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What might go wrong in a residential real estate closing?

by | Mar 1, 2021 | Real Estate Practice

When you’re buying a home, nothing is more exciting than your closing day. This is the day when they get to pay the closing costs and sign the documents in exchange for being able to take possession of the home.

While most closings go through without issues, there are problems that can sometimes occur with this process. Pay close attention to everything from the final walkthrough up to the signing of the documents. If there is anything amiss, it should be addressed right away. Some points to double-check include these:

The house isn’t in the condition it should be

The final walkthrough of the home, which usually occurs on the day before closing, is your chance to make sure that everything is in the condition that you expected. Make sure that the owners have fixed anything that they were supposed to and that they didn’t cause any new damage to the property. If you notice anything wrong, you need to speak up immediately so that it can be corrected before closing or an appropriate escrow agreement negotiated and signed before closing for problems to be resolved after closing.  

There’s an issue with the title

You must ensure that the title to the home is clear and that everything is in order with it. Issues with the title can cause serious problems in the future, so be sure to carefully review this. Don’t assume that you can take care of title problems after you close on the property. Ask days before closing for a copy of the title commitment, which contains the requirements for the title insurer to issue its policy of title insurance, and any exceptions to the final policy of title insurance. If you have any questions on the requirements or exceptions, ask an attorney to review the title commitment before you close.  

Many of the issues that come up at closing are easily worked through, as long as you don’t finish the closing and walk out the door without fixing the problem. There are some that might be more complex or that will require legal action. Discussing these with your attorney is beneficial. You can find out what options you have for handling them and determine your next steps. Remember, time is usually critical in these cases so act swiftly.