Real estate transactions aren’t always a walk in the park, but most of the time, buying a house happens without any major issues.
While most home buying processes do have their ups and downs, it’s rare that a true emergency occurs which compromises the entire deal. However, it’s common for issues to occur at the closing table.
When problems come up throughout the escrow process, buyers and sellers have time to work with their agents and come to a compromise that carries the deal to the closing table.
But, when problems happen at closing, buyers and sellers no longer have the luxury of time. It’s not uncommon for issues at closing to nullify or postpone the entire deal due to their unexpected timing.
Buying a House: Four Issues That Can Occur At Closing
While most closings end in success, there are instances where a major mishap happens. Buyers and sellers should be aware of the issues that can negatively affect their deal — or worse, cancel it.
Here are four closing nightmares that can possibly occur at the closing table.
#1. Funding Falling Through
However, it’s possible that a lender approves a borrower for the amount required to purchase a home only to revoke their offer before closing.
There are many reasons why funding may fall through at closing.
Perhaps the buyer made a sudden change to their finances or career that made them ineligible for a mortgage in the amount needed.
In other cases, the buyer may have not managed their budget correctly so they did not have the funds required to pay off all of the items due at closing. Or, the lender may not be ready to issue the mortgage by the closing date.
Whatever the cause, the buyer must have their finances available to them at the scheduled meeting to successfully close on their home.
#2. Missing Deposits
When buying a house, there are many items that need to be paid in order for closing to happen.
In some cases, buyers that are tight on money may have been relying on one payment source to cover closing costs. Perhaps a family member promised to pay off the title company, or the money for various fees was supposed to be included in the budget.
If the money is not available at closing, it won’t be possible to finalize the purchase. All due items need to be paid at closing, so if a tab was left unpaid, the transaction cannot move forward.
#3. Problems with the Final Walkthrough
It’s probable that the most common reason why closings are delayed or canceled is because of the final walkthrough.
When sellers do not maintain their end of the negotiations regarding property updates or renovations due before closing, the purchase cannot move forward. When buyers visit the property before attending the closing meeting, any issues need to be resolved before the home is purchased.
While the final walkthrough is no time to make new requests, the seller must have met their obligations for preparing the property in order to close.
#4. Holding Belongings for “Ransom”
It’s a best practice not to move any items into the new home before closing in case any unexpected issues happen. However, there are some cases where sellers agree to store some of the buyer’s items in the home prior to closing.
In this case, sellers may decide to “hold the furniture for ransom” in case an issue occurs that interferes with closing. For example, the seller may not return the buyer’s belongings until they pay what they owe or fulfill some other request.
While this is unethical on part of the seller, buyers should never risk placing their belongings in the home until it’s legally theirs.
The Best Way to Guarantee a Successful Closing? Hire a Top Agent
Usually, the problems that could occur at closing are the result of something important being overlooked or ignored while buying a house.
The reason why some deals need to be canceled, rather than the closing just being delayed, is because the issue wasn’t worked into the buyer’s overall strategy. If a payment is missing or the financing is rejected, buyers may not be able to recoup the loss and secure the home.
Since closing issues happen when something is overlooked, the best way to guarantee a successful closing is by working with a top agent.
The best agents in your market have experience, giving them the foresight to catch issues before closing and find a possible solution. With a top agent, a potential closing nightmare can be a simple bump in the road.
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