Real Estate Closing Issues - Real Estate

Real Estate Closing Issues   by Carol Bayer

in Real Estate    (submitted 2012-03-07)

Buying or selling a home can be a lengthy and sometimes frustrating process. It's easy for first time home buyers to get excited once the offer is accepted. Unfortunately, it's not time to celebrate until the papers are signed and the keys are in your hand. Here are just a few bumps in the road that you may face on your way to the closing table:

Inspection - Any good realtor will advise you to put an inspection clause in your contract, which allows you to cancel within a given period for any reason. Typically, the reason is to give yourself enough time to get a thorough home inspection. Even brand new “new construction” homes can have extensive, hidden damage. A home inspection could easily turn up problems like termites, lead paint, Chinese drywall or even a sink holeâ€"all of which could cost you thousands of dollars in repair.

Appraisal - Your lender will want to ensure that their investment is sound. In other words, most lenders are going to want to appraise your home to make sure you aren't borrowing more than the house is worth. If the appraisal comes back for less than you want to spend, your lender will either force you to lower your price, or you will need to come up with the difference in cash.

Clouds on title - Your title company will be performing a title search and issuing title insurance before closing on your home. This search is for your protection, and ensures that there are no liens on the property, that could potentially interfere with your ownership. The title insurance is a guarantee that no one can make a claim on your property in the future. If there are any “clouds” or issues with the title, it could severely slow down the buying process.

Financing - Your Realtor should advise you to get pre-approved before beginning your house hunt. Pre-approval helps you know how much you can afford, and helps you make a stronger offer to a seller. Unfortunately, until your lender actually approves your loan, there can still be snags in the process.

Issues - There are many parties involved in the closing process, and unfortunately even a small mistake can push back your closing day. A good Baker Real Estate Agent will have protected you by including a clause in the contract, which allows for these mistakes without penalty. If you're buying your home without a real estate agent, you'll want to make sure to protect yourself with a similar clause.