Common real estate closing problems

Common real estate closing problems

| Nov 11, 2020 | Real Estate Closings, Real Estate Law |

Residents of Florida who have closed on a real estate deal know the amount of anxiety that can result from the process. Many of these homebuyers are, unfortunately, familiar with one or more of the ugly surprises that can change the outlook of a real estate deal on closing day.

Title problems

A title company will become responsible for investigating the history of a property that has become part of a real estate transaction. This history may include details of past ownership, liens against the property, and any judgments or encumbrances against the property. Real estate law mandates that the title of a property be clean before the completion of a deal.

Walk-through discoveries

The final walk-through of a home is responsible for the majority of surprises faced by prospective homeowners on closing day. Possible revelations include:

  • Cracks in the foundation
  • Pest problems
  • Unfinished repairs
  • Locked rooms
  • Flood damage
  • Utility problems

Many times, the final walk-through happens the day before closing. Homebuyers can minimize the chances of walk-through discoveries stalling a deal by inspecting the home well in advance.

What items stay

Buyers and sellers often have misunderstandings regarding what items will remain in the home following a sale. This misunderstanding could happen when a ceiling fan, stove or other appliance that the buyer thinks will become their own after the sale is not in the home on the day of the walk-through. Both buyer and seller should make sure they are on the same accord with this issue during the negotiation process.

Credit problems

Individuals who make it to closing day probably received mortgage approval more than a month before. However, a change in the financial situation of potential homebuyers can result in last-minute credit problems. Issues that can affect mortgage status include job changes, falling behind on bills and applying for other forms of credit. Closing day credit problems can lead to the rescinding of a previous loan officer from a financial institution or a decision by the company to raise the rate of interest attached to the mortgage.

The buying and selling of real estate can involve many complexities that people do not face in their day-to-day lives. Individuals with questions regarding their participation in the real estate market may find the answers they need by speaking to an attorney.

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