How To Keep The Closing Process from Stalling Out When You’re Selling or Buying a Home

by Carson BuckSeptember 7, 2016

Is Your Home Sale Stalling? Here’s How to Get It Back on Track

Ask any home buyer or seller which part of the process they dislike most, and you can expect just about all of them to respond with “the closing.” In most cases, dislike for the closing process tends to revolve around one common element: delays. But delays are inevitable in home purchases because even though the terms and conditions included in a real estate contract are important, they are not always concrete.

The truth is, a real estate deal involves several different parties and with so many moving parts, delays should be expected. Here are some of the most common reasons why closings get delayed and what you can do to keep your deal moving forward.

How To Keep The Closing Process from Stalling Out When You're Selling or Buying a Home

#1: Unrealistic Contract Dates

Using an experienced real estate agent is important because one of the biggest mistakes an agent can make is setting unrealistic contract dates for the sale. In most cases, it takes anywhere from 45 to 60 days for a closing to occur after an offer on a home is accepted by the buyer. This provides the buyer with enough time to secure financing, and the seller to take care of any contingencies agreed to in the negotiations. To schedule a closing for any time shorter than that will almost always result in delays.

#2: Problems With the Bank Appraisal

The bank appraisal process is one of the most important parts of the home buying process, but it is also one of the most common causes for closing delays to occur. And, there are several reasons why this can happen. For instance, the bank appraisal may determine that the home was under-appraised at the time the agreement was made between the seller and the buyer. As such, a new agreement would have to be struck, the negotiations of which could delay the closing date.

#3: Problems With the Title

This happens all too frequently. A home sale is agreed upon, and then during the title search, it is discovered that the home has previous liens on it, essentially making the home un-sellable. The only way you can avoid this problem and ensure that the title on the home is clean is to hire a real estate attorney.

#4: Different Closing Figures

Before closing, both the buyer and the seller receive their closing figures. The closing statement, which has been traditionally known as the “HUD-1 Settlement Statement,” is not always considered accurate by one or both parties. The industry is making strides to change the document so as to eliminate this popular cause of closing delays. As of October 2015, the HUD-1 Settlement Statement, as well as the Good Faith Estimate, have been replaced by the closing disclosure and loan estimate document.

#5: Problems With the Land Survey

An instrument survey is the drawing of the land on which the property being sold sits, and it is designed to show the legal borders of the property being purchased. In some cases, the closing can become delayed due to a discrepancy with the land survey.

For instance, the property border shown on the document might be encroaching over a neighbor’s property line. This is another issue where having a real estate attorney on your side could help you avoid a potential problem that could result in a closing delay.

How To Keep The Closing Process from Stalling Out When You're Selling or Buying a Home

#6: The Lender Needs Additional Documents to Approve Financing

Many buyers misunderstand what it means to be pre-approved for their mortgages. Most think that the pre-approval means that the loan is guaranteed and everything will be ready to go at closing. But the reality is that even with a mortgage pre-approval, the lender will always review the case again right before closing to see if anything significant has changed in the buyer’s credit report or bank statements.

If the lender sees something that worries them, they will ask for additional documents, and this will almost always cause a delay in closing. To avoid this, try to keep everything as it was when you were pre-approved for your mortgage. This means: don’t open up any new lines of credit, don’t change jobs, don’t make any questionable deposits or withdrawals from your bank account, etc.

#7: The Seller Didn’t Complete Agreed-Upon Repairs

Sometimes in order to sell a house at the agreed-upon price, a homeowner might need to agree to repair certain problems in the home. By the time of closing, all of these repairs need to be completed or the buyer may choose to delay the proceedings until all of the agreed-upon repairs are complete or they could back out completely.

If you’re buying a home and the seller has agreed to make repairs, then your real estate agent should be ensuring that the repairs are being made so the closing date remains true.

#8: Problems Discovered During the Final Walk Through

The final walk through is the last chance the buyer is going to have to see the home before the closing date. Therefore, the buyer needs to go over everything with a fine toothed comb. Sometimes, a buyer finds a problem that was missed earlier, like the HVAC isn’t working or one of the appliances is broken. When this happens, the closing process stalls until the appropriate action can be completed.

#9: One or More of the Real Estate Professionals Causes the Delay

As stated earlier, there are a lot of people involved in a real estate sale, and sometimes, one or more of these professionals could cause a closing delay. For instance, the real estate agent might not have returned the signed documents to the lender in time. Or, the bank appraiser doesn’t schedule a re-inspection to confirm that the bank-required repairs were made.

#10: The Mortgage Application Is Denied By the Lender

In the worst case scenario for both the buyer and the seller, the buyer’s mortgage application gets denied by the lender. This forces the seller to try and find another buyer, and the entire process starts all over again.


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About The Author
Carson Buck
Carson is a real estate agent based out of Phoenix, Arizona. Carson loves data and market research, and how readily available it is in today's world. He is passionate about interpreting these insights to help his clients find and buy their perfect home. Carson got into the real estate industry because he loves the feeling of handing over the keys to a new home to happy clients. In his free time, he works on his backyard bonsai garden and spends time with his wife, Julia.
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