Buying or selling a house can be a long and stressful process. Even the most straightforward transactions involve multiple parties and many steps. Once the closing date is set, it can be tempting to relax and assume everything is on track. However, house closing delays are more common than you may think.Buying or selling a house can be a long and stressful process. Even the most straightforward transactions involve multiple parties and many steps. Once the closing date is set, it can be tempting to relax and assume everything is on track. However, house closing delays are more common than you may think.
The Most Common Reasons for House Closing Delays
House closing delays can be caused by a number of issues on either the buyer’s or the seller’s side. While some things are out of your control, following these closing day tips from the US Consumer Financial Protection Bureau can help ensure the process goes as smoothly as possible.
Despite best efforts on the part of the buyer and seller, there are a few common culprits of delayed house closings. Armed with the knowledge of what can happen, you may be able to take steps to avoid such delays.
Appraisal Problems Can Cause House Closing Delays
If the buyer is purchasing a home using a loan secured by a mortgage, the lender will require an appraisal of the property. An appraiser will evaluate the property thoroughly to determine what it is worth. This determination is made independently of the agreed upon purchase price. The lender will only approve a loan for what the appraisal says the house is worth, so if the home appraises lower than the agreed upon price, the buyer will have to make up the difference unless the price is re-negotiated.
Sometimes buyers and sellers can meet in the middle to get the price of the home closer to the appraised price. Other times, the buyer may elect to make up the gap using cash savings. However, if there is a delay in coming to a solution in covering the appraisal gap, it may push back the closing date.
Whether you are the buyer or seller, the home appraisal can have a significant impact on your transaction. You can learn more about the appraisal process by talking to a trusted realtor or a WV residential closing attorney. The West Virginia Appraisal Manual also has tips and information regarding appraisal for WV home buyers and sellers.
Inspection Problems Can Also Delay Home Sales
Most buyers include a clause in the purchase contract that gives them the ability to have a professional inspection of the home. Inspectors look at every aspect of the home—including the foundation, electrical systems, plumbing, structural components, and roofing—and provide a written report detailing the condition of the home.
While it is rare to have an inspection come back perfect, some home issues will require repair or replacement in order for the deal to move forward.
Sometimes the buyer will agree to a lower purchase price to account for the work that the inspection indicates will have to be done; other times, the seller will agree to make the necessary repairs before closing. If the buyer and seller can’t agree on a path forward regarding needed repairs, or if the necessary repairs aren’t made in a timely fashion, it can delay or even prevent the closing.
Both buyers and sellers should be aware of best practices when it comes to hiring an inspector. The West Virginia Association of Home Inspectors regularly publishes FAQs, tips, and information about inspector ethics, which all buyers and sellers should review.
Closing Delays Caused by the Lender or Title Search Results
The closing date could still be delayed even when the buyer and seller have done everything required to close on time. Sometimes the lender simply has a backlog of closings and cannot get the required approvals in time to meet the closing date. In other circumstances, the lender may uncover a deficiency in the buyer’s finances and delay the closing.
Title search results can also delay a closing. Search results revealing a defect in title—a record that impacts the seller’s right to convey the property or demonstrating another party’s interest in the property—can impact a buyer’s ability to move forward or even the insurability of the property title.
The best way to avoid having a closing delayed due to lender issues is to keep in constant communication with the bank or institution originating your loan and have a WV residential closing attorney review the title report.
A WV Residential Closing Attorney to Help Solve House Closing Delay Issues
House closing delays are not only inconvenient, they can also be costly. Depending on the circumstances, a delay could result in a closing date delay penalty, which increase costs significantly if there is a long delay. Having a WV residential closing attorney in your corner can help ensure that your closing goes smoothly and happens on time. For legal assistance with residential closings in WV, contact Allison Farrell at Jenkins Fenstermaker, PLLC's Clarksburg office by calling (304) 521-6120 or by filling out the firm’s online contact form.