Sometimes you find the most interesting things in your “bag of tricks.” It is wise that the seller not only prepare, but understand what problems with closings might erupt leaving their hard sought after deal dead in its tracks. For this reason I would like to share my problem checklist that keeps me busy every day. Since the transaction is not closed until you walk away from the closing table, the following items are your potential roadblocks.
Years of experience and successful closings have armed me with the tools to overcome each and every problem mentioned here. However, it would be unfair for me to say that every problem can be solved. I have placed a delay of closing estimates next to each problem and the ones with a plus sign (+) are potential deal-killers.
LENDER: DELAY:
1) Lender does not properly pre-qualify borrower 2 weeks +
2) Lender decides last minute they don’t
like the borrower 2 weeks +
3) Lender decides last minute they don’t like the 2 weeks +
property
4) Lender wants property repaired or cleaned prior 1 to 3 weeks
to close
5) Lender raises rates, points, or costs 2 weeks +
6) Borrower does not qualify because of a late
addition of information. 2 weeks +
7) Lender requires, last minute, a reappraisal 2 weeks
8) The borrower does not like the fine print in the
loan documents that are received 3 days before close 3 days +
9) Lender loses file 1 to 3 weeks
10) The lender does not simultaneously ask for info. 1 to 4 weeks
BUYER:
1) Did not tell the truth on loan application 1 week +
2) Did not tell the truth to their agent 1 week +
3) Submits incorrect tax returns to lender 4 weeks +
4) Lacks motivation 1 week +
5) Source of down payment changes 1 week +
6) Family members do not like purchase 1 week +
7) Is too picky regarding condition 1 week +
8) Finds another property that is a better deal 1 week +
9) They are “nibblers” (Always negotiating) 1 week +
10) The buyers bring an attorney into the picture 2 weeks+
11) They do not execute paperwork in a timely manner 3 weeks +
12) They do not deliver their money in a “check cleared”
fashion to the closing agent 1 to 2 weeks
13) Job change, illness, divorce, or other financial 3 weeks +
setback
14) Comes up short on money 1 week +
15) Does not obtain insurance in a timely manner 1 to 4 weeks
SELLER:
1) Loses motivation (i.e., job transfer did not go
through, etc.) 1 week +
2) Illness, divorce, etc. 1 week +
3) Has hidden defects that are subsequently discovered 1 week +
4) Unknown defects are discovered 1 week +
5) Home inspection reveals average amount of small
defects that seller is unwilling to repair 1 week +
6) Gets an attorney involved 1 week +
7) Removes property from the premises that the
buyer believed was included 1 to 3 weeks
8) Is unable to clear up problems or liens 1 week +
9) Last minute solvable liens are discovered 1 to 3 weeks
10) Seller did not own 100% of property as
previously disclosed 1 week +
11) Seller thought partners’ signatures were 1 week +
“no problem” but they were!
SELLER: DELAY:
12) Seller leaves town without giving anyone power
of attorney 1 to 4 weeks
13) The notary did not make a clear stamp when
notarizing the seller’s signatures 3 days -week
14) Seller delays the projected move-out date 1 day +
ACTS OF GOD:
1) Earthquake, tornado, fire, slides, etc. 1 week +
THE APPRAISAL:
1) The appraiser is not local and misunderstands
the market 1 to 3 weeks
2) No comparable sales available 1 week +
3) Appraiser delays (too busy, etc.) 1 to 3 weeks
4) Incorrect appraisal 1 to 3 weeks
5) Appraisal too low 1 week +
INSPECTION COMPANY:
1) Too picky 1 day +
2) Scares buyer 1 week +
3) Infuriates seller 1 week +
4) Makes mistakes 1 to 3 weeks
5) Delays report 1 week +
TITLE COMPANY:
1) Does not find liens or problems until last minute 1 week +
2) Does not bend rules on small problems 1 to 3 weeks
3) Poor service 1 to 3 weeks
4) Loses paperwork 1 to 2 weeks
I appreciate the time you have spent to understand the challenges that can result which can waste a lot of time between contract, acceptance, and close or cost you the deal completely. It is my goal to help educate potential sellers in understanding these potential road blocks for the following reasons:
* A transaction cannot close until the parties have cleared up any and all of the previously mentioned problems.
Once again, please feel free to contact me if you need any help. I would be happy to speak with you and answer any questions I can.
I look forward to hearing from you.
