Whether you are selling or buying a home now or planning to do so in the future, you must understand that there can be significant delays in a real estate closing. A real estate contract and its terms and conditions are important, but they are generally not set in stone. One widespread real estate myth that sellers and buyers usually believe is, that the closing date in a real estate contract is actually when the closing will occur. Since a seller and a buyer agree to a target closing date in the purchase contract, it is fantastic when a closing takes place on or before the said date, but that is only sometimes the case. There are various reasons why a real estate closing can be delayed or even canceled. Because there are so many parties involved in a successful transaction, it is understandable that delays can happen. But the question is: why are they delayed? In this article, we familiarize you with why some reasons real estate closings are delayed.
Why Are Real Estate Closings Delayed?
1. Unrealistic Contract Dates
Whether you are a seller or buyer, it is crucial that you have a skilled real estate agent representing you. One of the most common reasons why real estate closings are delayed is because of unrealistic and impractical contract dates that were agreed upon in the purchase offer. An experienced real estate professional knows how to structure the dates appropriately in a purchase offer. Usually, it takes approximately 45-6- days for a real estate closing to take place after the purchase offer is accepted. Obviously, this depends on the type of financing a buyer is sourcing to buy the property as well as the number of contingencies in the purchase offer, among other things. A real estate agent will know whether the contract dates are realistic or not.
2. Title-Related Issues
Another reason why real estate closings can be delayed is related to the title of the piece of real estate. One of the most crucial reasons why it is suggested that both a seller and buyer hire a real estate litigation attorney is because they will help you make sure that a ‘clean title’ is being transferred. It can be really annoying for a buyer who is trying to sell a home in the future only to realize there were previous liens against their home that were not found out when they bought the house.
3. Real Estate Appraisal Issues
When selling or buying real estate, you must understand that a substantial piece of a successful home sale is the bank appraisal. It is part of a real estate transaction anytime a buyer is getting a mortgage. It is also essential to understand that there are common problems with bank appraisals. The reasons issues that arise from a bank appraisal can delay a closing can differ from a home that under appraises and the seller and buyer cannot come to an agreement or because of repairs that are required by the appraiser. It is always essential to make sure that your real estate agent is following up to ensure that the appraisal has been completed, to ensure the home appraised at the sale price or perhaps higher, and that there were no repairs required from the bank appraisal.
4. Agreed Upon Repairs Are Not Followed Through
There are plenty of reasons why buyers have home inspections. The main reason is to make sure that the home they are buying does not have any fundamental deficiencies that will cost a lot of money in the future. After a home inspection is done, the buyer has the right to request repairs or at least some type of seller concession in lieu of the repairs. If a seller agrees to make repairs, it is essential that these repairs are done once a buyer obtains their mortgage commitment. Closings can be delayed because a seller ‘forgets; to make agreed-upon repairs or just neglects to follow through. If you are purchasing a home, you must expect from your real estate agent that they are making sure the repairs that you have negotiated to be completed are completed before the closing is scheduled in order to avoid delays in closing.
5. Last-Minute Inspection Issues
Usually, home inspections are done at the beginning of the process and for all good reasons. If repairs need to be made, the parties are given the time to get to them. Nevertheless, due to miscommunications, neglect, or delays, some of the repairs may not be done, and this will usually come to your attention during the final inspection. Mortgage lenders do not stand for this as they are not receiving what is on the contract, so expect delays. In addition, final inspections can uncover problems like broken plumbing fixtures or appliances. These types of issues often cause closing delays.
Many things must be taken care of in order for a real estate deal to close in time. There are various legitimate reasons that a closing could be delayed and some of them are simply unavoidable. It is necessary to have a strong team of real estate professionals, as is taking advantage of all the required protections available to you for your title. At David Ghavitian, you will find the best property lawyers in Montreal who will work by your side and make sure that there are no unpleasant delays in your closing. So, get in touch with us today and get started on your home-buying process.