Posted on: 27 March 2016Share
After viewing multiple homes, you have found the home that is perfect for you. Once the seller accepts your offer on the home, you still have to close on the property. Unfortunately, home closings can be delayed, causing you to have to wait even longer to move into your new home. It is important to understand why home closings are delayed and what you can do about it.
1. The home appraisal is too low.
If the home does not appraise for the amount required by your mortgage company, you may be unable to secure your financing.
The first step to take is to make sure the appraisal is valid. Appraisers make mistakes; if your realtor thinks the appraisal sounds inappropriately low, check to make sure that it includes all recent comps (comparable homes that have sold).
If it looks like the appraisal is valid, the deal is not lost, as there are still a couple options. The first option is for the seller to lower the price of the home; he or she is going to have a difficult time selling a home for more than its appraisal value.
Another alternative is for you to make a larger down payment on the property. This reduces the amount the bank needs to lend so that the mortgage can be approved.
2. The home inspection reveals problems with the home.
As a buyer, it is essential that you have the home inspected. Some mortgage financing options, such as the FHA mortgage, even require an inspection.
Once you have an accurate idea about the condition of a home, you can negotiate with the seller to make some of the repairs or give an allowance for you to complete the repairs.
If the seller does not want to complete the repairs, consider the overall value and age of the home. Determine whether the repair is a sign of a larger problem with the home or if it is simply routine maintenance. For example, an asphalt roof needs to be replaced every 20 years. It may be worth it to go ahead and pay for the roof yourself if you believe the home is otherwise a terrific value.
3. The documents for the home closing are delayed.
A number of reasons, such as financing problems, title issues, or one of the entities involved in the deal falling behind on their work, can delay the closing documents. To prevent documents from being delayed, be honest when applying for the mortgage and promptly provide all requested documentation.
If closing is delayed, make sure the party delaying the closing now has what it needs. In cases where the delay interferes with the buyer or seller's schedule, the buyer or seller may be able to have a power of attorney sign the closing documents. Sellers and buyers should check with the title company and lender to make sure all regulations are followed when using a power of attorney to close the transaction.
Though it feels like a delay in closing on your home is the worst experience in the world, you can take solace in knowing that you have the knowledge to handle unexpected delays. Contact a real estate attorney like Byron Huffman, PC for more information.