Buying or selling a home is generally a multi-week process, if not an endeavor that lasts for several months. Buyers often think of the search and offer negotiation process as the longest and most challenging aspects of buying a home, while sellers may have to carefully review multiple offers and possibly wait until they receive one that aligns with their expectations.
Once there is an agreement and a closing scheduled, people may assume that the transaction will proceed without any challenges. However, that often proves to be an unrealistic expectation, as many things can go wrong between when the seller accepts a buyer’s offer and when everyone actually signs the paperwork. These are some of the most common issues that arise and end up delaying or even canceling a closing scheduled for a real estate transaction.
The purchase process involves the paperwork necessary to legally transfer the title from one owner to another. However, before that can happen, there needs to be a review of the title record for the property. Some people don’t know when they list their property that there is a lien or an old owner on the record that will cause challenges during the closing and may complicate the process of getting a title insurance policy.
Buyers may have offered more for the property than the appraiser believes it is worth, a mistake that could lead to issues with financing. Buyers could also lose jobs or spend too much using other forms of credit, making it difficult or impossible for them to finalize a mortgage. Even when someone has a pre-approval letter, it is still very possible for something to go wrong before closing and for the transaction to fall apart.
Sellers generally need to openly disclose any known problems with a property, but not all of them will do so as they should. There are also cases in which a seller doesn’t have the ability to spot defects with the property, which can be of particular concern when a seller lists the property on their own without a licensed agent representing them. Undisclosed defects can drastically alter what the property is worth and affect either the financing or the buyer’s willingness to move forward with the purchase.
Learning about and preparing for the challenges that could delay or ultimately cancel a real estate closing will help people know what to expect on their path to homeownership or the sale of their property.