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| What
Can Go Wrong at Closing? |
There
are many reasons a closing may not happen on the assigned
day or be delayed. It is important that you understand
these reasons in the event that you land in such a situation.
Money Problems
The estimate of the buyers closing costs may have been
inaccurate and the cashiers check brought to the closing
may be short. This should not happen if the buyer is dealing
with a reputable lender but is still possible. The lender
and title company do not take personal checks so the buyer
may have to run across town and get another cashiers check.
Loan Problems
If the loan package for the buyer is not there or some
of the documents are missing, you will not be closing
until they arrived. If there is an error on the documents
such as the interest rate agreed between the buyer and
lender is incorrect. The buyer will need to get this corrected
by the lender prior to closing. If the lender does not
approve the loan in the first place, the buyer may be
unable to buy the house. You may want to get progress
reports on the status of the buyer's loan application
so you are aware early if there are any issues.
Final walk through problems
If the final walk through was agreed upon and is on the
sales contract and some issues arise during this walk
through such as damages or missing items, the buyer or
his agent or attorney may bring these up at closing. You
or your agent or attorney will need to negotiate with
the buyer in order to close, as the buyer will not probably
wish to close until these issues are dealt with.
Title Problems
Last minute title problems may arise. There may be a lien
on the property or another person has a claim on the property
or the taxes have not been paid. These issues need to
be resolved prior to closing.
Appraisal Problems
If the appraisal comes in much lower than the selling
price, the lender may not approve the buyer loan application.
Generally a lender will approve a loan for a certain percentage
of the appraised value -- 85 % is usual. In this case,
one of two things needs to happen -- the seller will either
need to lower the asking price or the buyer will need
to come up with more money.
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