12 crucial things to keep in mind when closing a property

Closing a property can be both exciting and stressful. You hope all goes well so you can start enjoying your new home or get down to work renovating your new purchase to attract tenants. For this to happen, you need to make sure you are in control. Of course, there are all the closing costs to consider, which can include fees that you haven’t thought about, but you should also make sure that the inspections have been properly done and that you understand all the details of the loan. No one likes surprise costs.

Below, Forbes Real Estate Consulting Members shared their top tips to help keep you on track throughout a new property closing. Here’s what they have to say:

Photos courtesy of individual members.

1. Check everything during the pre-close inspection

My checklist has 27 categories that should be checked. One category is making sure all windows open and close. The last time I checked, the online listings do not include verifying that all locks and keys are working. You want to take the walkthrough with someone who has already done it. If you don’t have an agent with fiduciary responsibility to you there, hire one or hire a local engineer. – Deborah Rabbino Bhatt, Vesta New York

2. Be prepared to pass inspections in all seasons.

When looking for a home, many buyers forget that there are several weather seasons. It can become a costly problem later on. A good example would be shopping in the spring or summer when home insulation is not an issue. If you buy the house and it doesn’t retain heat well, it will lead to huge electricity and heating bills, and can also lead to the purchase of expensive new windows that you weren’t prepared for. – Ralph dibugnara, Qualified reception

3. Be prepared and know how much money you need at the close

Get a copy of the preliminary closing statement to see how much money you need to bring to the closing table. Things like closing costs, lender fees, prepaid interest, or prorated property taxes could mean you have to shell out more than you expect. This simple step can avoid last minute surprises! – Gary Beasley, Roof

4. Recognize that timing can change

It’s important to stay flexible around the closing date, as last minute issues with the lender or title registration can delay the closing date. I would not recommend that buyers schedule movers or give a tenancy release notice without bearing in mind that there may be changes in the schedule. – Beatrice de Jong, Open announcements (YC W15)

5. Budget for costs after closing

Some would consider this common sense, but we see the blurred line between money in one’s pocket and money taken out of the bank. After closing, buyers are accountable for furnishings, renovations, alterations, and upgrades – real money coming out of the buyer’s pocket, as opposed to the bank. – Michel rubin, Compass

6. Have insurance

When preparing to close a property on the buy side, it is essential to ensure that you have the appropriate insurance coverage. Make sure you protect yourself by purchasing the right type of policy and coverage for your exit strategies, such as builder risk, flooding, and general liability. Inadequate or no coverage could be devastating in the event of an incident. – Melissa Johnson, Dannybuyshouses.com

7. Don’t Give Up Due Diligence in Favor of Time

Don’t let people on the other side of the market stress you out. Sellers and sellers ‘agents often create unnecessary urgency through tight binding contract dates in order to lobby past buyers’ concerns about inspection issues, for example. If you feel undue pressure to meet contract dates or forgo due diligence, tell the other party that you need time to fix the problem or walk away. – Garratt Hasenstab, Mountain Life companies

8. Plan early for investment properties in need of capital improvements

For investment properties in need of capital improvements, get quotes before closing and schedule your contractors and specialists while preparing for closing. In a hot market, many of these people are booked a few weeks in advance. If you don’t plan early, you can be sitting on a non-rental / non-marketable asset while paying the cost of transportation for longer than expected. – Catherine kuo, Elite houses | Christie’s International Real Estate

9. Don’t change your situation

Once their mortgage has been approved, the mistake buyers make is to change their credit or employment situation. Charging large expenses that change the debt-to-income ratio may disqualify them or increase their interest rate. The same applies in the event of a change of job or resignation to embark on a career of self-employed. Buyers must assume a wait-and-see pattern until the deal is closed. – Joe houghton, RE / MAX Results / The Minnesota Property Group Team

10. Demand accuracy and check statements carefully.

Do not rely on anyone else to make sure the settlement statement is accurate. Even simple real estate transactions have many levels and humans make mistakes. Buyers and sellers are the most important part of a transaction. Securities companies, brokers and lenders would not exist without them. Insist on seeing the settlement statement at least one day before closing and review it carefully for accuracy. – Z Otto Bonahoom, Bohouse Investment Group

11. Check your conditions

Despite the fact that over 99% of real estate horror stories are the result of a challenge with the financing part of the purchase, few real estate owners focus their due diligence efforts accordingly. Before concluding, make sure you understand all of the loan terms, their implications, and the steps you can take if things go wrong. – Hunter Thompson, Cash flow connections

12. Have a detailed schedule in place for investment properties

When closing an investment property, you should have defined your game plan for the entire project. This not only means that your contractor and your resale / refinance options are sorted out, but you also need to have a week-to-week rehab program and be ready to start work immediately. Time is money. – Mark Bloom, NetWorth Realty

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