Buyers and sellers typically plan to meet the closing deadline in good faith. In some parts of the country, there are no consequences for closing delays, while in others, a few days’ delay is allowed without ill effects. However, delays most often involve a monetary penalty or require some negotiation.
One closing will frequently have an effect on many others. If a seller is simultaneously trying to buy a home, and their purchase closing can’t happen until they sell, and then their seller needs to close to buy, the situation can get tricky.
When this happens, tempers flare. Keep this in mind when signing a contract, either as a buyer or seller. Don’t commit to a date if you have any doubt about your ability to meet that deadline.
Once you have a closing date set, here are four steps you can take to ensure the process doesn’t get delayed.
Have your agent watch for problems
Once a property is under contract, the buyer’s agent should check in with all parties at least twice per week, if not more. Because a good agent has completed so many transactions, they know to be on the lookout for any transactional surprises or changes.
Both the buyer’s and seller’s agents should identify potential problems before they happen, and put a plan in place to solve them.
Keep lenders in the loop
Buyers should check in with their lender regularly. Today banks require so much paperwork — and sometimes need the same information over and over.
If your mortgage professional asks for follow-up documentation, get it to her right away. If one document — or even one signature — is missing, it can hold up the closing.
What’s worse is if you have a rate locked and a delay occurs. You could lose your rate and be forced to re-lock at a higher rate, not to mention delay the seller — and potentially their purchase.
Beware last-minute seller surprises
Sellers can sometimes cause bumps in the road by not being able to move out in time, or failing to make the agreed-on fixes.
If the seller agrees to make repairs prior to closing, put a deadline on those repairs. No matter how big or small the fix, you don’t want to show up at the walk-through to see the seller doing the work. Ask for the work to be completed a week before the closing, and put it in writing.
It’s common for buyers to be unsatisfied with repairs when the seller is done. If you leave time for any follow-up on the repair work, you can avoid delays.
Keep your finances stable
Buyers obtaining financing should not make any major changes before closing. The littlest change can affect your ability to close. If you purchase a car or apply for a new credit card between the time you sign a contract and close, that debt will affect your loan. If you change jobs, you could lose the loan or delay your purchase.
Nine times out of ten, delays can be avoided by planning. Staying on top of all parties and aspects of the transaction should assure an on-time closing.
Once in a great while, something comes out of left field, and no planning could have prevented it. When that happens, notify all parties and tackle the problem head-on as soon as possible.
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- 5 Mistakes That Delay Mortgage Approvals (and How to Avoid Them)
Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.
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