When buying a new house, nothing is more exciting than finding out your offer has been accepted for your dream home. The countdown to closing may begin, but there are still some factors to stay cautious of that could delay your closing and push back that move-in date. We hate to see that happen with any of our clients, so we’re here to explain the meaning of a delayed closing and the main setbacks to stay aware of so you can keep your plan on track.

Many unexpected circumstances can arise during the home buying process, resulting in your home not being ready for you in time. These rising issues need time to be fixed; it typically comes down to the time frame they need. And often, when a buyer wants to close as quickly as possible, their rushed excitement can lead to unrealistic contract clauses. Although a delayed closing doesn’t always happen, it’s best for both buyers and sellers to know the common causes.
 

Securing Financing

Correct financing becomes a top problem because it can be a complicated process. Unless you submit an all-cash offer, you’ll need to secure the funding to purchase your home. Even if you plan and obtain a mortgage pre-approval, it doesn’t guarantee your loan application will get approved. To avoid any financial fall-throughs, double-check there aren’t any significant financial changes from the time of submission to the time of closing, and be fully transparent about your financial situation. By being upfront and honest, you can avoid last-minute surprises. It’s also essential buyers come to closing with necessary closing documents and payments fully prepared. So for those higher closing costs, contact your bank ahead of time to find out everything you’ll need for bank checks and wire transfers.

If your financing is set, the next step is the home inspection. Home inspections are important and help the buyer understand the house’s condition. Buyers aren’t required to get inspections, but they are HIGHLY recommended. They can uncover any major issues or repairs you don’t know about, taking a potential burden out of your hands. If any problems or damage come up, the buyer and seller must agree on how to approach these issues. As the buyer taking a house off the seller’s hands, you have the flexibility to either ask the seller to complete the repairs before purchasing the home or request a monetary concession to offset the repair costs. Remember to remain open when negotiating if you want to keep the deal from falling through.

This next potential obstacle is for sellers. Many deals are made with a list of contingencies. One of the most common ones is the home sale contingency. This means that the buyer's offer is contingent, or dependent, upon selling their current home. To ensure buyers aren’t stuck paying for two homes, this contingency allows the buyer to back out of the deal if their sale falls through on their current home or they don’t sell their house by the closing date. If you see the buyer has trouble selling their home, you as a seller can include a kick-out clause contingency in the purchase contract. You can continue to market your home and find a better offer. As a bonus, the seller will be in a better position for negotiations if a second offer comes in.

One Last Look

The last and probably most crucial step is the final walk-through. The sellers have moved out, and now the buyers have the chance to explore the property a final time before taking over ownership. Here, you keep your eyes open for any incomplete repairs or ignored damages. While this could delay your closing, addressing the problems before closing is necessary, so you don’t get cheated out of your end of the deal.

While these problems may have increased your worries about a delayed closing, know that these situations aren’t common. However, it’s always best to know worst-case scenarios to avoid any negative surprises. At LRG, we want our clients to understand the buying or selling process, so if you have any questions about it contact us today.