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What Effect Your Closing Process?


Under Real Estate

Written by

March 29th, 2022

Real estate (like most industries) has its own unique sales processes and buying cycles. Having a clearly defined process is vital for your real estate business. The closing process aims to protect both the buyer and seller. Specific steps need to take place within agreed time frames by each party.

A day later than expected can lead to expenses being incurred by either party, as well as an increase in overall frustration. Despite your best efforts, the closing process may drag on for some time.

Here are six reasons that might happen and how you can avoid them :

1. Title Issues

Titles are a big part of closing. They prove who owns the property and serve as the legal documents establishing ownership. Sometimes, title searches can turn up errors or problems with the records that need to be worked out before continuing the closing process.

The title search helps ensure there are no liens on the property or any other outstanding claims against it that could complicate your purchase or ownership later on. If the title company finds something, it will take time to sort out what is going on before proceeding with your purchase.

2. There Are Complications with the House

If you sell an older home that has not undergone substantial renovations in many years, it might not pass inspection on the first try. You might be required to fix many problems to get your home listed in good condition.
The process can frustrate you if you are unaware of these issues when you put your house on the market. However, there is nothing you can do about it except correct them and make sure that no more surprises are waiting for you at closing time.

3. The Buyer is not Pre-approved for a Mortgage Loan

A buyer who has not applied for a mortgage loan can cause delays in closing since it may take longer to get approved, or the Buyer might not qualify at all. The final approval depends on an appraisal of the home, verification of employment and income, check of debt-to-income ratio, and credit history.

Some buyers think they’re ready to buy a house when they aren’t ready. If that’s the case, you’ll need to find another buyer within your contract time frame. A process that may take time if your contract stipulates that only a certain percentage of buyers qualify for your house.

4. The Home Appraisal Takes Longer than Expected

Most lenders require an appraisal before funding a mortgage loan, and sometimes the appraiser cannot get inside of a property or gets delayed, which can delay this portion of the process. However, as long as everything else is progressing smoothly with no other significant delays, this should not cause any issues with closing on time (unless it’s going on several weeks).

5. The Home Inspector Found Major Problems that Need to be Fixed Before Closing

These situations can cause delays for several reasons: First, if the seller refuses to fix the problem, the Buyer may walk away from the deal because he feels like he needs more time to think about it and may have concerns about future issues down the road. Second, if the seller agrees to fix the problem, you need to coordinate with all parties involved to get it done on time and make sure it was appropriately done and set before closing takes place.

6. The Buyer’s Bank Has Requested Additional Paperwork or Has Become Slow to Approve the Loan

Your Buyer might have been pre-approved for their loan, but that doesn’t mean they’re guaranteed to get approved. If the bank requires additional information from your buyer, it can delay the closing timeline.

The same goes for delays from the bank in approving the loan itself. The bank might be cautious or slow to get back to your buyer (or their agent); either way, this will determine how long to close after conditional approval.

The more streamlined and straightforward you can keep your closing process, the more likely you will close a deal. The confusion between you and your real estate attorney during closings causes delays, which is why having a set script and closing order is so important. Once the process streamlines, you will see closing times decrease and efficiency increase.

6 Reasons Your Closing Process is Taking A While by Sheryl Wright

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