Closing Delayed

It takes a ton of people to actually buy or sell a property.  There are the obvious (buyer and seller, real estate agents, etc) and the not too surprising (title insurance personnel who actually manage the closing docs) but there are a bunch of others you may not consider, and it is worth keeping them in mind.

First of all are the local tax authorities, especially if you live in a state with a property tax.  The buyer and seller each pay a portion of the property tax, for the portion of the fiscal year when the property was owned by each party.  Of course, only one person actually pays the tax, so the other party reimburses for the amount owed.

This usually works out fine, but if you manage to close near a tax due date, things get weirder.  The title company needs to contact the taxing agency and find out how much the tax is and whether it has been paid.   When buying or selling you really need to look over the HUD very carefully and double check everything.  Make sure you understand each line item. Once when we bought a property 2 days after the new fiscal year started, the title company inadvertently tried to get us to reimburse the seller for almost a year of property tax because they assumed the tax had been paid (it wasn't).  Most recently, we were charged with a reimbursement of tax, which turned out to be legitimate, but the title company assumed the tax wasn't paid, and was going to make the seller pay it at closing.  Something like this can hold up the whole process and the last thing you want to do is wire money for a closing and then get stuck at the table when someone notices an error.

Another factor to consider, and this is what just delayed our most recent closing is the home owners association, if you are buying a condo or townhouse (or any other property that has an HOA).  A lot of these properties have special assessments which must be paid at closing by the buyer or the seller.  In this case, the HOA has an assessment but we don't know the details. The title insurance company has been all over the HOA (really the management company that does the processing for the HOA) and even paid an extra fee for expedited service.  Unfortunately the HOA did not respond in a timely manner and the closing is now delayed two days. This means the HUD will need to be redone (for the taxes) and we are up against a wall in terms of our contract with the seller.  Keeping our fingers crossed for closing on Wed.