Don’t go to closing before doing this, or you may really regret it!

05-08-2022

There is one thing most people don’t do, which can cost you dearly, before you sit down to sign the closing document. Learn from my bad experience.

Introduction

You had the house inspected. Check. You calculated how much you’ll need for repairs. Check. You get all your paperwork from the title company and the mortgage company. Check. All ready to sign the closing papers? Wrong!

What else is left to do? You should inspect the house one more time immediately before you go to closing.

what happened to me

In July 2008, I made an offer on an investment home that I thought would make a good rental property. I negotiated a deal with the seller where she would pay part of the closing costs. I hired a capable home inspector who wrote a good report on the property. Closing was delayed a week because the lender asked me for more documentation. During that week, I did not enter the house again, although I did make a few rounds to keep an eye on it.

After signing the papers on July 18, I immediately went to the house to start some repair work. Upon opening the door, I was overwhelmed by a strong musty/moldy smell. The carpet was wet and I heard the splash as I crossed the living room to the bathroom. I saw that the hot water was leaking and had flooded the house.

Leaky water heater creates a greenhouse environment

What was worse, with the windows and doors closed, the hot water had created a humid greenhouse environment that was perfect for mold growth. And when I looked around I could see mold on almost every wall from top to bottom.

After a futile effort trying to clean up the mess, I called the agent who represented me and the seller. She came to the house and immediately contacted the title company and the lender to stop the deal. I was lucky that the closing took place on Friday afternoon because the paperwork would not be submitted until Monday morning. The deal was stopped and I got all my security money and down payment back, except for the cost of the home appraisal and inspection.

A hard lesson learned

If you had done the final inspection before going to closing, you could have saved a lot of time and effort.

I have been through many closures and never did a final tour before closing. But from now on, I will never stop doing it.

As an epilogue, when I went on vacation to Mexico after this episode ended, I made it a point to turn off the gas and water to the water heater in my personal residence.

I think I’ve learned my lesson.

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