Closing on a mobile home park can be a very stressful experience. Making it go smoothly requires proactive preparation and strategy. So what are some concepts to improve your closing experience?
Try to close in the middle of the month
It’s only fair that the seller be responsible for collecting the rent in the month you purchase the property as you have no time to notify the residents of where or how to pay it, and there’s a general confusion among residents over the transfer. If you close at the start of the month, the seller not give you any credit for the upcoming rent collection, and the responsibility is entirely on your shoulders. If you close in the middle of the month, however, they were responsible to collect the rent for the month and then credit you back ½. It also gives you two weeks to notify the residents of the ownership change and educate them on where and how to pay. Sure, it’s harder to come up with the prorations, but it’s a more sensible plan in many cases.
Exclusively use large title companies
It has been our experience that smoother closings occur in proportion with the size of the title company. Shoot for using the largest, such as Chicago Title and First American. A good title company is the referee of the transaction, and also the organizer and mediator. Big title companies have many people with various specialized talents, including in-house lawyers, all of which are available if needed (kind of like a giant hospital with many different specialists). Big title companies also typically offer better customer relations and professionalism.
Close separately from the seller
Although many closings have the buyer and seller together in the same room, that’s not always the best plan nor is it a necessity. It is possible to have the buyer and seller close separately, which may offer a smoother option. If you have a seller who is prone to being moody or tough to handle, it might make sense to close separately so nothing strange happens when it comes time for them to sign the agreements. It’s not fiction that some closings have ended poorly with arguments and histrionics from a seller who suddenly has “seller’s remorse” and you should insulate yourself from such situations.
Eliminate any surprises
The best way to have a smooth closing is through careful preparation. The last thing you need are last minute cliffhangers of documents you need but aren’t handy. I remember a closing in which the seller turned off the water the day of closing because he did not want to be liable for the bill and I had to jump in my car and race to the utility company before they closed to put up the deposit and get the billing transferred – it probably took 5 minutes off my life in tension and was totally unnecessary.
Hit the ground running
Most happy closings are really remembered that way because of a smooth transition from seller to new owner after closing. Make a complete list of everything that you need to do post-closing and then follow that list aggressively. A good closing includes notification of the ownership change to residents with greetings and information on management contacts and where to pay rent, an announcement of new manager (if any), seamless rent collection, and a smooth start.
It’s always a happy moment when your purchase starts off smooth – it tends to carry over into the entire future of the property. These tips will help you start off on the right foot.