Out of the delayed contracts, the most common causes were financing issues (37%), followed by appraisal issues (18%) and inspection issues (16%).<\/p>\n
So the answer to \u201chow long does it take to close on a house?\u201d is not a simple or finite one. You may encounter opposition along the way, but with the right preparation and foresight, you can deflect and move right past it. These are the top home closing delays that could affect if and when you close on your new home, and how to overcome them.<\/p>\n For most buyers, financing a home through a bank or lender with a mortgage loan<\/a> is necessary to purchase the property. Because the entire sale hinges on securing this loan, it is a top criteria for closing, and it\u2019s also the most common reason for a delay in the closing process.<\/p>\n There are several ways that obtaining a loan by the closing date can be challenging. Interest rates can spike unexpectedly which can affect qualification if the loan is not locked, or the buyer\u2019s credit score or income can change, causing the underwriter to reject the loan. If the lender can\u2019t grant the buyer a loan by the closing date, the contract could be canceled or expire if the seller does not agree to an extension.<\/p>\n The best way to help avoid mortgage loan setbacks is to get preapproved<\/a> for one before even submitting an offer. In fact, buyers should go one step further (if they can) and get pre-underwritten for a loan<\/a>, which offers even more security for both buyers and sellers.<\/p>\n Not only will this give the seller additional confidence in accepting the offer, but it will help you get a quick and smooth loan approval once you\u2019ve entered the purchase contract. To protect against a delayed or derailed loan approval, the buyer should include a financing contingency in the real estate contract so they can back out with their earnest money<\/a> returned if something unexpected happens (such as losing a job).<\/p>\n Lenders providing mortgage loans require an appraisal<\/a> to confirm that the actual value of the home is at least equal to the loan amount. However, sometimes buyers submit an offer that\u2019s higher than the appraisal value.<\/p>\n Because the loan will only cover the appraisal amount, if the appraisal comes in lower than the offer price, the buyer will need to renegotiate with the seller or come up with the extra money themselves, which they may not want (or be able) to do. Likewise, the seller may not agree to lower the price of the home.<\/p>\n Another option would be to request a second appraisal<\/a>. No matter what course buyers and sellers choose in this scenario, a low appraisal can set back the timeline or possibly lead to termination of the contract.<\/p>\n If you love the home and are not worried about its specific value, an easy way to avoid a low appraisal blowing up a deal is to buy the home outright with cash instead of financing it, in which case an appraisal is unnecessary. That said, you have to be careful with this option as you risk buying a home that is overvalued.<\/p>\n If that\u2019s not an option, the buyer can:<\/p>\n If this problem can\u2019t be resolved, an appraisal contingency<\/a> in the contract allows the buyer to cancel the agreement and retain their earnest money deposit<\/a>.<\/p>\n The home inspection<\/a> is one of the most important steps in the purchase process and one of the strongest variables that can affect closing. Although this is frustrating to homebuyers, it illuminates pressing issues that buyers must address before purchasing the home instead of waiting to discover them weeks or months after closing.<\/p>\n Accomplishing this step requires hiring a qualified inspector<\/a> to assess the property for any damage and identify necessary repairs before purchasing the house.<\/p>\n Major repairs that come up during the inspection, like foundation issues and pest infestations that are costly enough to reconsider the offer price, require renegotiating the contract. There also may be minor issues that come up, but usually those are better handled by the buyer.<\/p>\n The good news is that the buyer has options when the inspection reveals major repairs needed, so it\u2019s not a deal-killer. Those include:<\/p>\n If all else fails and the repairs are too significant, it\u2019s important to have an inspection contingency<\/a> in the contract that allows the buyer to cancel the deal after evaluating the inspection report without losing their earnest money deposit.<\/p>\n There are many issues that can arise from a title search on a home for sale \u2014 some small, some big \u2014 that must be addressed before the property can be legally transferred to the new owner. A title search of public records (typically going back 50 years) can reveal common property title discoveries<\/a> tied to the house, such as a contractor\u2019s lien, an active bankruptcy of the seller, taxes on the home still owed, or a child support lien, to name a handful.<\/p>\n While resolving a contractor\u2019s lien is fairly typical, it can cause a closing delay if the contractor cannot be located to settle it. Additional remediation required by the title company may take more time beyond the closing date, causing a contract extension.<\/p>\n Minimizing clouds in a title search requires the seller to be proactive. That means they should pay off any debts they have associated with the house and sit down with a real estate attorney to review all the pertinent documents for red flags before even putting the house on the market.