Closing should be the last step in a real estate transaction. You sign the paperwork and get the keys to your new property. You officially become the owner of that property.
However, especially for those who are going through this for the first time, mistakes could be made – and they could be very costly. They could even cause the deal to fall through. Below are a few examples of potential mistakes and issues.
1. Confusing preapproval and final approval
One problem is if final approval for the mortgage hasn’t actually been given. It could fall through on the last day. Some people believe that their preapproval letter means that they are guaranteed to get the funding, but they still need to get final approval from the lender.
2. Not conducting a title search
It is important to carry out a title search, in many cases, to be sure that there isn’t anyone else who is going to claim that they own that property. The title search checks for ownership issues, unpaid taxes, liens on the property and things of this nature. Skipping this step could mean serious disputes down the line.
3. Unfulfilled requirements
Finally, sellers are sometimes required to take certain steps before closing. For instance, maybe there was a property inspection contingency. The inspection found issues with the property that need to be corrected before the title changes hands. But if the seller didn’t do that before transferring ownership, it may only come to light at closing.
Whether you’re buying commercial or residential property, you want to avoid significant mistakes that can derail the process. It may be helpful to work with an experienced legal team at this time.
