Residential Closing: What You Need to Know

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By Rochford Law Posted on August 16, 2021 at 12:52 PM
 

As about 23% of residential closings deal with various contractual delays, you’ll want to understand everything regarding your residential closing process. In order to successfully close a real estate sale or purchase, many aspects must work together in harmony. Due to this, you may find yourself facing a range of issues before the closing date.

How do you face these issues? An experienced attorney can guide you through these issues and find a solution to continue moving forward. Mitigating surprises is beneficial to both buyer and seller in a real estate transaction, since it helps everyone find ways to make the transaction as smooth as possible.

Here’s what you need to know about residential closings:

  • Property Inspections
  • Appraisal Pricing
  • Property Title
  • Buyer or Seller Backs Out
  • Problems With Final Walkthroughs

Property Inspections

If you are selling a property, home inspections should be performed immediately after an offer has been accepted on the property. Each aspect of the property should be examined during the inspection. These inspections are critical, as they may uncover previously unseen issues.

The closing process can be slowed down if there are structural issues, leaks, termite infestations, or other types of problems. If the buyer is unwilling to deal with any issues, the seller has the opportunity to resolve them. If the issues are a deal breaker for the sale, the buyer can walk away from the purchase.

Appraisal Pricing

A second issue you might encounter before your residential closing is appraisal pricing. In many cases, your appraisal will have a significant impact on the buyer's ability to get funding. Consequently, if a home is appraised at an amount lower than the sales prices, the lender will be less likely to approve of a loan amount that exceeds the sales price.

An appraisal that varies greatly from the sales price can force the buyer to find additional funds to complete the transaction. If this is the case, a larger down payment may be necessary, or alternative funding may be sought from another lender. Accordingly, funding issues will probably affect the closing process.

Do you need help with your residential closing process? Contact Rochford Law & Real Estate Title today!

Property Title

The closing process of a residential property can be delayed if a title issue arises. In essence, the title of a property proves who has ownership. In order to ensure that the person or persons selling a property are legally entitled to do so, a title search will be performed.

A title search might uncover outstanding fees, such as taxes or liens, requiring the sale to be halted or delayed. The search might also uncover the IRS to be a co-owner, or find another previously-unidentified co-owner, such as a bank. Issues such as these can be resolved or brought to a close with the help of a residential closing attorney.


Buyer or Seller Backs Out

A purchase agreement should properly institute your transaction in order to prevent a buyer or seller from backing out. During the buyer's or seller's option, the purchase agreement will outline reasons for the termination of the contract. Inspection results, financing issues, and more may be factors contributing to termination.

It will be much less likely for either party to back out of the deal if all the necessary clauses and stipulations are included in the purchase agreement. Staying on top of your responsibilities will make this outcome less likely, but unexpected issues can always occur.

Problems With Final Walkthroughs

Your final walkthrough of the property may be one of the last challenges you encounter during your residential closing. Before closing day, there is one final walkthrough. During this time, the buyer will visit the property to ensure that it appears the same as it did at the beginning of the process. Additionally, they will verify that any requested repairs have been completed.

It may take longer to close if repairs are unfinished or if new issues arise. A malfunctioning HVAC system or roof leaks could apply to this situation. Prior to moving forward, any issues will need to be resolved. Mitigate these risks with the help of a real estate attorney.

Contact Rochford Law & Real Estate Title

Hiring an experienced real estate attorney like Rochford Law & Real Estate Title in Nashville, TN can save you time and money in the long run. It’s best to cover all your bases and get through a real estate transaction with as little problems as possible. However, it’s comforting to know that should a dispute pop up, a real estate litigation attorney can help find a resolution.

Contact Rochford Law & Real Estate Title today!

Topics: Nashville Real Estate, Real Estate Attorney, Residential Real Estate