5 Tips to Keep Your Closing Date
Even the most well-intentioned buyers and sellers can have closing delays pop up seemingly out of nowhere. As a buyer, you're ready to get into your new home, and sellers are equally (if not more) ready to reap the financial benefits of their sale. Together, the buyer and seller will settle on a closing date with the help of the buyer's real estate agent and the seller's listing agent. But sometimes, this date has to be pushed back.
I experienced this personally, and the reason was literally one for the record books: The city where I live was covered in inches snow for the first time in 30 years. The weather fiasco meant the roof replacement that was supposed to take place before closing—a repair contingency the seller was required to take care of—couldn't happen. It also meant I had to negotiate with the tenants taking over my lease where I was renting and beg them to let me stay a little bit longer. In the end, it all worked out. And while, in my case, there probably wasn't anything I or the sellers could've done to keep our original closing date, there are ways in which a homebuyer can maintain control and get the keys on time. Here are a few tips:
Know You're Under Extreme Scrutiny
Knowledge is power, after all. While underwriting is happening, loan officers will be zooming in on every aspect of a borrower's life to make sure he or she is a viable, responsible candidate for a loan. A lender is forking over a lot of money to help you get into your home, so it's easy to understand why they want to have a crystal-clear picture of your past and current financial habits and work history. Understanding this from the beginning is a great baseline for following the next few tips.
Don't Change Jobs
I'm not saying that if you're offered your dream job you need to say no, but you do need to say you can't accept it for a couple weeks. A job change drastically shakes up your financial picture from the eyes of an underwriter. Even if it's a dramatic salary increase, lenders will see it as a risk since it rocks the status quo and you might not end up being able to keep it.
Don't Make Large Purchases or Open New Credit Cards
When you know a new house is just around the corner, you might be tempted to buy a bunch of furniture and put it all on a brand-new West Elm credit card. Just don't. Credit inquiries and large purchases are a red flag for underwriters, plain and simple. Keep your spending habits in check and consistent with your "normal" ebb and flow. After you've closed, you can think about getting that new sofa or dining table. Just remember, unexpected expenses are part of homeownership, so don't go too crazy too fast after ponying up for a down payment.
Be Available No Matter the Place or Time of Day
Your loan officer or real estate agent might need something from you quick, and even a small delay on your end can hold up the larger closing process. Check your email and phone often, and plan to have handy apps like a scanner app on your smartphone so you can sign and send documents on the go. Even if you have a rule of turning your phone off after 7 p.m. (bravo!), now is not the time to curb your screen time usage. Keep your devices handy, and be ready to write an email, answer a phone call, or track down a bank statement at any time during the escrow period.
Consider Moving in "As-Is"
In my case, the closing delay wasn't any fault of my own or the sellers, but since a new roof was a repair contingency, we agreed to push back the original closing date. In some cases, if a repair gets delayed, you can keep your closing date and move into a home "as is"—your real estate agent and the listing agent will work out a plan to make sure the seller keeps up his or her end of the bargain, but the repair will be made after you move in. For me, this wasn't an option: I couldn't very well move in without a roof over my head. But in some situations, a bit of flexibility on certain repairs means you could move in without delay.
If There’s Just No Way Around It
It happens. If your closing does get delayed, take a deep breath and know it will still happen... just not quite when you thought it would. Here are a few other practical things to consider while you wait:
- Call the movers! Reschedule if you have a new date, or if not, let them know you'll be contacting them as soon as possible once a new date is in order.
- Set up living arrangements, if needed. In my situation, I was able to negotiate with the people moving into my then-apartment. Other options include staying with friends or family, Airbnbs, or hotels and motels.
- Keep things moving as best you can by remaining in contact with your real estate agent, loan officer, the listing agent, and anyone else crucial to the closing process.
- Think about speaking with an attorney. Depending on the reason for your closing delay, you may want to get professional advice on how best to proceed.