Top Items That Can Delay a Closing
There are several reason’s why a closing may not occur on time, or even at all. Here are some of the main obstacles that may delay your deal:
1. The mortgage approval process.Even though you may be preapproved by a lender, you will still need to provide additional documentation to satisfy today’s underwriters. Most importantly, be advised that you will be asked to document where the funds for the down payment and closing costs came from. For example, it will not be enough to produce a cashier’s check or wire for the amount of cash necessary to close. You must verify the source of the funds in writing for the lender.
2. The title. Lenders not only examine the buyer’s financial wherewithal before they approve a mortgage, they also will look at the preliminary title and appraisal reports for the property. Sellers should have a look at the title report on their property before they put their home on the market to make sure there aren’t any irregularities. If there are, they will have the chance to clear these up before the home is listed for sale. Your real estate agent or attorney can help you find a title company who can produce a report for you.
3. Appraisals. Appraisals have not only delayed closings in recent years, but they have caused some transactions to fail altogether when the appraisal came in lower than the agreed upon contract price. If the buyers need to switch to a different lender whose appraiser might have a different opinion of the value of the property, this will take time and can delay closing. On the other hand, it is also very possible that an appraisal could come in so far below the agreed upon price that the seller might not be in a position to close the sale. For example, if the property is listed for $300,000 and the sellers owe $280,000, they could have a problem if the property appraised for $280,000 or less.
Do you have additional questions about the closing process, title, or appraisals? Feel free to ask us anytime! firstname.lastname@example.org
Team Annett Office