Issues When Closing Real Estate Transactions

June 10, 2018

For most real estate buyers, the closing day can be very unnerving. Add to that is the anxiety caused by possible last-minute surprises. Some of these unexpected issues can be negligible, but others are a deal breaker.

Surprise problems during the final inspection

The walk-through is one of the main reasons for anxiety on closing day. The last home inspection is usually done one day before the settlement. Sometimes, in the morning of the closing day. This gives you almost no time to prepare for issues that you might discover.

For example, a big storm overnight might have flooded the basement or flaws in the wall such as cracks will be exposed now that everything was cleared.

If the issue you encounter is a major one such as flooding, you need to think twice if you haven’t decided to close the deal. To prevent this unpleasant surprise, it’s better to inspect the house before the final walk-through thoroughly.

Ask for a home visit after a big storm to check any dampness or flooding. However, if you encountered such type of issues, there are ways to deal with it. One is to ask the seller to handle the cost of repairs, and include the funds in escrow. You have to get a detailed quotation from professionals so that you will know how much will repairs cost. Most real estate closing services Florida can help you mitigate these issues.

real estate closing

What items are included in the sale

Another issue that a lot of people encounter during the last walk-through is miscommunication which items transferred to the buyer? During your initial home visit, you may be interested in the seller’s ceiling fan, antique stove, or other things and expects that they would stay. Unfortunately, in the final walk-through, you’ve just found out that the seller took them.

It’s better to let this one slide, especially if there’s no agreement, even verbal one that the item is included in the purchase. The simplest way to avoid this simple issue is to specify in the contract what items remain in the house or everything will be taken away.

Be detailed with the items, especially if there is something that you like. Also, include your expectations in the contract.

Last minute credit changes

You were already approved by a mortgage company a month earlier, so you are confident that you won’t have this problem. However, even a small change in your credit rating can have an impact by the time you close the property. If you apply for a credit card, changed job, failed to pay bills, or depositing a huge amount of cash can alarm the mortgage company.

A lender withdrawing an offer is a serious matter because you won’t be able to close the sale until you find another mortgage. Another possibility is your lender might increase your interest rate, if this happens, you have to think twice if you can still afford to buy the house.

To immediately solve this issue, get in touch with your lender few days before closing to address any problems that may have turned up overnight. Avoid making any major financial moves during the weeks before the closing date. For example, quitting your job, applying for credit card, or receiving a $10,000 deposit from a relative who wants to help out.

A misunderstanding with Payment Method

attorney title services mode of paymentOne of the main tasks of the closing day is to transfer funds. Each title company and financial institution has their preferences in accepting payment. The typical title company mode of payment is cashier’s or certified checks and electronic transfer. If you have the wrong account numbers or paperwork, then it will cause inconvenience to both parties.

This issue is a minor one and can easily be avoided or fixed. Confirm to your agent and lender their required form of payment. As a backup, bring your checkbook for small bills that might appear, such as an unpaid electric bill.

Title Issues Discovered by the title company

A title search which is meant to find out all the details about the property may bring up issues they discovered on the closing day. If encountered with such problem, don’t hesitate to step back and insist on giving you time to study the problems presented to you by the title company. Look for attorneys title services jacksonville fl for further assistance.

Problems like claim on the property from a third party or tax liens can postpone a closing. Small things like unpaid HOA dues or covenants with minor restriction may not necessarily be a deal breaker. However, all title defects should be addressed before closing the property. It is frustrating that you discovered all these issues just right before closing, however, it is better that you have discovered these problems before you close the deal rather than after you have already stayed in your new home.

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