The entire home buying process entails a lot of time and decision making, which is why we have Real Estate agents! When it comes down to the real estate closing, it can almost seem like everything is finally in the clear. Unfortunately, as with most things, not all closings go perfectly and could have delays that might put buyers on edge. Below are some of the more common delays expected during the closing process and how they can be remedied by agents.
In many cases a mortgage is not fully approved until right up to the very day of closing. For this reason, a closing may be delayed simply because the lender requires additional information. In situations like this, it is best for the buyer’s representative to communicate clearly with the lender to ensure they know exactly what is needed for the day of closing.
Lenders, as mentioned above, will be finalizing the mortgage until the last moment and credit checks are an area that they can re-evaluate. It is advised not to make any large purchases during the home buying process that could affect your debt to income ratio or savings and checking totals. Agents should advise clients to not make any large purchases during this time as not not affect their savings totals, checking totals, or debt to income ratio.
Even if it appears all is finalized with your mortgage, tell clients to keep purchases at bay until the closing is finalized! Client’s credit should as it appeared in the earlier stages during the pre-approval.
Closing Date Chaos
When the period between when an offer is signed by both parties and the closing date is too small, it is almost certain a delay will occur. The closing date is determined when the buyer submits an offer, and negotiations are made with the seller. There are a number of things to take into consideration in order to keep this date intact.
Mortgage processes, home inspections and contingencies can all be timely and have to occur before closing. Making sure there is plenty of time to accomplish these items is key to preventing a delay. Real estate agents and lenders can help advise buyers and sellers to agree on a more realistic closing date.
Part of the home buying process is getting a home appraisal. If the home appraisal comes back at a lower than the agreed upon price, a delay can and will occur. Unfortunately when this occurs, somehow the difference from the appraised amount and the selling amount must be made up by either the seller or buyer.
As an agent, help advise clients on offering a fair price on a home to prevent delay. Seek lenders with local and knowledgeable appraisers. This helps to ensure a more accurate appraisal is given. Another tip is to try and be there for the appraisal and inform the appraiser of any short sales or foreclosures that may affect the price of comparable homes sold in the area.
A home inspection is important for every home buyer to ensure the home they are purchasing is up to par and in sound condition. Once the inspection report comes back, the buyer can then request that the repairs be made or in some cases a seller concession may be offered. Getting the home inspected as soon as possible and communicating with the seller on the repairs regularly will help to prevent unexpected closing delays. It is better to know a week before closing that a repair is taking longer to accomplish than the day before!
For more from Teresa, check out her blog here.
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