Potential Closing Hiccups and How to Avoid Them

Most people know that closing on a new property can be equally as exciting as it can be stressful. There are important steps to take for the process where things can go not as planned while the stakes are high. Here are some potential hiccups that can arise so you can try to avoid them in the first place. 

Buyer Side Potential Issues

Job - It can happen that you lose your job during the home buying process. If you can find a new job relatively soon then you might be able to get a cosigner to keep the deal together. 

Credit - Your credit may have been perfect when you got pre-approved, but it could change later when you place a home under agreement. One of the potential reasons this could happen is if you take on additional larger debts like buying a new car so avoid larger purchases during this time so you don’t have any problems.

Down Payment - Be sure you have this ready and easily accessible meaning that you have the money ready to easily transfer (and not in a place where it takes several days), and know the amount needed.

Closing Disclosure - You should receive this three days before the closing day so make sure you review it and double check for anything that is incorrect. Tell your agent if there is one immediately.

Closing Costs - These are a different set of funds from your down payment, so make sure you have your closing costs ready and even add a little padding to the amount just to be safe. Your lender should provide you with a good faith estimate of what will be due. 

Insurance - As soon as you have a contract going on a home then start gathering some insurance quotes for it. That goes for both homeowner’s insurance as well as flood insurance depending on your location and if it is required. This will give you enough time to shop around if necessary.

Seller Side Potential Issues

Title - There could be a problem if your title company finds outstanding liens on the property. Your title will need to be clear of any issues or “clouds” so get a copy from your lender as soon as you can and review it.

Final Walkthrough Issues - Homes should always be completely empty of the seller’s belongings at the walkthrough and everything that was supposed to stay with the home should still be there. If either of these things are not the case or if there is any damage to the home then this could delay the closing unless an alternate arrangement is made.

Either Side Issues

Move Coordination - It should be understood that a buyer would move in after closing and the seller would be out before. However, sometimes wires get crossed and one of these parties is misguided or a moving snag takes place and causes issues. It might be a wise idea to exchange plans to avoid this so all are on the same page.

Death - You can avoid this potential issue with the contract stating that the obligations go to the heirs in the event of the passing of one of the parties.

Cold Feet - It can happen that one party for whatever reasons decides to not buy or sell the home. If a buyer does this, most agreements are written where they will forfeit their deposit as a result. If a seller does this, they will need to return the buyer’s deposit to them. The buyer could potentially sue the seller, but it is unlikely that they would. 

Natural Disasters - If any natural disasters occur and the home is badly damaged then most contracts will give buyers an out. If it is only a small amount of damage, appraisers may want to confirm that this damage is fixed so that buyers can proceed with the purchase as normally would have happened.