- Inspections, appraisals, title issues and financing can delay or put a stop to closing.
The deal is signed and sealed, but it may not be real.
A lot can happen from contract to closing, and until all is funded and keys are exchanged, getting to the finish line isn’t a sure thing.
Here are five reasons why a home sale may not make it:
1. Inspections
This is one of the most dreaded parts of the transaction, as all parties involved are dealing with someone playing house detective and investigating the unknown.
Inspections typically reveal surprise, shock, disbelief or some combination thereof.
A house that appeared to be in good condition has a host of issues that need to be repaired, or the inspector’s interpretation of some items has scared the buyers and sent them running for the hills.
No matter how hard the agents or the seller try to run interference and provide assurance and willingness to address the issues, the deal gets derailed.
2. Appraisal
This is another hold-your-breath moment for buyers, sellers, the agents and the lender.
Will it or won’t it hit value? A myriad of issues can affect the appraisal, including:
- The appraisers themselves. Are they local or from outside the area? Do they have a good grasp of the specific neighborhood? Are they competent? Just like real estate agents, not all appraisers think the same way, and some are more thorough than others.
- The loan. The kind of loan — conventional, FHA or VA — can also impact the appraisal results. Conventional loans typically have a bit more flexibility with the kinds of comparable sales that can be used.
3. Title issues
Say, for example, the title search comes back and reveals there is more than one owner who must sign off on the sale.
Perhaps it was a step or half-sibling or an estranged relative with an ownership interest in the house. In many cases, someone passed away or got divorced without getting his or her legal affairs in order, and the estranged party doesn’t agree to let go of the property.
In another common scenario, there might be a loan erroneously connected to the property. In those cases, you’ll need to contact the lender and ask that the documentation be corrected with the borrower.
These issues happen because of simple mistakes like typing in the wrong lot or block number.
4. Financing
Getting a mortgage these days is like undergoing major surgery. The process has many twists and turns, and lenders won’t say a buyer is a go until the “clear to close” has been obtained.
This only happens after the appraisal has been completed and the buyer’s file has come out of underwriting.
The seller and agents are not privy to much while the buyer is going through the loan approval process. Pre-approval letters are meaningless as are conditional loan commitment letters, which do little to provide assurance that the lender can make the loan.
Waiting over a month just to find out the buyer can’t qualify is a stomach-dropping moment for all involved. The buyer spent thousands of dollars on inspections and the appraisal, and the seller may have already moved out, but things can still fall through right before closing.
5. The unforeseen or unthinkable
Believe it or not, some buyers go MIA before closing.
Calls, texts and emails are ignored, and everyone is left concerned, confused and frustration; the seller is beyond livid, of course.
In the most sudden and tragic situations, job loss, medical situations or death derail closings with good reason.
Despite the most hands-on or proactive approach, the only certainty in a real estate transaction is its uncertainty.
Cara Ameer is a broker associate and Realtor with Coldwell Banker Vanguard Realty in Ponte Vedra Beach, Florida. You can follow her on Facebook or Twitter.
