Tackling your residential closing can often be a bit of a balancing act. With every real estate sale and purchase, there are a series of considerations that need to work together in order to successfully reach closing day. With this in mind, you may find yourself running into a plethora of issues before closing day arrives.
While these problems won’t necessarily derail the whole process, an experienced real estate attorney can help navigate these issues to find a way to continue moving forward.
Beneficial for both the buyer and seller in a real estate transaction, mitigating any surprises helps everyone find a way to make the process as smooth as possible.
Here’s what you need to know about any potential difficulties involved in a residential closing:
- Home Inspection Issues
- Appraisal Pricing Issues
- Issues With the Title
- Buyer or Seller Backs Out
- Closing Document Errors
- Issues With the Final Walkthrough
Home Inspection Issues
When it comes to your property sale, home inspections should typically be performed very early in the process, and after an offer is accepted on a home. An inspection should be very detailed and will cover every aspect of the property. Occasionally, this inspection can unearth some previously-unseen issues.
If this is the case, issues such as major structural problems, leaks, termite infestations, and other problems can grind the closing process to a halt. The seller will have the opportunity to rectify any issues that the buyer is unwilling to deal with. Larger issues can cause a buyer to back out of the process altogether.
Appraisal Pricing Issues
Another issue you may run into before your residential closing could have to do with appraisal pricing issues. The appraisal of your property will often have a large effect on the financing made available to the buyer. A home that is appraised much lower than the sales price won’t have the same potential for eventual return, so a lender will be less likely to approve a higher loan amount.
Any large discrepancies between the sales price and the appraisal can cause the buyer to need to find additional funding to complete the transaction. This could mean a larger down payment, or even sourcing the funding through an entirely different lender. Either way, this issue will probably translate into delays in the closing process.
Issues With the Title
Issues with the title of a residential property can lead to a delayed closing process. The title of the property is essentially a document that proves ownership. A title search will be performed to inspect this document to ensure the person or persons selling a property have the legal right to do so.
While this process can occasionally come up with title issues that will need to be figured out before the sale can be completed, these problems could include outstanding fees like taxes or liens. It could also include previously-unidentified co-owners such as a bank, relatives, or even the IRS.
Buyer or seller backs out
In order to prevent a buyer or seller from backing out of your sale, a purchase agreement should be properly instituted your transaction. The purchase agreement will outline justifiable circumstances in which either the buyer or the seller can legally terminate the contract prior to closing. This termination could be related to major issues found during inspections, financing issues, and more.
Satisfying all the necessary clauses and stipulations in the purchase agreement will greatly reduce the likelihood of either party backing out of the transaction. Unforeseen issues can always pop up, but sticking to your responsibilities will help make this outcome less likely.
closing document errors
With a residential closing, there are going to be a lot of documents to fill out and sign for. These closing documents will need to be prepared with great attention. At this point in your sale process, the assistance of an experienced real estate attorney is highly recommended.
The amount of information that will be provided can make it very easy to run into a plethora of errors. The simplicity of the errors, however, doesn’t make them any less costly. They will need to be corrected and the documents will have to be re-drafted, which can result in delays.
issues with the final walkthrough
One of the last issues you may run into during your residential closing has to do with your final property walkthrough. The final walkthrough is the last step before closing day. On this day, buyers will visit the property to make sure everything looks the way it did when they saw it at the start of the process. They will also be checking to make sure any repairs that were requested have been completed.
Uncompleted repairs or new problems can delay the closing process. This could include situations like the HVAC unit not working or leaks found in the roof. Any issues will most likely need to be rectified before the process can move forward. A real estate attorney will be able to help you mitigate these risks.
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.