When you sign a contract to buy a home, you might expect to close on the closing date. That doesn’t always happen — perhaps more often than you’d think. Here are some of the most common reasons closing dates are delayed.
Even with a pre-approval, there’s still work to be done on a mortgage between the deal being made and the closing. The bank needs to do final approvals, and in rapidly changing market conditions, the bank may even have changed their lending criteria since giving the pre-approval. Finally, there’s always the chance of a buyer jumping the gun and opening a new credit card before the mortgage is finalized.
A home inspection might find a serious problem, or it might find a problem worth a few hundred dollars that the seller and buyer can’t agree on even if it means risking the entire deal. No matter what the cause, nothing is moving forward until repairs are done, the purchase price is adjusted, or both sides agree the problem is minor enough to ignore.
The Bank is Too Busy
Sometimes the bank, or someone else involved in the deal, is just too busy to get things done. This often happens on Fridays, the last day of the month, and the 15th of the month. As people rush to get their deals done by their own deadline, the bank gets overwhelmed and can’t process everything in time. This means waiting until the next business day or even a few days after that.
The buyer and seller hopefully did their homework before agreeing on the price, but the bank needs to agree as well. The bank will send out their own appraiser to verify the home’s value supports the loan. If the bank’s appraisal comes in low, you could end up scrambling for a new appraiser or having to restructure the deal.
What to Do if Your Closing Gets Delayed
The good news is that even when a closing gets delayed, both the buyer and seller are still usually wanting to get the deal done. Dealing with a slight delay is almost always better than starting over from the beginning. Even so, the buyer may be facing additional costs, such as hotel or other lodging, pet boarding, extra food expenses, storage costs, or other expenses if they can’t close and move in. Insure My Closing helps to protect against these costs, so the buyer can finish the deal without worrying. Contact us now to learn more!