Common Barriers to Real Estate Settlement

The offer is in and accepted, the closing date set. The bank has approved the loan and it seems like smooth sailing from here. All that remains is for your clients to sign on the dotted line and hand over or accept the keys. Sound about right? In a perfect world, maybe, but we all know that factors beyond (anyone’s) control almost always produce some barriers to closing. Here’s a closer look at some of those more common.

Obstacles Common Among Delayed Closings

  1. Defects on title discovered: Problems surrounding boundary issues, unresolved seller liens, unknown heirs or illegal deeds, among others, can all prolong the closing date until such obstacles are resolved.
  1. Problems missed by appraiser arise prior to closing: Repairs overlooked or undervalued by an appraiser may indeed require repair by the bank before settlement. Issues may include interior and exterior paint, leaks and cracks along with roofing, air conditioning or heating problems.
  1. Incomplete documentation: Any documentation pertinent to the real estate transaction determined incomplete by the lender must be fully and satisfactorily submitted before closing can occur. Such paperwork might include information missing from the loan application, complete list of debts or assets, or full disclosure of income.
  1. Delayed inspection or homeowner’s insurance documents: For the loan to fund, a myriad of documents, among those home inspection and homeowner’s insurance paperwork, must fall into the right hands prior to closing. Getting ahead of the game and guiding your clients to do the same saves time and stress when closing is days (or hours) away.
  1. Communication breakdown: For a successful, smooth closing, all parties must be transparent in their actions, working symbiotically to move the transaction forward in a timely manner. Fluidity of communication, among all parties, cannot be overstressed enough.

Staying abreast of the process and knowing exactly where it is along the path towards settlement can do wonders for the stress level of your clients, and yours as well. After all, you are the tether to which clients cling throughout the (often) tumultuous home buying process. Having a broad knowledge of the potential mishaps and obstacles potentially threatening that golden closing date helps mitigate such events, bringing you, your clients and those privy closer to the smooth ride we all hope for.

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