I suggest a short celebration that night and then straight to work the next day. Make sure you have your financing in order. Finalize any of those arrangements that are not already nailed down. Ask your lender to recommend an approved closing company. Also ask for a copy of the lender’s closing checklist. This is routinely given only to the closing company, but that is because of habit, not because of any secrecy. It is good for you to have a copy also, so you can shepherd the closing process through. The checklist usually includes the need to collect a lot of information that either you or the seller already has. Many, many closing delays could be avoided entirely if buyers obtained copies of the closing checklist.
Make appointments for all necessary professionals, home inspector, appraiser, possibly a surveyor. This is also a good time to have any subcontractors and suppliers finalize their prices for you.
Talk to the closing company, and tell them you want owner’s title insurance in the amount of your anticipated sale price. Title insurance covers you in case the seller did not have good title and there are other claimants to your property. Usually, the closing company writes a lender’s policy that protects only the lender. In other words, if you pay $20,000 down, and the bank loans $80,000 for a property, the title insurance company will pay off only
$80,000 if it turns out the IRS really owns the home. You are out of luck on your down payment, unless you also have an owner’s policy.
Some closing companies will explain all of this to you. Some will not. Even with good intentions, though, they will usually advise you to buy title insurance in an amount equal to the loan and your down payment. They do not think about any extra money you might be spending out of your own pocket, plus all the sweat equity you will be putting into the deal. In our prior example, if you completed the renovation of the home, and then the IRS seized it because of a tax lien against the prior owner, how much insurance do you want? Enough to let you break even or enough to equal what you would have sold the house for?
Obtain proof of property and casualty insurance for the closing company. If you are doing any remodeling, you might be required to obtain builder’s risk insurance and a separate liability policy. For minor projects, you might be covered with the standard property owner’s policy. On the other hand, the normal property owner’s policy has outrageously high premiums for vacant houses. If you do not disclose that the house is vacant, you might discover too late that theft and vandalism, for example, are not covered under the circumstances. Find out what is required under the circumstances, bind coverage, and send proof of coverage to the closing company.
Ask your lender for a written estimate of its closing costs. Give it to the closing company, and ask the company to prepare an estimated settlement sheet for you, showing all closing costs and expenses, and also showing how much money you will need to bring to the closing table. Inquire about its policies for that money. In small towns, you can often bring a personal check. Others might require certified funds or a wire transfer of money into the closing company’s account.
Finally, go over your post-closing schedules. Are all repair people lined up? Will utilities be switched into your name without any interruption of service? Your carpenter cannot work without electricity. What about dumpsters and port-a-potties, if required? Have them delivered the day after closing, if needed. Cleaning crews, landscapers, and suppliers with specially ordered materials need to be put on notice. One of my friends confided last week that his flip project will be delayed two months while he waits for windows to be delivered. Do not let this happen to you, just because you forgot to check delivery times.