The Worst Days to Close Your Home Purchase: Avoid Stress and Plan Ahead!By Kormans LLP
The scenario: you are sitting with your realtor. You are about to sign your name to purchase your home! It could be your 1st home, 2nd home, or even your 10th place of residence. You have made the majority of your decisions with your home – you have picked the property, the price you want to offer, and other considerations including any conditions. One final one: The Closing Date! When should your purchase close?
If anyone besides your lawyer is telling you that the Closing Date doesn’t matter – they are not doing you any favours! If you want to reduce your potential stress and have a smoother closing process, then consider what date your home purchase closes.
Here is a sample of the 9 WORST dates to close your home purchase, in order of potential nightmares and issues:
1. In less than 30 days from the date of your offer
Are you planning to obtain a mortgage to pay for your home purchase? Most people do. Lenders get busy. Mortgages take time to process. If you rush your closing, your mortgage may not be processed and ready to fund on the closing date! Plus, you should give yourself time to prepare your down payment, set up home insurance, utilities, hire movers etc. Everything takes time and most closings are approximately 60 days from the offer date for a reason!
2. The same day that your sale closes
Planning to save a few dollars by avoiding bridge financing and closing your purchase and sale on the same day? Guess what – the buyer for your sale property is likely getting a mortgage. What if their mortgage monies come late? What if your sale transaction has to extend – you may then be in default to close your purchase! Bridge financing was invented for a reason! Does the thought of having your possessions on a moving truck with no house to put them in sound enticing?
Close your purchase, clean up the property, get any renovations done and then move at your own pace. Don’t rush and try to do two things at once. It is far too risky!
3. The last day of the month (30th, 31st, or last business day of the month)
Go visit a bank on the last day of the month. Check out the lineups at the tellers. Now imagine how many lenders are funding mortgage transactions on that same day. The end of the month is a very busy time for everyone: banks, lawyers, movers etc. They are all swamped. Close your deal when there isn’t such a high volume of transactions. It will likely mean a quicker closing simply because you are not closing at the same time as so many other transactions!
4. The first day of the month (1st or first business day of the month)
See point 3. Similar circumstances to the beginning of the month.
5. The 15th of the month
See points 3 and 4. The middle of the month can be just as bad as the start or end of the month!
6. Right before or after a statutory holiday
Funny thing when banks and offices shut down. The day before and after the holiday can have the work multiplied because people are trying to make up for the lost day. Don’t have your transaction part of that rat race!
Take a drive on the 400, 401, 404 and any major road/highway on a Friday from 3pm and on. Guess what you will find? Cars and lots of them. Guess who can be in that car? The lawyer for the law office representing your seller. Perhaps it’s someone from the bank. Many offices and institutions try to close early on Fridays so that people can start their weekends, including cottage season. Let’s not have your deal scheduled on a Friday where people have to be located late in the day.
Do you know what your lawyer is doing between 9am and 11am most Monday mornings? Their law clerks? Answering the countless emails and phone calls from people that had to get information and questions over to them first thing after a weekend.
9. When you are away on vacation
I can’t believe how often a client will tell me: I will be away on vacation during the last week of my home purchase. Is that a problem? With remote signing and wiring of funds, that issue is not as bad. But issues can arise where if you do not have an internet connection, a computer, scanner, and printer – you could be delaying your closing. Your home purchase is a big deal! Stay in town until it closes – or schedule your closing date to be AFTER you are back from vacation. Make your life simpler!
So, when should you close your home purchase? How about the 2nd or 3rd week of the month – sometime between Tuesday and Thursday. You will have an easier time finding movers, your lender will not have as many closings to fund your mortgage likely, and your closing life will likely be that much easier.
Congratulations on your home purchase and remember these tips before picking your next Closing Date 😊!
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