Doing It Right
Even the most informed and conscientious buyers and sellers can make mistakes or overlook something during the closing process. Danielle Wright is a title processor for Northwest Title Company in Worthington, Ohio and has 20 years of experience in the industry. Wright has seen home buyers and sellers make common errors that disrupt or completely derail the closing process. Below, she outlines the five biggest closing mistakes. Keep in mind that what Wright describes applies to Central Ohio, and closing processes may differ in other states.
- Poor communication: Everyone involved in a closing—realtors, lenders, title company staff, buyers, sellers—need to effectively communicate so no balls are dropped. Wright says, “All parties must stay on top of the closing process. Buyers, especially, should be in constant contact with the loan officer to be sure the lender has everything they need to approve the loan.”
- Have the right form of funds: “Funds must either be in the form of a wire or cashier’s check. We have so many buyers pull out their checkbook and expect to write a $50,000 check at the closing table. Title companies must have ‘good funds’ at closing, because we are immediately writing checks and sending out wires to complete the transaction.”
- Getting documents to the lender: Avoid any lag time in delivering documents or information. Wright explains, “Buyers should turn in all the paperwork required by the lender ASAP. If the lender asks for more documentation, respond to that request and send them to the lender immediately. Lenders cannot submit the file to underwriting until all the paperwork is collected.”
- Homeowner’s insurance information: One step people often omit is informing their insurance agent when they are buying a home. Wright suggests, “Buyers should contact their insurance agent as soon as they are in contract to buy a home. The insurance agent will need the lender’s contact information in order to exchange information.”
- Marital status: Wright says, “Ohio is one of a handful of states that still recognize dower, which means if you are married and are buying or selling property, your spouse must sign either the mortgage or the deed at closing. The most common situation is when one spouse bought a property before getting married and then they don't realize that the former spouse has a dower interest in the property and must sign the deed at closing. Although there are a few exceptions to this rule, like cash purchases, trusts or companies, it is something many people aren’t aware of.”