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Common Causes of Home Closing Delays

Common Causes of Home Closing Delays

a house model, one hand with key, another hand with money
A seller’s hand with a key, a buyer’s hand with dollar bills, a house model at the background

At the 11th hour, a variety of issues may come up with real estate deals that cause home closing delays. Before escrow can close, buyers and sellers must meet all purchase contract terms, the sellers must transfer the property deed to the buyers, and the buyers must deposit the funds for the purchases to the sellers. Should problems arise during this time, the closing process may be delayed until they are resolved.

Title Issues

Problems with the titles for homes could delay potential buyers’ taking over ownership of the property. Before the closing date, a title search is performed to identify issues that may preclude its transfer from the seller to the buyer. For example, a lien or judgment against the property or someone other than the listed owner laying claim to the real estate could affect people’s right to sell a home. 

Problems With the Appraisal Value

Should a home’s appraisal come in significantly below the purchase price, mortgage lenders may refuse to provide financing. Consequently, the closing may be delayed temporarily while an alternative agreement is reached or indefinitely if sellers cannot reach new deals with buyers and their lenders. Professional appraisers may come in with appraisal values below the property’s asking and potential sale price based on factors such as changing market conditions, a lack of recent sales of comparable properties, unrealistic seller expectations, or the appearance of the home. 

Surprises During the Inspection

Home inspections before finalizing the purchase and sale of a property may reveal serious issues that warrant the buyer pulling out of the deal or a renegotiation of the purchase agreement. For example, a home inspector may identify a severe termite infestation or significant electrical wiring problems. Buyers may choose to go forward regardless of the inspection findings, or they may ask the seller to make the necessary repairs or credit them the cost of fixing the issues at closing.

Loss of Mortgage Financing

Unless they pay cash for their purchase, homebuyers must qualify for loans through their chosen lenders. Lenders may pull financing due to issues such as dishonesty or inaccuracies on loan applications, a lost source of income, or a drastic increase in debt before the closing.

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