Buying Real Estate Investments - Part 6 of 6 - The Closing

Well, we've made it to the final step to buying a home or investment property. You're almost ready to close (aka settlement)...But there are still things to do just prior to closing day.

First off, your mortgage lender will put you through the most rigorous steps for final loan approval. This means following their directives and providing them all of the documentation they require. While you may say you've already given them everything requested, don't despair. Some lenders update their records just before your application goes through the lender's underwriting department. Most times your file is complete and stamped "approved". But if they come back and ask for more, just smile, grit your teeth and provide it. Underwriters are hired for their focus on detail and their unwavering diligence in following the rules. If you follow their lead to the letter, you'll be given a "clear to close". In other words, we're ready to meet at the closing table.

If you have to move, are you packed??!! You'll be surprised at how fast the closing date will come. If you are an investor, have you contacted your property manager and do you have your tenant's contact information?

A day or so before closing you will have an opportunity to do a "walk-through" of your property. Here's your chance to see that everything is still in the same condition that it was when you decided to purchase the property and no one dropped a piano through the floor! Ok, that's a little extreme, but movers for the seller may cause damage, or move out the refrigerator, by accident, that should have been included in your sale. n That actually happened to a closing here in Pittsburgh, PA. So take advantage of the walk through. You'll be glad you did.

If you're purchasing an investment property, there is more involved, such as verifying occupancy permits, preparing new leases for your tenants (NOTE: Many states require that you, the new owner, honor the existing leases unless they include text in the lease to the contrary), ensuring any deposits are properly transferred to you (handled by the settlement company) and so on. Rely on your agent and the settlement company to ensure everything is covered and ready for transfer of the property at closing.

In these last few days, your title/settlement company will be in contact with you and your agent for any final documentation you need to verify. If you're the seller, the settlement company will make sure everything is ready to complete the transaction (mostly reflecting the local Borough's tests, inspections, etc.) Either the settlement company or your agent will inform you, the Buyer, of what cash payment is needed. Often this money is provided in the form of a cashier's check from your bank, but wire transfer is generally available as well.

Just plan ahead so that your funds are available when you arrive at the closing table and sign all final documents...and get your KEYS! Congratulations!!

If you missed the first 5 steps, feel free to browse back through the blog postings. Thank you for reading and sharing. Your suggestions for future blogs is always welcomed and encouraged.