Buying a house can feel like a constant string of unrelenting concerns. When your closing has finally been scheduled, it’s tempting to relax and start celebrating. But, before you get too cozy, keep in mind that there are many things that can disrupt the process.
A National Association of REALTORS® (NAR) Confidence Index survey shows that 73 percent of home purchase contracts are settled on time. Of those that aren’t, 23 percent are delayed but go on to close. A small minority, 4 percent, of contracts end up being terminated.
Some of the most common problems include the following.
Mortgage Financing Falls Through
The mortgage application process puts the borrower’s finances under a microscope, but it’s not uncommon for financing to fall through after the initial acceptance from a lender. If something comes up during the underwriting process, the lender can back out of the deal. This process happens right before closing and they check everything. The biggest mistake buyer’s make is financing something–a new car, new appliances, or anything else, which can cause the lender to reject the mortgage.
The Inspection Uncovers a Serious Flaw
Having a professional comprehensively inspect the home to make sure no major problems are apparent is essential. No house is going to be in perfect shape, but if the inspector flags anything that could be a costly situation down the road, that can throw a wrench into the process. Closing delays can happen if the buyer and seller can’t come to an agreement on how to deal with problems revealed by the inspection.
Before you can buy a home, your lender will require an appraiser to assess the property and determine the home’s actual worth, independent of its list price. If the appraisal comes back low, the bank will only agree to provide a mortgage based on the appraised value, leaving the homebuyer to come up with the difference.
An Issue with the Title
Prior to closing, a title search on the home you’re buying is required to ensure the title is clear of any other parties having some sort of claim to the home. If any problems are uncovered, such as debts, taxes or liens attached to the property, it could prevent the closing from happening.
You Can’t Get Insurance
Insurance records contain details of previous claims made for a house and if there have been any claims filed on the house you’re trying to purchase, insurance companies might determine the house is too great a risk.
Final Walk Through
Prior to closing, a buyer will typically take one more careful look at the house after the seller has moved out. This final walk-through, usually the day before closing, allows the buyer to confirm that the house meets the conditions agreed upon in the purchase contract. If there are contingencies specified in the contract that haven’t been satisfied, that can put the closing in jeopardy.
A Problem on the Seller’s End
Sometimes with real estate contracts, things go south simply because one party no longer feels good about it. Though uncommon, a buyer or seller could suddenly decide to back out for seemingly no good reason. If you’ve got a seller who’s in the process of buying a new home or building one, they might ask you to change the timeline to accommodate their moving date. A common problem realtor's see on the seller’s side is divorce complications affecting the sale.
There are many issues that can cause your closing to get delayed or withdrawn, and even something small can turn into a lengthy delay. A professional, experienced realtor can help you be prepared for the worst as well as help you weather the storm if an issue does pop up.
The Platinum Group, REALTORS® are hometown experts in the Pikes Peak region. Upholding the highest level of honesty and integrity, the Platinum team cares more about relationships and service than the number of transactions they close.