Closing Delays

Lender:

  1. Lender does not properly pre-qualify borrower – 2+ week delay*
  2. Lender decides last minute they don’t like borrower – 2+ week delay*
  3. Lender decides last minute they don’t like property – 2+ week delay*
  4. Lender wants property repaired or cleaned prior to close – 1 to 3 week delay*
  5. Lender raises rates, points, costs – 2+ week delay*
  6. Borrower does not qualify because of late addition of information – 2+ week delay*
  7. Lender requires last minute re-appraisal – 2+ week delay*
  8. The borrower does not like the fine print in the loan documents received three day before close – 3+ day delay*
  9. Lender loses file – 1 to 3 week delay
  10. The lender does not simultaneously ask for information from the buyer, they ask for information in bits and pieces, this infuriating the buyer – 1 to 4 week delay

The Cooperative Agent:

  1. Won’t return phone calls – 1 to 3 day delay
  2. Transfers to another office – 1 week delay
  3. Did not pre-qualify the client for motivation – 2+ week delay
  4. Does not understand or lacks experience in real estate – 1+ week delay*
  5. Poor people skills – 1 to 3 week delay
  6. Gets client upset over minor points – 1 to 3 week delay*
  7. Does not communicate with their client – 1 to 4 week delay

The Buyer:

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

Escrow:

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

Seller:

  1. Loses motivation (i.e. job transfer did not go through, etc.) – 1+ week delay*
  2. Illness, divorce, etc. – 1+ week delay*
  3. Has hidden defects that are subsequently discovered – 1+ week delay*
  4. Unknown defects are discovered – 1+ week delay*
  5. Home inspection reveals average amount of small defects that seller is unwilling/willing to repair – 1+ week delay*
  6. Gets attorney involved – 1+ week delay*
  7. Removes property from premises that buyer believed was including during closing process – 1 to 3 week delay
  8. Is unable to clear up problems or liens – 1+ week delay*
  9. Last minute, solvable liens are discovered – 1 to 3 week delay
  10. Seller did not own 100% of property as previously disclosed – 1+ week delay*
  11. Seller thought partners signatures were “no problem”, but they were – 1+ week delay*
  12. Seller leaves town without giving anyone power of attorney – 1 to 4 week delay
  13. The notary did not make a clear stamp when notarizing t he seller’s signature – 3 day to 1 week delay
  14. Seller delays the projected move-out date – 1+ day*

Acts of God:

  1. Earthquake, tornadoes, fire, mudslide, hurricane – 1+ week delay*

The Appraisal:

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

Inspection Company:

  1. Too picky – 1+ day delay*
  2. Scares buyer – 1+ week delay*
  3. Infuriates seller – 1+ week delay*
  4. Makes mistakes – 1 to 3 week delay
  5. Delays report – 1+ week delay*

Title Company:

  1. Does not find liens or problems until last minute – 1+ week delay*
  2. Poor service – 1 to 3 week delay
  3. Loses paperwork – 1 to 2 week delay

Fifteen Contract Contingencies You Should Be Aware Of

Following is a list of fifteen contract contingencies that any seller should be aware of in regards to a purchase contract for their home. Many of these contingencies can make or break any transaction.

  1. Building inspection contingency
  2. Survey and flood plain contingency
  3. Stigmatized property contingency
  4. Accountant review and approval contingency
  5. Environmental hazards contingency
  6. Planning department approval contingency
  7. Lead paint contingency
  8. Loan approval contingency
  9. Attorney review and approval contingency
  10. Title inspection contingency
  11. Occupancy permit contingency
  12. Sale and/or closing of current home contingency
  13. Appraisal contingency
  14. Termite/pest inspection contingency
  15. Subject to someone else’s signature contingency

Home Buying: Closing

You are starting to feel the excitement build, your closing date is quickly approaching. Outside of your final walk-through, there are only a couple more things that need to be done – reviewing your Final Closing Statement (HUD-1 Statement). Go over the calculations and make sure that the closing statement matches as closely as possible to the good faith estimate your lender gave you towards the beginning.

You will also need to review the preliminary title report given to you by the escrow company. You need to make sure that the title company has your personal information correct, along with other going onto title with you.

When it comes time to sign escrow paperwork, you will need to being in a cashier’s check for your portion of closing costs. The title company will tell you how much your will owe for the down payment, loan origination fees, points, appraisal fee (if being paid through escrow), credit report (if being paid through escrow), private mortgage insurance premiums, homeowner’s insurance, property tax, deed recording, title insurance policy premiums, inspections feed (if being paid through escrow), notary fees, and any proration’s.

After completing the signing, you patiently wait for that phone call to come in from your agent. The phone finally rings and it is your agent on the other end congratulating you on the successful purchase of your new home. You work out all the details about how you are to get your new keys and so on. There is one thing that may not get discussed, but is important, and that is what needs to be kept after your escrow does close.

It is required through RESPA (Real Estate Settlement Procedures Act) that you receive the HUD-1 Statement, itemizing all the costs associated with the closing. You will need this statement for income tax purposes.

Home Buying: Title Insurance

The concept of title insurance can be very confusing. There are three characteristics that make up title insurance: (1) It protects ownership rights from both fraudulent claims against ownership and from mistakes made in earlier sales (mistakes in spelling of a name or inaccurate property description); (2) It is a one-time cost based on the sales price of the property; (3) there are both lender title policies (which protect the lender) and owner title policies (which protect the owner). Overall, title insurance can insure against devaluation or cloud on title that may occur because of incorrect information provided by the title company.