The home closing process is the final step in buying or selling a house, but it’s also where costly mistakes can happen. From overlooked paperwork to last-minute financial surprises, home closing mistakes can lead to delays, added expenses, or even a failed transaction. Whether you’re a buyer eager to settle into your new home or a seller looking to finalize your sale smoothly, avoiding these common pitfalls is essential. In this guide, we’ll walk you through the most frequent closing mistakes and how to prevent them, ensuring a seamless and stress-free experience.
Common Home Closing Mistakes Buyers Should Avoid
1. Not Reviewing Closing Documents in Advance
Many buyers wait until the closing day to look at the mountain of paperwork for the first time. This can lead to confusion, delays, or even signing something you don’t fully understand.
How to Avoid It:
- Request closing documents at least three days before your closing date.
- Review the Closing Disclosure carefully to ensure all costs and loan terms match what you agreed to.
- Ask your real estate agent or lender about anything that seems unclear.
2. Ignoring Last-Minute Credit Changes
Lenders often check your credit one last time before closing. A sudden dip in your credit score—caused by taking out new credit or missing a bill—can put your mortgage at risk.
How to Avoid It:
- Avoid making large purchases (like a car or furniture) before closing.
- Keep credit card balances low and make all payments on time.
- Hold off on opening new credit accounts until after your home purchase is finalized.
3. Skipping the Final Walkthrough
A final walkthrough ensures the property is in the agreed-upon condition. Skipping this step could leave you responsible for unexpected repairs.
How to Avoid It:
- Schedule a walkthrough 24–48 hours before closing.
- Check that agreed-upon repairs were completed and that the home is in the condition expected.
- Test major appliances, plumbing, electrical systems, and HVAC.
4. Not Having Enough Cash for Closing Costs
Some buyers focus so much on their down payment that they overlook additional closing costs, which typically range from 2%–5% of the home’s purchase price.
How to Avoid It:
- Get an estimate of your closing costs early in the process.
- Set aside extra cash to cover unexpected fees or adjustments.
- Ask about seller concessions, lender credits, or assistance programs that may help reduce costs.
5. Failing to Secure Homeowners Insurance in Time
Lenders require proof of homeowners insurance before closing, and delaying this step can push back your closing date.
How to Avoid It:
- Shop for homeowners insurance as soon as your offer is accepted.
- Provide your lender with proof of insurance well before closing.
- Compare policies to ensure you get the best coverage at the best rate.
Common Home Closing Mistakes Sellers Should Avoid
1. Overlooking Repairs and Agreed-Upon Fixes
If you agreed to make repairs based on the buyer’s inspection, failing to complete them before closing can cause delays or even cancel the sale.
How to Avoid It:
- Hire professionals to complete agreed-upon repairs on time.
- Keep all receipts and proof of work to provide to the buyer.
- Do a final check to ensure all fixes are completed before the walkthrough.
2. Misjudging Your Home’s Closing Costs
Sellers often focus on the sale price without considering their closing costs, which can include agent commissions, title fees, and potential concessions to the buyer.
How to Avoid It:
- Work with your agent to estimate seller closing costs upfront.
- Factor in commissions, title insurance, escrow fees, and any repair credits.
- Be prepared to negotiate if the buyer asks for additional concessions.
3. Moving Out Too Late (or Too Soon!)
Timing your move is tricky. Leaving too soon can cause issues if the deal falls through, while staying too long can cause delays in handing over possession to the buyer.
How to Avoid It:
- Work with your agent to coordinate move-out timing.
- Have a contingency plan in case of last-minute delays.
- If needed, negotiate a rent-back agreement if you need extra time in the home post-closing.
4. Ignoring Contingency Timelines
Buyers often have contingencies—such as financing or home inspections—that must be met before closing. Ignoring these deadlines can cause last-minute issues.
How to Avoid It:
- Stay in close communication with your real estate agent and transaction coordinator.
- Track all contingency dates and be proactive in resolving any issues.
- Be flexible and responsive if the buyer needs additional documentation or accommodations.
5. Failing to Disclose Property Issues
Hiding known issues with your home can lead to legal trouble and potential lawsuits post-sale.
How to Avoid It:
- Be honest in your property disclosures.
- Fix minor issues before listing the home.
- If major problems exist, discuss repair or pricing strategies with your agent.
Bonus: Navigating Closing When Buying and Selling Simultaneously
If you’re selling a home and buying a new one at the same time, you face an extra layer of complexity. One of the biggest risks is mistiming the transactions, leaving you without a place to live or stuck with two mortgages.
How to Avoid It:
- Consider a contingent offer, allowing you to buy only if your current home sells.
- Use bridge financing if you need funds to purchase before selling.
- Explore temporary housing options in case of a gap between closings.
- Work with an experienced agent who specializes in simultaneous transactions.
Final Thoughts on Avoiding Home Closing Mistakes
Whether you’re a first-time buyer or an experienced seller, avoiding home closing mistakes can save you stress and money. By planning ahead, staying organized, and working with a knowledgeable real estate agent, you can navigate the process smoothly and confidently.
Looking to buy and sell a home at the same time? Let’s connect—I’ll help you time your transactions perfectly to make your move as seamless as possible.
