When your offer gets accepted, you’re only just getting started. Before you can close, there are a number of hurdles you need to jump over.
1. Cold Feet
Buying or selling a home is a major decision, and it’s only natural for someone to get cold feet. The good news is that time can help dissipate their jitters, as well as the idea of not wanting to pay to get out of the contract usually move things along.
2. Injury or Sickness
Sometimes there’s just no getting around getting sick or getting an injury, especially if it’s severe. With the current outbreak of the coronavirus, it has definitely put everyone on edge –especially if you’re nearing your closing date. Luckily, Insure My Closing can cover* home closing delay expenses in case serious injury or severe illness happens to you, or the seller.
3. Low Appraisal
In order to get financing, you need an appraisal that supports the loan’s value. If the appraisal is low, you may need to renegotiate or put more money down.
4. Title Problems
If the title search shows liens or other claims on the property, it could take some legal work to clear them or renegotiating to account for not having a clean title.
5. Risk Zones
If the home is in an area that’s at high risk for floods, fires, earthquakes, or other disasters, it could take additional time to find an insurance company willing to cover you.
6. Insurance Issues
Major problems with the home itself, such as roof issues or mold, may need to be repaired before your insurance company will write a policy.
7. Termite Damage
If your inspection finds termite damage, it’s almost impossible to close until the infestation is remediated. You may also wish to exercise your option to walk away if the problem is too severe.
8. Other Inspection Problems
Other issues during inspection might not be enough for the bank or insurance company to refuse to close, but they could lead to a disagreement between the buyer and seller over how to resolve them that adds an extra round of negotiations.
9. Closing Costs
Your lender should give you a good faith estimate of your closing costs, but you may find a large increase on your HUD-1 form when you go to close. This could leave you needing to find another lender.
10. Paperwork Errors
With all the paperwork that goes back and forth leading up to closing, a mistake will probably happen. The fix is almost always just redoing it, but that could add a few days of waiting for the right person.
11. Losing Financing
Even with a preapproval, you don’t actually have a mortgage until you close. To avoiding losing your financing on your new home: do not overpay for your new home before you get an appraisal and avoid big credit card charges before closing. These are the two most common mistakes when buying their home.
12. Vacancy Date vs. Closing Date
On top of all these other obstacles, there’s also the possibility that your home buyers or your landlord have to have you vacate your current home sooner than you’d like. This can quickly leave you without a place to stay! Unfortunately, 1 in 4 residential real estate closings experience a delay. Start creating real plans-of-action before a situation like this occurs!Insure My Closing can help cover unexpected expenses for this situation. Coverage includes: hotel, food, moving/storage, and even pet lodging!
With so many things that can go wrong during closing, delays are almost inevitable. Doing your research, planning ahead and protecting yourself ahead of time will help you best handle these kinds of delays.
*Note: Due to the ever-changing news and containment actions in response to the coronavirus outbreak, coverage may be limited or excluded. Insure My Closing’s policies do not cover medical bills or expenses. To request more information about our product, contact us today.