Just because your home is sold firm does not mean you are in the clear. There are a few things that can come up the day of closing that can cause you a big headache or even worse your home doesn’t close. Here are some common closing issues:
Common Closing Issues
Problem: Appliances not working.
Most agreement will have that the chattel and fixtures have to be in good working order on the day of closing. If at the walkthrough they find an appliance is not working the buyer’s lawyer could hold back the cost of a new appliance.
How to Avoid This: Before moving out check that all appliances are working. If not, you get them serviced. If at the time of listing, you know the appliance is not working properly and you don’t plan on repairing it specify in the agreement to purchase the item is “as is”.
You can avoid many closing issues by visiting the home before taking possession. Learn more in What Is the Importance of a Final Walkthrough?
Problem: Tenants refuse to leave.
Even if the offer doesn’t say anything about the tenant, it is in the standard pre-printed clauses that the home will be vacant. The consequences of a tenant not leaving could be a delayed closing or the buyer walking away from the deal.
How to Avoid This: If your tenant is on a lease that goes past the closing date, make sure in the agreement of purchase it specifies they are willing to assume the tenant. If the tenant is not on a lease and the new owners wants it vacant the tenant must be given 60 days notice from the 1st of the month.
Need more advice on how to deal with tenants? Check out our post Negotiating With Tenants as a Guelph Real Estate Investor.
Problem: House is dirty or belonging are left behind.
This is one of the most common closing issues. The consequence of this could be a delayed closing or they could hold back around $500 for the cost of disposal of the items and/or cleaning the home.
How to Avoid This: When you sell your home all belongings that are not included in the agreement and are not fastened to the property should be removed. The home should be in broom swept and counter, cupboards and appliance cleaned. Grass should be cut or snow removed.
Do you want to know more about buying Guelph real estate? The posts below might help:
- Should You Look At Listings In A Termite Zone?
- The Ultimate Guide for First-Time Buyers in Guelph
- Home Buying Myths Busted: What Really Saves You Money
Problem: Obligations agreed upon in offer are not done.
If you have agreed to do repairs and to provide documentation of those repairs and you do not fulfill this obligation the deal could be delayed or money could be held back at closing. Normally, they will hold back an amount of money at the higher end of estimated cost of the repair. For example, if you have an older furnace and it was to be cleaned, inspected and said it was it good working order. The lawyer may hold back the cost of a new furnace.
How to Avoid This: Make sure you do complete all the obligation in the contract. Do these well ahead of the deadline in case it is difficult to get a trade or a part has to be order. Take copies of the invoices/documents and give them to your lawyer and realtor.
Problem: The house closed and the owner is not out of the home yet.
Once the home is closed technically you are trespassing and have do not right to be on the property.
How to Avoid This: The best way to avoid this is to move out before the day of closing. No one can tell you when your home will close. It could be anywhere between 9am or 5pm. If you can’t do bridge financing, then try to arrange to move out the day before closing and keep your truck pack up to move in your new place the following day. Moving out a couple of days in advance is always the less stressful option. It will give you time to go check and make sure you got everything out and to clean the home. If the budget permits having cleaner come in and clean once you are out of the house is really nice because after all you probably have a lot of unpacking to do in your new home.
What happens if the closing is delayed? If it is delayed because of something that was deemed your fault it could be quite costly for you. You may end up having to pay for the buyers to stay in a hotel, for their extra moving and lawyer cost, etc. Long story short, it is best to fulfill all your obligations and make sure your home is looking its best to ensure everything goes smoothly.
Do you have questions about these common closing issues or anything else related to buying a home? Contact our Guelph real estate agents today at info@gowylde.ca or call 519-826-7109.
