Potential Deal Killing Problems #1

It is the wise seller, selling their own home, who prepares for problems before they happen! I also believe in this concept for my business! For this reason I would like to share my problem checklist that keeps me busy every day and will make you cautious before signing anything! Since no escrow is closed until it is closed, the following items are your potential roadblocks. 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 asterisks (*) are potential deal-killers.

LENDER PROBLEMS:

  1. Lender does not properly pre-qualify borrower ~ 2 weeks or *
  2. Lender decides last minute they don’t like the borrower ~ 2 weeks or *
  3. Lender decides last minute they don’t like the property ~ 2 weeks or *
  4. Lender wants property repaired or cleaned prior to close ~ 1 to 3 weeks
  5. Lender raises rates, points, or costs ~ 2 weeks or *
  6. Borrower does not qualify because of a late addition of information ~ 2 weeks or *
  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 or *
  9. Lender loses file ~ 1 to 3 weeks
  10. The lender does not simultaneously ask for info. from the buyer, they ask for information in bits and pieces ~ 1 to 4 weeks

BUYER PROBLEMS:

  1. Did not tell the truth on loan application ~ 1 week or *
  2. Did not tell the truth to their agent ~ 1 week or *
  3. Submits incorrect tax returns to lender ~ 4 weeks or *
  4. Lacks motivation ~ 1 week or *
  5. Source of down payment changes ~ 1 week or *
  6. Family members do not like purchase ~ 1 week or *
  7. Is too picky regarding condition ~ 1 week or *
  8. Finds another property that is a better deal ~ 1 week or *
  9. They are “nibblers” (always negotiating) ~ 1 week or *
  10. The buyers bring an attorney into the picture ~ 2 weeks or *
  11. They do not execute paperwork in a timely manner ~ 3 weeks or *
  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 setback ~ 3 weeks or *
  14. Comes up short on money ~ 1 week or *
  15. Does not obtain insurance in a timely manner ~ 1 to 4 weeks

ESCROW PROBLEMS:

  1. Fails to notify agents of unsigned or unreturned documents so that the agents can cure the problems relating to same ~ 1 week or *
  2. Fails to obtain information from beneficiaries, lien holders, title companies, insurance companies, or lenders in a timely manner ~ 1 week to *
  3. Lets principals leave town without getting all necessary signature ~ 1 to 2 weeks
  4. Incorrect at interpreting or assuming aspects o the transaction and then passing these items onto related parties such as lenders, attorneys, buyers and sellers ~ 1 week to *
  5. Too busy ~ 1 to 3 weeks
  6. Loses paperwork ~ 1 to 3 weeks
  7. Incorrectly prepare paperwork ~ 1 to 3 weeks
  8. Does not pass on valuable information fast enough ~ 1 to 4 weeks
  9. Does not coordinate well so that many items can be done simultaneously ~ 1 to 4 weeks

PROBLEMS FROM YOUR SIDE:

  1. You lose motivation (i.e., job transfer did not go through, etc.) ~ 1 week or *
  2. Illness, divorce, etc. ~ 1 week or *
  3. The home has hidden defects that are subsequently discovered ~ 1 week or *
  4. Unknown defects are discovered ~ 1 week or *
  5. Home inspection reveals average amount of small defects that you are willing to repair ~ 1 week or *
  6. You get an attorney involved ~ 1 week or *
  7. You remove property from the premises that the buyer believed was included ~ 1 to 3 weeks
  8. You are unable to clear up problems or liens ~ 1 week or *
  9. You have last minute solvable liens ~ 1 to 3 weeks
  10. You do not own 100% of property as previously disclosed ~ 1 week or *
  11. You thought your partners’ signatures were “no problem” but they were! ~ 1 week or *
  12. You leave town without giving anyone power of attorney ~ 1 to 4 weeks
  13. The notary did not make a clear stamp when notarizing your signature ~ 3 days to 1 week
  14. You have to delay the projected move-out date ~ 1 day or *

ACTS OF GOD:

  1. Earthquake, tornado, fire, slides, etc. ~ 1 week or *

APPRAISAL PROBLEMS:

  1. The appraiser is not local and misunderstands the market ~ 1 to 3 weeks
  2. No comparable sales available ~ 1 week or *
  3. Appraiser delays (too busy, etc.) ~ 1 to 3 weeks
  4. Incorrect appraisal ~ 1 to 3 weeks
  5. Appraisal too low ~ 1 week to *

INSPECTION COMPANY PROBLEMS:

  1. Too picky ~ 1 day or *
  2. Scares buyer ~ 1 week or *
  3. Infuriates seller ~ 1 week or *
  4. Makes mistakes ~ 1 to 3 weeks
  5. Delays report ~ 1 week or *

TITLE COMPANY PROBLEMS

  1. Does not find liens or problems until last minute ~ 1 week or *
  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 challenging time between contract, acceptance, and close. I wanted that you want to understand these potential problems for the following reason – A transaction cannot close until escrow has cleared up any and all of the previously mentioned problems.