Follow-Up: The Key To Successful Closings
by Dallas Appraiser L.L.C. on 05/27/14
Title:
Follow-Up: The Key To Successful Closings
Word Count:
711
Summary:
Have all of your deals close easily and on time by conducting the proper follow up. Learn the steps and the tricks to following up to ensure that you always get to the closing table and receive your check.
Keywords:
Real Estate Investing, No Money down, investment property, investment opportunity, carlton sheets, short sale, reo, wholesaling, renting, lease options, for sale buy owner, fsbo, private money, real estate financing, estate sale, fire sale, bird dog
Article Body:
If everyone always did everything they said they would do, we would all be a lot richer. First off, I must admit that in the real estate world; sometimes we are so busy that we forget to make a call or deliver a piece of information. We are human! Unfortunately, sometimes tasks are overlooked, and occasionally the ball is even dropped. If you want to have successful closings, you must have strong “follow-up” skills to catch problems early in the process. Follow-up on everyone and everything.
I can not begin to tell you the number of closings that almost fell apart, or would have fallen apart had I not kept a watchful eye on the entire process to make sure that everything was completed when it needed to be. Here is a typical scenario: you are wholesaling a house and you have just 30 days to get it closed before the contract with the Seller expires. You find a buyer who can get a loan and close before the expiration. Then a few days before closing you find out that the loan is not ready and closing must be delayed two weeks. But the Seller already has another Buyer ready to pay more than your price, so they refuse to extend your contract. You just lost the deal.
So what is follow-up? I used to think it meant staying in touch with the buyer to make sure that everything was completed for the loan. Then I learned that the buyer is often a newbie and clueless of what needs to be done. Mortgage brokers just usually respond Everything looks great until they can not close the loan. So the real trick to following-up is to speak to the final decision maker for each step. This works whether you are selling a retail house or a wholesale house, or even if you are the buyer/borrower. The goal is to close without delays.
Assuming that you have already received a pre-qualification letter from the lender, and ensured that the lender will loan on the deal (i.e. no issues with title seasoning, assignment fees, habitability of the property), the first step is to follow-up with the broker/lender that all of the application paperwork was submitted, and have they forwarded it to the lender? If not, what is still required? Determine if the lender requires a termite letter, appraisal, and a survey (most lenders do). If so, have they all been ordered? When is each to be completed? Keep following-up until you verify that each has been delivered. You also want to verify that the appraisal was sufficient for the loan.
If I do not already own the house, I order a title report as soon as I go under contract with the Seller to discover any defects early in the process, and begin resolving them. Closing attorneys usually do not order the title report until just before closing to receive as current information as possible. But if they find problems, it could delay your closing. It is well worth the $125 to run title ahead of time, and eliminate delays.
Once the broker has forwarded the paperwork to the lender, the next step is to verify the loan has gone to underwriting. If not, what is the delay? If so, was the loan approved? Do any conditions need to be met? What are they and who is handling them? Make sure that once the conditions are met, the loan is returned to underwriting and approved.
Verify that the closing has been scheduled with the attorney, and that they have cleared title. Find out if and when the loan package will be forwarded to the attorney. Then remind all of the players of the date and time of closing, to bring a picture ID to closing, and to bring any funds required in a certified check.
This seems like a lot of work that should be handled by other people, but the reality is that often times something is overlooked. Through your diligent follow-up efforts, problems will be detected early and corrected, allowing your closing to occur flawlessly and on schedule.
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