The expectation of closing day is supposed to be exciting. You have spent countless hours searching out the best home, negotiating price, and are ready to have the keys in your hand. Unfortunately, the closing process involves many moving parts. The mortgage lender and the buyer’s attorney must meet all federal guideline requirements, the appropriate amount of time for due diligence must have passed, the title of the property must be clear for transfer, and so much more before the process is complete. If one part jams, everything else gets put on hold, and the final closing day can be pushed back sometimes for weeks, costing all parties involved money.
Common Occurrences for Home Closing Delays
If the home is in need of repairs and the agreed upon issues have not been fixed prior to closing, or found to not be properly repaired at the walk through, the closing process can be delayed until such time as the repairs can be made.
Written verification from employers, tax returns from the IRS and other tedious documentation is required before loan approval. In addition a closing disclosure agreement from the mortgage company is issued 3 days prior to closing and allows the buyer time to review everything before finalization. If said disclosure APR changes by a small percentage before closing, a new disclosure is drafted with an additional 3 days waiting period added before it can be officially processed.
The title of the new home must be clear of all preexisting circumstances before it can be transferred to the new owner. If something like an active home equity line is discovered (even if the line is untouched), steps must be taken by the seller to remove it before the closing may occur.
A few weeks before closing, the buyer’s attorney will order a land survey. If a previously unnoticed issue is discovered like an encroachment or a potential flood zone, agreements and insurance must be finalized and approved before closing.
Homeowner’s insurance is required to be in place by the lender before anything can be put in the buyer’s name. If there are any previous claims on the policy, the buyer’s lender must approve and the insurance company will need to verify that all repairs have been satisfactorily made before issuing a new policy. This may also create a closing delay.
Clerical Deed Errors
As with all official documentation, the deed to the property must be signed and notarized from the seller’s name into the buyer’s. It is the seller’s responsibility to deliver these documents at the time of closing and if a name is missing or misspelled, the process starts over again with a brand new document.
All buyers have to be present at the time of closing. If, for instance, the closing time is pushed back and not everyone is able to take time off from work or visit from out of town, the closing time will continue to be pushed back until everyone can be accounted for.
Sometimes it is due to the buyer relocating, a slow wire transfer, or simply bringing the wrong certified amount to the closing proceedings, but if the numbers are not exactly right, closing will be delayed until the proper certified funding can be obtained and delivered.
The closing attorney must record the deed and mortgage transfer to the courthouse before the keys are handed over to the buyer. Since the courts operate Monday through Friday, 8 to 5, and close for all holidays, a late closing proceeding on Friday could hold up completion until Monday morning or later if it is around the holidays.
Linda Craft & Team, REALTORS®
At Linda Craft & Team, REALTORS®, we have spent over 30 years providing our clients with homes in the Greater Raleigh area. Where closing delays do happen, our team works diligently every step of the way to catch potential delays before they occur, saving our clients both time and money.
Discover what working with the #1 Team in the Triangle can do for you. Schedule an appointment with us today at 919-235-0007 for a full listing of all of our services and more.