Top Reasons for Delayed Home Closing

Homeowners and real estate agents get surprised by the complications during a trade. One of the most critical steps in buying a home is closing. Closing is when money changes hands and ownership of homes changes. When you close on a home, it means the home is yours. But, this transition from tenant to homeowner may take some time to mature. There are several reasons for a delayed closing. This article will focus on the top reasons for delayed home closings.

Appraisal Roadblocks

One of the biggest reasons is appraisal roadblocks. Many people think that if their home is worth more than the market price, it will cost them more money to close. But that isn’t always the case. This can be whether the home has been under-appraised or over-appraised in the past. A lender can request an appraisal and see how much the house is worth. 

If they appraised the house low by a few thousand dollars, that’s a problem. It means the borrower is paying too little interest on their loan. Lenders need to know how much they’re getting back on their investment. So, they can calculate how much to get back when they sell the home down the road. If they don’t get enough back in interest, they could lose a significant amount of money. That’s why lenders ensure that they have an open dialogue with the new owners in case of a change. They discuss their needs and ensure that they document and appraise.

Financing Issues

Delayed home closings are a common problem, and delay in financing issues is a culprit. Sometimes, these come up because the buyer and seller have different views on what they agree to. Or, they arranged financing at a specific closing date but couldn’t complete it on time. The best way to avoid financing delays is to find a lender willing to work with you. Even if you’ve checked with the large national banks, you can check with some regional lenders. They specialize in working with first-time homebuyers with less than perfect credit histories. Some of these lenders may offer lower interest rates than the big lenders. If you’re a veteran, you should check out the VA home loan requirements to see if you’re able to apply.

Hold-Ups Due to Home Inspection

Often, buyers will delay closing because they want a complete final inspection. After all, many things can go wrong during the inspection process. It’s a good idea to get inspections scheduled as soon as possible. If you have an agent, she can take care of this for you. But if you’re doing it yourself, know that the sooner you get it done, the less likely it is that you’ll be waiting on a hold-up. Of course, nobody wants to spend time on something they don’t have to do. So, it’s in your best interest to make sure you schedule inspections early.

Title Related Issues

The problem is that home offers can’t close until you resolve title issues. And this takes time, sometimes months or even years. Whatever the delay, title issues are a significant reason for delayed closings. It’s up to your lender to make sure that enough coverage exists on your property. This allows you to transfer it to your new mortgage company. If that doesn’t happen, you will have to postpone while they both work out a deal. Also, some states want the deeds to contain specific clauses. This is usually a nuisance. But, if there are exceptions, the lending institution might not transfer the title. And thus, no closing date will be set. Title defects and other problems with title documents can also cause the delay. This happens when a title search finds something wrong with proof of ownership. The lender can take some time to respond and get it fixed before proceeding with the sale.

Whether you are a home buyer or seller, you should know the top reasons for a delayed home closing. As a buyer, you want to ensure that the appraisal and financing close. You do not want to experience surprises at closing and hoping not to get out of contract. As a seller, you will want to know about any potential issues before the deal has closed. This helps you can the necessary information from your agent.