Why some buyers have to wait for days to move into their new home after closing.

Buyers beware when purchasing a foreclosure. If it has not been explained to you, you need to know this. Do to the ongoing amount of foreclosure sales and many banks inability to process all of the files, the last step is being delayed.

When you buy a foreclosure home you need to be prepared to wait to move in. Depending on which state you are in the closing process can be different. In Minnesota we a table funded state where the funds have to be at closing when all of the paper work is being signed. After a regular residential closing the buyers and sellers shake hands and the seller hands over the keys. With a foreclosure the bank is not there and requires the closer to send over the final HUD-1 for yet another "final" review. Until the bank representative reviews this and signs off on it, the listing agent in most cases is required by the bank to hold on to the keys. This is becoming a problem because some of the banks are taking 3 days to sign off on the HUD-1 and give the okay for the buyers to move in. Which means you have given them the money, you are paying interest on your loan but can't quite move in yet.

One way to avoid this disappointment is to go in to the transaction knowing you may have to wait to move in. The best approach is to close early in the week and no where near the last few days of the month or worse yet, close to a holiday. You have to keep in mind that the person signing off on the HUD-1 could have hundreds of files that they are in charge of. The homes could be all over the country and many closing on the same day. You can also ask your agent to check with the listing agent and request that the final HUD-1 be at the bank for review no less than 72 hours before closing. If they see it early and then get the same information from closing they are less likely to flag any items. This will lead to a much smoother closing.

As always please consult a real estate attorney with any legal questions you may have and your accountant for any tax questions.

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