Potential Issues that Delay a Real Estate Closing
Real estate closing is the final step of the home buying process – and unless this is done, the sale isn’t officially completed nor is the property transferred to you.
As a first step, your real estate agent submits a purchase offer on your behalf. Now when this offer is formally accepted, closing takes at least a month from that date. But in some cases, it may take longer than this. Real estate closing can take 45 to 60 days as well depending on the financing type, contingencies and other factors.
So what issues cause a delay in closing? Let’s take a look.
Unrealistic closing date
This is the first and most common closing issue. Like we said, closing takes 30 days on average, and if the seller and you decide on a closing date that is only two weeks way, it’s not going to happen, and you’re bound to miss it.
But if you work with a reputed real estate agent, they’d easily know if the closing date can be met or not, and can guide you accordingly.
Financing delays are another common closing issue. Generally, you can close sooner and more smoothly if you get pre-approval on your loan before you begin your home search. Pre-approval is different from pre-qualification. The lender runs a check on your credit profile, assesses your financial situation, and accordingly, agrees to lend you certain amount at a certain rate. As part of the process, you fill out an official mortgage application and even pay a processing fee. So pre-approval is better than pre-qualification.
Even if you’re a preapproved buyer, you may still have to encounter financing delays. The biggest of which occur when your application is submitted to an underwriter. The main causes include credit report mistakes, additional debts, title issues or changes to income or employment.
Refer to a home buying checklist, go over all your details and documents, and ensure everything is in order before initiating closing.
More Documentation Required
The home buying process requires extensive documentation at several stages. Your lender requires plenty of things and information from you before they close the deal. Even when you have submitted everything, your lender will review your bank statements and credit reports once again just before they close. If something like a large deposit or withdrawal requires an explanation, closing will likely be delayed.
Title Report Problems
Your lender will not close the process unless the title is clear. But many times, even sellers aren’t aware of title issues. If any of these exist, they’ll have to be dealt with first.