10 Items that Side Track and even Derail Closing

Purchasing a home can be both exciting and nerve-racking. Prospective homeowners face tremendous amounts of waiting as the home buying process ensues. Here is a list of everything that can go wrong during the closing of your new dream home.canstockphoto14463396

Low Appraisals

The majority, roughly 66 percent, of buyers get financial assistance when purchasing a home. Mortgage lenders often require appraisals of the property to determine their worth even if the buyer and seller have already agreed on a price. In the case of a low appraisal, the borrower can make up the difference, find financing elsewhere, pay for an additional appraisal or back out of the transaction completely.

Financing Challenges

Unfortunately, pre-approval doesn’t always ensure financing. Last minute problems may arise if the borrower loses a job, gets divorced, makes major financial purchases or experiences any other change in circumstances. Delays can occur as new financing is obtained.

Property Liens

Before closing, a title search will be conducted on the property. If there is any unpaid debt that lists the house as collateral, the sale can’t move forward until all liens are cleared up.

Pesky Pests

An infestation is reason enough for a lender to back out of the deal, even if both parties want to continue with the transaction. Before closing, the buyer needs to have the home inspected for termites and other pests. In the case of a manageable infestation, treatment should be complete before closing.

Needed Repairs

An inspection will be conducted to assess the integrity of the house. The inspectors will look for insect infestations, damaged roofs, leaky pipes and more that can lead to delays. If repairs are needed, both parties decide whether the seller will make repairs before closing or compensate the buyer for making the repairs at a later date.

Inspection Delays

Often, many buyers ask to do a walk-through of the home after the sellers have moved out. The closing may be delated as both parties decide how to handle any issues that may have occurred since the last showing. Issues include furniture or rugs concealing damage, movers putting holes in the wall and more. The initial purchase contract typically outlines how delays should be handled.

Changing Terms

In October 2015, three standard forms were replaced with the Loan Estimate form. Mortgage lenders must send one of these with the terms of the actual loan off at least three business days prior to closing for the borrowers to review. If the terms needed to be changed during this time, the three-day window resets and thus extends closing.

Unprepared Buyers

A buyer is expected to show up at closing with certain documents including copies of the homeowner’s insurance policy, proof of insurance payment, photo ID and certified funds for the closing costs. Failure to bring any of the above mentioned items will post pone the closing.

Insufficient Paperwork

Typically title companies and attorneys prepare the forms and documents for signing after all inspections, appraisals and other paperwork has been submitted. But even professionals can make mistakes and incorrect or incomplete paperwork can be a headache.  Although typos and missing documents don’t usually squash a deal, errors can delay the closing process.

Cold Feet

Although rare, sometimes a buy or seller just simply changes their mind. No longer wishing to continue with the transaction midstream can have its consequences. For instance, the buyer would forfeit their earnest money if they back out. If the seller backs out, they could be required to pay costs incurred by the buyer for inspections, appraisals and lender fees.

Protecting Your Home & Belongings During Holidays

Protecting During HolidaysAlthough the holidays may be over, a lot of people will still be traveling over the next few weeks and even months. While you’re away from home, here are a few tips to help keep your home and belongings safe.

1. Avoid status updating until you return from your trip. It may tempting to tell all your Facebook friends you’re heading out or sharing images on Instagram and Snapchat, but it is better you hold off sharing photos until you’re back home.

2. Place a hold on your mail. Have large piles of mail or newspapers at your front door or mailbox is a dead giveaway you’re not a home. Before leaving home, talk with your local post office about putting a hold on your mail and newspaper until you get back. Another option, talk with a trusted neighbor about collecting your mail and other daily deliveries for you until you get back.

3. Create the illusion that you’re home. Set a timer for your lights, TV, or radio for a hour or two while you’re gone to give the illusion that someone is home. While you’re away, arrange to have someone mow your lawn or snowblow your driveway (depending on the season) to make your home look like there is someone there. The more you can make your home look like it’s being lived in the better.

4. Unplug unnecessary appliances. Protect your home by unplugging unnecessary appliances and other electronics to protect your home from an electrical fire or power surge. Some items you should unplug when heading out of town are: TVs, coffee maker, microwave, and even your Christmas tree.

5. Keep your home cool. When you’re away, turn your thermostat down to 55 degrees (during the winter) —the ideal temperature to prevent your pipes from freezing and keeping your bill low—to save yourself on a huge electric bill. If you’re traveling during the summer months, set your AC to 85 degrees to keep your bill down. It is also a good idea to turn your water heater down while away.

What are some things you do to keep your home safe while away? We always love to hear from you so share your comments with us below.