What Can Go Wrong In A Real Estate Transaction?
It is a wise client who prepares for problems before they ever happen. We also believe this to be true in our business.
A transaction is not complete until papers are signed at closing. There are many potential issues that could arise in what may seem like the easiest of sales. The key is to work through the issues and make it to the closing table.
We have experienced many of these issues first hand and have lived to talk about it. Let us be your guide throughout the entire transaction so you don’t have to worry about anything but when to celebrate your move!
Here are many of the most common problems that can come up during a real estate transaction.
Lender doesn’t properly qualify Buyer.
Lender decides last minute they don’t like the Buyer or the property.
Lender orders a second property appraisal or requires last minute repairs to home before issuing final loan commitment.
Lender raises rates, points or closing costs just prior to closing either disqualifying Buyer for purchase or upsetting Buyer enough to walk from deal.
Buyer doesn’t qualify because of late or additional information received.
Lender gets information from Buyer in bits and pieces, missing key deadlines to close on schedule.
Lender loses file.
Loan Officer relocates to another company and no one wants to finish the deal.
Buyer doesn’t like fine print, pre-payment penalties and other undisclosed fees in documents received minutes prior to closing.
Lender has gone into bankruptcy and can no longer fund the loan.
Previous closing company improperly records deed.
Previous closing company forgets to or improperly records mortgage payoff with previous bank or County Recorder.
Tax liens on Seller or property not being discharged or recorded.
Court judgments, pending sewer or condo association betterments not being discharged or recorded.
Power of Attorney, Wills & License to Sell Estate Affidavits, and Bankruptcy Papers not received in time to close.
No legal representation for either of the parties of sale.
Home Inspector scares the Buyer with the tone of their comments during inspection.
Home Inspector finds numerous small or minor repairs that overwhelm the Buyer.
Major problems with roof, heating systems, plumbing and electrical or any other structural or necessary systems are discovered.
Water Quality or Quantity Tests fail.
Smoke Detector Inspection fails.
Septic Inspection fails.
Board of Health, Conservation Commission, Department of Environmental Protection and/or Army Corps of Engineers doesn’t approve Engineers plans in time to close.
Contractors hired to repair agreed upon issues perform unacceptable work to the Buyer.
Contractors don’t meet deadlines for completion of work.
Radon/Mold test fails.
Seller doesn’t inform anyone foreclosure or bankruptcy proceedings have started.
Seller refuses to comply with lender paperwork requirements or repair issues requested by bank.
Seller doesn’t disclose known problems or issues with the home prior to inspection.
Seller doesn’t vacate tenants or premises on time –
Property still has Sellers personal property, belongings or debris in yard at final walk-through just prior to closing.
Seller doesn’t disclose pending Sewer or Condo Assessments that Buyer will be responsible for.
Seller doesn’t schedule Title V inspections or new system design and installation in time to close.
Sellers Mortgage payoffs, liens and closing costs exceed sales price.
Seller can’t find new home to purchase and decides not to sell.
Buyer finds another home they would rather purchase.
Buyer researches local schools & crime information and decides to withdraw fromcontract.
Buyer is advised by family member or co-worker not to buy your home or in your community.
Buyer goes on shopping spree for furniture or remodeling supplies for your home, their credit score drops and they no longer qualify for the loan.
Buyer quits or loses job prior to closing.
Buyer decides to get a divorce during transaction.
Buyer panics looking at all of the repair and other costs and risks involved with purchasing and decides to keep renting.
Lender requires flood insurance for new Buyer on home that has never previously needed it.
Insurance company denies coverage on property within 5 miles of Ocean and State Fair plan rates and paperwork upset Buyer.
Lender doesn’t get mortgagee clause to Insurance Agent in time to close.
Buyers bounce or don’t get check to Insurance Agent in time.
Insurance coverage purchased by the Buyer doesn’t match Lender requirements.
Contractor falls behind on schedule due to sub-contractor delays, material delivery delays, local building inspection delays, weather delays and Buyer change orders.
Occupancy Certificates aren’t approved.
All orders of conditions from Conservation Commissions and other local boards are not met.
Final Bank appraisal and Buyers punch list of repairs are not completed in time.
Acts of God
Fire to home, flood, earthquake, hurricane damage, damage from fallen tree on home, home struck by lightning, death or serious injury to any of the parties involved.
Buyer or Seller arrested, deemed incompetent to sign by a court of law, or begins bankruptcy or divorce proceedings during transaction.