, but that is not how it happens. In order for figures to be completed, both the lender and the title company have to agree on all the charges and all the credits. Once that has been accomplished, figures are quoted and you are ready to close. This does not usually occur till the afternoon before closing or the morning of closing, which is normal. So don’t fret or worry its normal. Once you have the figures, you are required to bring whatever amount it is to the title company in the form of a cashier’s check made out to the title company. No exceptions. His lender and the title company will go over the figures with you and your agent at the closing and if there are any mistakes, they will be changed at that time and you will be issued a check for any monies you are entitled to.
You should schedule your closing for early in the morning because you are not entitled to possession until the FUNDING has taken place. Funding means the lender has got all the documents signed by both the seller and the buyer and the loan has been funded, which then allows the seller to have their proceeds given to them. The seller will not normally let you have possession until the funding occurs and that takes a few hours after you have closed so if you close late in the day you may not get possession until the next day. It happens more than you think. Avoid it by closing early in the morning, soon after the title company opens.