You can thank me later if you take this simple piece of advice. Don’t close a real estate purchase on Fridays. I’ll briefly go over what could happen, why it happens and how to easily avoid problems.
So what could happen if you try to close on Friday? There is no point in sugar coating it. You could be homeless for the weekend and be out hundreds to a thousand or more dollars. You’ll be paying to stay at a hotel, or couch surfing with friends or family. You’ll be paying extra to store your belongings over the weekend. You may also have to pay extra fees to reschedule movers. And most of all, you will have a considerable amount of stress dealing with it.
Why would this happen? Increasingly in today’s market, bank underwriters are throwing monkey wrenches in the works with last minute requests. These last minute requests, usually involving more documentation, just do not give a buyer, agents or loan officers time to resolve it. In many cases even a 20 minute delay on Friday could mean having wait until Monday to close.
For numerous reasons, banks are not working on files until just prior to closing. Most of the reports I’m hearing are of short staffing, slower processing due to changing lending requirements and laws. It’s happening at the biggest banks and the small local ones.
Avoiding this potential problem is very simple. Schedule your closing on Wednesday or Thursday. Even if you plan to move on Saturday, you will save yourself considerable stress if a delay is encountered. Even though you’re paying for two days you don’t plan to live there, it’s well worth the piece of mind.
You might be wondering why not just get the seller to let the buyer move in early? Agents and seller’s are generally not willing to do that for two primary reasons. First, until the sale is closed, the buyer’s financing may not happen. The seller then legally has a tenant even if they didn’t charge any rent over the weekend. The seller may not be able to buy their next home and will have to move back in. Since the buyer is there, you have a logistical and legal mess (especially if the buyer doesn’t immediately move out). Second, the seller will usually have to have additional insurance coverage for a tenant that they probably don’t have on their existing policy. That would have to be checked out and or arranged that day as well.
Just change that closing day to Wednesday or Thursday and you’ll have smoother sailing.