Without a doubt, real estate closing will always be both thrilling and intimidating for you, regardless of whether you're the one buying or selling the house. Many shocks might be difficult to handle, even when both parties agree on a specific date and may be happy with the money on the table.

The National Association of REALTORS® (NAR) released statistics from its February 2024 REALTORS® Confidence Index Survey, which shows that 11% of contracts had delays in the previous three months and 6% were terminated.

Even though nobody wants to wait around for a real estate transaction to go longer than necessary, there are a few different reasons why your closing date can be postponed. While some problems are comparatively simple to fix, others might not work out at all. Here are five of the most typical issues that cause closings to be delayed, along with management advice for each.

5 Issues That Could Delay Your Real Estate Closing

Difficulties With The Buyer's Funding

Extended closing times are frequently caused by delayed or rejected finance. Many house purchasers, particularly first-time buyers, are unaware that their loan is still subject to change even after they have already committed to a mortgage and been pre-approved for one month prior. Within a few days of closing, the lender will verify their bank statements and credit report one last time.

If the second verification shows that a new credit line has been opened (for a new car, new house items, etc.), there has been a change in work, or there are other concerns, things could go awry. Keep in mind that, up to the point at which you close on the property, even the slightest adjustments to your financial status could cause issues. Therefore, it is not a good idea to change professions, apply for a new credit card, fall behind on your payments, receive a financial gift, or have a significant sum of money suddenly appear in your bank account. This is because the lender might ask for further information or documents, which could cause problems.

Prevent this by not making any rash financial decisions in the weeks leading up to loan approval and closing. Additionally, don't forget to get in touch with your lender a few days before closing to address any concerns that may have surfaced.

Any Discrepancy In The Home's Appraisal Value

A home's market worth is ascertained through a home appraisal. To ensure that the property is truly worth the amount a buyer has agreed to pay, lenders need an assessment. The appraisal value of the bank must be at least equivalent to the home's value or sale price. If the appraisal value is insufficient, the bank will delay the closure.

Due to rising home prices, appraisal gaps—the discrepancy between a home's appraised value and the agreed-upon price—have recently increased significantly. Addressing this can take some time, even though it doesn't always imply that the deal is off. In reality, 7% of contracts have delayed settlement because of appraisal difficulties, according to the REALTORS® Confidence Index Survey conducted by the National Association of REALTORS® in February 2024.

To prevent this: If both sides agree, the seller can lower their asking price or make the required renovations to raise the home's worth. If the assessment is too low, buyers should also be ready to cover the gap. The evaluation may potentially be contested by the parties. The closing date will probably be extended, regardless of the final resolution.

Title Problems For Real Estate

A real estate title certifies a person's ownership of a piece of property. The title to your home must be changed from the seller's name to yours before you can purchase it or become the owner. Additionally, you must confirm that the seller of the property genuinely has the authority to sell it. At this point, a title search is important.

A title search, according to Bankrate, is a procedure when a title company or lawyer looks through public records to ensure that a property is free of liens, claims, or other problems that can lead to someone else claiming ownership of the house. Issues like as tax liens or claims on the property from co-owners or family can cause delays in real estate closings. Even in cases of overdue HOA dues and minor errors in the public records of the home, transactions may be postponed until the concerns are remedied.

To prevent this: By having a real estate lawyer investigate the home's title history, a seller might be able to anticipate title issues. However, there is little a buyer can do to prevent title issues because they can arise from prior errors. A little flexibility and patience will go a long way because they will undoubtedly take some time to resolve. Even though it could be annoying, it's advisable to take precautions rather than risks when attempting to become a homeowner.

Issues About The Transfer Of Funds

You must have the appropriate quantity of money ready on the day of the real estate closing to pay your closing expenses and down payment. There may be a delay if there is an issue with your fund transfer.

Certain financial institutions and title corporations require electronic fund transfers, while others prefer cashier's or certified checks. It's crucial to find out your settlement agent's or lawyer's wiring requirements if you are told to send money.

To prevent this, be careful to discuss the necessary payment method with your lender and real estate agent before closing day. Additionally, be knowledgeable about the closing expenses and certified funds and understand exactly what is expected of you. Remember to carry your checkbook and be prepared to settle any little bills that may come up, like an unpaid power bill.

Unpleasant Revelations During The Final Walkthrough

A few days before settlement or on the day of settlement, the seller usually vacates the property before the final walkthrough is finished. It enables purchasers to do a final inspection to ensure that the house is in the same (or better) condition as when they signed the contract.

During the last walkthrough, unexpected things could affect the real estate deal. Some of these include:

• Missing fixtures: Misunderstandings of what things belong to the seller or the house is a common issue. Maybe you developed a strong attachment to a certain household object and thought it would remain, only to discover that the sellers took it with them. If you want this purchase to go through, you might want to overlook this one unless you're truly connected to the item.
• Unfinished repairs: You might not be able to close on your loan until the seller completes any agreed-upon repairs if they "forget" to fix them or don't get around to doing them by the closing date. Working with a reputable real estate agent will help you avoid delays by making sure the repairs you've arranged are finished well in advance of the planned closing.
• Other last-minute discoveries: Ensure the toilets, utilities, and other home systems are operating correctly. You should also double-check that the appliances are operating.

To prevent this: Effective communication is crucial to resolving issues during the last walkthrough. Ensure your contract accurately reflects your expectations by being quite specific about what remains and what is removed. Regarding the agreed-upon repairs following the home inspection, the same is true. The closing date won't be postponed if the seller makes the necessary repairs, agrees to a lower sales price, or takes other action. The safety and soundness of the property are of the highest importance.