By Marc Shaw
Whether you are buying or selling real estate, closing day is a day to look forward to. For buyers, it’s the day when deeds and keys exchange hands, and for sellers, it’s the day they receive the proceeds from their sale. Of course, completing a real estate transaction takes more than one day. Closing day is the culmination of a process that can take months.
As eager as you might be to get to closing day, there are a lot of things that need to happen before your sale can be completed. If all goes smoothly, your closing should take between 30 and 60 days, but if you encounter any roadblocks, it could take longer. As a buyer or seller, you should be prepared for this possibility. Here are some of the most common reasons why a real estate closing might be delayed:
Although many buyers can afford to pay a lump sum of cash for their purchase, most will need to secure a loan before a real estate deal can go through. Many issues can arise during this process. For example, the loan underwriter may require certain conditions to be met before they will finalize the loan. They might need additional documents to prove your employment status or your income; they may want you to have more cash in reserve. No matter the lender’s requirements, they could tack on a few more days or even weeks to the closing process.
Errors in preparing the loan documents could also slow up the process. Even something simple like a misspelled name or a typo on the loan amount will need to be corrected before any paperwork can be signed. Correcting these issues could take days or even longer.
If the buyer and seller have agreed to a home inspection, any issues that come up will need to be resolved before the property can change hands. Major problems could take months to fix, like if the inspector finds that a leaky roof has caused significant water damage to the home. Such damage might even make the home uninhabitable. There’s no telling how long it might take to fix damage like this, and it might even cause the buyer to back out of the deal entirely. Of course, an inspector might also identify smaller issues like termite damage or elevated radon levels in the basement that can be resolved in a few days.
Before a property can be sold, a title search will need to be conducted, and any outstanding title defects will need to be resolved. These could include unpaid liens, errors in public records, forged documents in the title chain, and more. Some title defects, like property line disputes or access issues, might take several weeks to resolve. In a worst-case scenario, a third party might make a competing claim of ownership of the property. This can happen on foreclosed properties or properties that were previously owned by a person who passed away. Competing claims like these will need to be resolved in court, which could take months or even years!
As a real estate seller, you may not be able to afford any delays in your closing. If you have already purchased another property and moved in, you could end up being responsible for paying two mortgages while the delay is worked out. While you can’t necessarily prevent delays related to loan issues or problems with the inspection, you can absolutely protect yourself from the costs associated with title defects. Whether you just bought a new property or you are getting ready to sell, it’s never too late to purchase an owner’s title insurance policy.
With your policy in place, you can be protected from many types of title defects that were not discovered during the time you owned the property, like those that might come up when the new buyer has a title search conducted. When you work with a title insurance company, many types of title defects can be identified and resolved quickly, without much effort on your part, so that you won’t have any long delays in your closing process.
If you are planning on buying or selling a home soon and don’t have owner’s title insurance coverage, get in touch with World Wide Land Transfer today! We can help you find title insurance in Baltimore, MD, and in other communities all around the country.
World Wide Land Transfer is a service-oriented PA title company with offices in Philadelphia, New York, and Washington, D.C. With a record of going above and beyond, we are trusted to close everything from complex commercial transactions to residential refinance and purchase transactions.
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