Getting an offer for your house quickly can be exciting. Every home seller wants to spend as few days on the market as possible. But before you can start celebrating, you should know that closing on the sale of a house can be a long process.
Closing usually takes about a month and involves not just the buyer, but lenders, title companies, and home inspectors. Here are some issues you could face during closing.
Problems Getting the Loan Amount
Most buyers won't come to you ready with the cash amount required to buy the house. They will have to apply for a mortgage, have the lender appraise the property, and hope that the loan gets approved. Home sales often get stalled due to issues with the buyer's loan application.
The buyer may have their loan rejected outright because they've filed incorrect paperwork or used fraudulent methods. It could also happen that the house appraised for less than expected and the buyer needs to raise additional funds.
One of the ways to avoid this problem is by having buyers show you a mortgage pre-approval letter before going forward with the sales agreement. A pre-approval shows that a lender has already done a hard check on a borrower's credit history and given the green light for a certain amount.
Inspections Unearthing Major Defects
Inspections are an important part of the home sales process. Most buyers will make their purchase contingent on inspections, so that they can back out if there are any major defects with the house.
If inspections do reveal major issues, you will have to negotiate with the buyer. Sellers either agree to reduce the asking price for the house or pay for repairs.
Lenders also carry out inspections independently on every house. This is usually to find out whether there are termites or other wood-destroying organisms on the property. If they find a severe infestation, you may have to pay to get it fixed to complete the closing process.
Problems with the Property Title
The title search is an important step towards closing on a home sale. This is the stage during which a title company checks to make sure you have the legal right to a particular property and to sell it.
It is quite common for title searches to reveal issues that can delay closing on a sale. This doesn't necessarily mean that your ownership of the house is in question; things like contractor liens or outstanding property taxes can show up as an issue with your title. Home sellers should ensure that they've paid off all debts against the house so that they can close its sale smoothly.
Erroneous Information on Documents
These are mistakes that are easy to avoid but also easy to make. As a home seller, you will have a mountain of paperwork to fill out. You won't have the time nor the interest to read every document or double-check each entry. This can often lead to mistakes with important documents, which can delay closing.
Most of the mistakes made while filling out documents are usually minor typographical errors or oversights. Sellers may fill out the wrong address for the house or misspell their name. Although minor, these errors need to be corrected before the transaction can go through.
The best way to avoid these issues is by previewing all key documents before you meet the buyer to close to deal. If you work with a real estate agent, they will help you make sure that you've entered the correct information on all the paperwork.
Issues During the Final Walkthrough
Buyers do the final walkthrough a few days before closing on the purchase. They do this to make sure that the house is in the same condition as they previously saw it and that no major changes have been made since.
Problems can arise if the buyer identifies unexpected changes to the property during the final walkthrough. For example, they may find that the heater suddenly isn't working or that the walls have been damaged. Another issue that comes up during final walkthroughs is sellers not completing repairs that were promised.
You can easily avoid these problems by keeping track of what repairs need to be made to the house and making sure that all key appliances are functional when the final walkthrough happens.
Confusion About Closing and Moving Dates
Buyers usually assume that they can move into a house once closing is completed. But some sellers may expect some extra time to move into their house. If you don't communicate effectively with the buyer, you can find yourself in an awkward situation on what they thought was moving day.
If you do need some additional time to pack your stuff and move into your new place, you have to communicate it in writing. You need to mention a specific date and time on which the buyer can move into the house. They may want to negotiate this with you, but what matters is that there is clarity on when you will move out and they can move in.
It can be overwhelming to keep track of all your obligations while closing on the sale of your house. This is where hiring an experienced real estate agent can be helpful. Clever Partner Agents guide home sellers through the closing process and make sure that they've filled out all the paperwork accurately.
You can hire a Partner Agent to sell your house and pay a flat fee of $3,000 or just a 1% commission on homes over $350,000 after the sale has been confirmed. Contact Clever to connect with a Clever Partner Agent in your city.