Mistakes that delay closings. They can bring nightmares at the mere thought. Buying a home can be one of the most heart-wrenching and nauseating adventures of your life. But once closing is scheduled, people think, “That’s it, right?” The stomach-in-your-throat feeling should go away and all is smooth sailing. Right?
Well, not always. There are many reasons closings may get delayed. Don’t let this list scare you. However, it’s a great bit of knowledge to tuck away just in case. Try to remember that sometimes delayed closings do actually happen.
Repairs Were Delayed
These days with short labor and uncertain supply chains, repair delays are frequent. It happens in ideal times, too. Maybe it happens because a part didn’t come in. Or perhaps no one was available to do the repair.
Sometimes you have no choice but to wait to close. And especially if you’re using a loan type that requires the requested repairs be made prior to closing. However as your real estate agent, I can create an addendum to your contract that allows escrow to hold the cost of repairs in the escrow account. This makes sure that they are made on your behalf once the labor and materials are available.
Related: Should I Waive a Home Inspection
Financing Issues
Some homebuyers, especially first-timers, don’t realize that their financial information will be verified again prior to closing. It has to match, more or less, what it was when you applied. So, same job, same amount of money in the bank, same amount of debt, same everything. Usually that’s possible within the narrow window between loan approval and closing.
Unfortunately, sometimes things go wrong. Therefore, if that second verification reveals a new credit line that’s been opened? That can be a problem. Same thing with a change in employment. In these cases, closing will be delayed until those issues can be resolved. Or it may never close at all. Moral of the story? Don’t do anything financially interesting between approval and closing, and all will be well.
Related: How To Sell Your Home For The Most Money
Appraisal Was Too Low
Recently, values have changed over 5% during escrow. Appreciating is fine – depreciating, not so much. It’s not unusual to hear of a closing that’s been delayed due to an issue with the appraisal. Of course, the issue isn’t with the appraisal. More so, it is with the market data no longer supporting the seller’s asking price for their home. The appraisal is just numbers on a page, based on what’s already been sold. A too-low appraisal can delay closing. After all, a second appraisal will be needed to verify that there were no errors in the first appraisal. Or worse, the seller and buyer will have to go back to the table and renegotiate the terms of the contract.
If you have to renegotiate your contract, it’s due to your bank’s unwillingness to loan more than the house will appraise for at that moment. In that case, the contract will need to be reduced to the appraisal price. Sometimes this is possible. However, sometimes it’s not if the seller owes a fair amount on their house or needs the difference to make their next purchase. There’s not a lot you can do if you can’t come to terms.
Related: Choosing the Right Loan
Mistakes That Delay Closings: Your Defense
Yes, it is true a number of mistakes may cause your closing to delay. And there is a defense. Just like an experienced surgeon knows the precautions to take from losing a patient, experienced agents like myself prepare to avoid losing an escrow. Yes, sometimes escrows still cancel. However, with experience comes procedures and habits that help to prevent that. This is part of why I may ask so many questions during our professional relationship. I want to protect your best interests.
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