6 Closing Problems That Can Cause Delays
Buckle up. It’s time to prepare yourself for potential delays that could hang up your ability to close on a house. These problems could happen any time after your offer—even up to and including the day of your closing.
1) Appraisal Problems
It’s possible an official appraisal could be lower than expected. Appraisers use comparable home sales to calculate a home’s value, and in some areas, home prices are rising so fast that those comparable sales haven’t caught up. You may also end up with a low appraisal if the home you’re buying has features that aren’t typical for the neighborhood.
But more often than not, a low appraisal is a warning sign you may be paying more than the home is worth. No matter the cause, your lender can’t approve a loan amount for more than the appraised value of your home. If you do end up with a low appraisal, you have a few options. Be sure to talk with your Real Estate agent for advice.
2) Loan Problems
If you made your offer on your new home before you were preapproved for a loan, your bank will now begin digging into your finances to determine how much they’re willing to lend you. This could go terribly wrong.
Too many buyers fall in love with homes they can’t afford. Lenders will do their best to make your loan work, but how they do it may not always be the best financing options for you - like adjustable-rate mortgages or piggyback loans. Ideally, you need to be preapproved for a mortgage before you begin shopping for homes. That way you know your exact price range, and you won’t make offers on homes you can’t afford. Some real estate agents will not even show homes until you have a pre-approval in hand.
3) Home Inspection Problems
Nearly every home inspection—even those on new homes—will turn up some issues. Some are minor and can either be ignored or resolved by further negotiating the terms of the purchase contract.
However, some issues like insect infestations or water damage are warning signs you can’t ignore. Be sure to have a specialist look at any warning signs you discover - plumber, electrician, ect.
As a result, some of these problems can cause delays in your closing or even cause your offer to be cancelled.
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4) Neighborhood Problems
If the first time you saw your potential home was also the first time you ever visited that neighborhood, be cautious.
Take steps between now and closing to make sure you’re buying a home in a neighborhood you are comfortable in. Closing is final and you need to make sure there are no hidden issues. Drive through on different days at various times of day. Do people seem comfortable visiting together outside their homes? Are kids running around? Is there construction nearby?
New shopping areas and expanding neighborhoods are signs of a healthy community. Go online and research the nearby schools and make sure this is a place you’ll want to stay long term. A great deal on a home isn’t worth it if the neighborhood is not where you want to be.
5)Walkthrough Problems
Imagine if—during the final walkthrough—you find something that’s been damaged or you notice the seller removed something that was supposed to stay. The process to resolve these issues could delay your closing date.
6)Paperwork Problems
On closing day, you’ll sign your way through 50–100 pages of paperwork. (Yes, you read that right.) After weeks of waiting, you may be tempted to breeze through all the confusing legal jargon just to be done. But this is no time for a race to the finish. Read each page thoroughly, and don’t be afraid to ask questions if something doesn’t add up.