The entire home buying process entails a lot of time and decision making. When it comes down to the real estate closing, it can almost seem like everything is finally in the clear.
Unfortunately, as with most things, not all closings go perfectly, and some could have delays that might put buyers on edge!
Below are some of the more common delays expected during the closing process and how they can be remedied.
A real estate closing is the process of a buyer taking ownership of a property from a seller. It often involves a number of different people such as attorneys, real estate agents, lender representative, closing agents and title company representative. A great deal of paperwork will be signed, and money will be transferred. To say the least, it is not a quick process!
In many cases a mortgage is not fully approved until right up to the very day of closing. For this reason, a closing may be delayed simply because the lender requires additional information. In situations like this, it is best for the buyer to communicate clearly with the lender to ensure they know exactly what is needed for the day of closing.
Lenders, as mentioned above, will be finalizing the mortgage until the last moment and credit checks are an area that they can re-evaluate. It is advised not to make any large purchases during the home buying process that could affect your debt to income ratio or savings and checking totals.
Even if it appears all is finalized with your mortgage, keep purchases at bay until the closing is finalized! You want your credit to look as it appeared in the earlier stages during the pre-approval.
Closing Date Chaos
When the period between when an offer is signed by both parties and the closing date is too small, it is almost certain a delay will occur. The closing date is determined when the buyer submits an offer, and negotiations are made with the seller. There are a number of things to take into consideration in order to keep this date intact.
Mortgage processes, home inspections and contingencies can all be timely and have to occur before closing. Making sure there is plenty of time to accomplish these items is key to preventing a delay. Real estate agents and lenders can help advise buyers and sellers to agree on a more realistic closing date..
A buyer must come to closing with either a cashiers check or a wire transfer of money to officially purchase the property from the seller. It is very important that buyers know not only the exact amount needed for closing costs but also how long it will take to get the payment.
Different banks may have different procedures in wiring money and the length of time may vary as well. Waiting until a few days before closing to secure the money may not be enough time. Reaching out to the bank and finding out these details in advance can help avoid this situation.
Part of the home buying process is getting a home appraisal. If the home appraisal comes back at a lower than the agreed upon price, a delay can and will occur. Unfortunately when this occurs, somehow the difference from the appraised amount and the selling amount must be made up by either the seller or buyer.
As a buyer, to prevent this it is important you work with a reputable real estate agent who can help advise you on offering a fair price on a home. Buyers can also request that lenders use more local and knowledgeable appraisers. This helps to ensure a more accurate appraisal is given. Another tip is to try and be there for the appraisal and inform the appraiser of any short sales or foreclosures that may affect the price of comparable homes sold in the area.
A home inspection is important for every home buyer to ensure the home they are purchasing is up to par and in sound condition. Once the inspection report comes back, the buyer can then request that the repairs be made or in some cases a seller concession may be offered. Getting the home inspected as soon as possible and communicating with the seller on the repairs regularly will help to prevent unexpected closing delays. It is better to know a week before closing that a repair is taking longer to accomplish than the day before!