<\/p>\n Buyers should also consider purchasing title insurance in case the title search misses something and a property claim is made after closing.<\/p>\n While not legally required for every home sale, obtaining a mortgage loan is contingent on having homeowners insurance<\/a>. A bank or lender requires homeowners insurance in case the home is damaged or destroyed by a natural disaster or any other unexpected event to protect themselves and the owner.<\/p>\n If the buyer is financing the home, the lender will not grant a loan without proof of homeowners insurance. Also, in many cases, the buyer must present homeowners insurance on the closing date to complete the sale.<\/p>\n The cost of homeowners insurance depends on the purchase price of the home. Buyers should budget accordingly and start shopping for a policy as soon as the purchase agreement<\/a> is signed.<\/p>\n If the buyer enters the purchase contract before selling their current home, they can include a home sale contingency that gives them a certain amount of time for the sale to close before moving forward with the new home purchase.<\/p>\n In other words, the buyer has to sell their current house before they can close on the new house.<\/p>\n If the buyer\u2019s home doesn\u2019t sell by the agreed-upon date or for at least the asking price, the buyer can back out of the contract. Having the home sale contingency<\/a> in the contract already pushes back the closing date, and if the home doesn\u2019t sell in time, the deal could fall through entirely.<\/p>\n If the buyer is otherwise a good candidate, the seller may decide to move forward with the contract but add their own kick-out clause. This is a safeguard for the seller if they find another buyer who is ready to purchase the home.<\/p>\n If the kick-out clause is activated, the current buyer has the option to remove the home sale contingency and move forward with closing. If not, the seller can back out of the contract.<\/p>\n A short sale<\/a> is when a mortgage lender agrees to accept a lower payoff amount than the remaining balance owed on a home. Usually this happens when the owner can\u2019t fulfill the balance due to a proven hardship, or the housing market has fallen to the point where the home is worth substantially less than it was at the time of purchase.<\/p>\n The lender must approve a short sale offer in advance, and this is a much more complicated and often lengthy process than a normal mortgage. It can take weeks to months for the lender to approve a short sale.<\/p>\n In a short sale, inking the deal requires three parties to agree: the buyer, seller, and lender. But that doesn\u2019t mean there\u2019s nothing buyers and sellers can do to increase the chances of lender approval.<\/p>\n Both the buyer and seller should know what they\u2019re getting into ahead of time, and work together with their agents to create a short sale package that will be attractive to the lender. And of course, each should work with a real estate agent who is experienced in short sale arrangements.<\/p>\n Selling a home when there\u2019s a lien on the home left to pay off is probably due to some unforeseen circumstances, like relocating for a job, moving for family reasons or any other curveballs life throws at you.<\/p>\n If the owner owes money on a tax lien or a contractor\u2019s lien and needs to sell the home quickly, you\u2019ll have to negotiate who\u2019s going to pay the outstanding debt \u2014 because if you close without paying it, then it becomes your responsibility.<\/p>\n The title search should help surface any debts or liens on the property apart from the mortgage loan. If the title search misses something, the buyer will be on the hook for the debt unless they\u2019ve purchased title insurance.<\/p>\n The cost of buying a new home doesn\u2019t end with the offer. There are also closing costs<\/a> to consider, which can add up to 5% of the total loan amount<\/a>.<\/p>\n If buyers haven\u2019t budgeted for closing costs to buy a house, they may be in for a surprise. This could threaten their financial ability to purchase the home or lead to further negotiations with the seller.<\/p>\n If the closing costs present barriers to closing, seek out ways to lower them<\/a>, like shopping around for less expensive vendors involved in the closing process by utilizing the Loan Estimate form provided by the lender.<\/p>\n Another strategy, especially in a buyer\u2019s market, is to ask the seller to contribute to the closing costs.<\/p>\n Hiring a licensed and experienced real estate agent<\/a> is invaluable to both the buyer and seller in the home purchase process. Not relying on their expertise for guidance and negotiations through each step could result in huge missed opportunities.<\/p>\n It should be clear by now that buying and selling a house is a complex endeavor! That\u2019s why it\u2019s the real estate agent\u2019s job to advise and protect their client.<\/p>\n Real estate agents can help with almost any of the issues outlined above, including identifying which repairs to ask the seller to fix after the inspection, negotiating closing costs, conducting a short sale, consulting on what contingencies to include in a contract, recommending real estate attorneys, and much more. Not taking advantage of these services could set back or derail closing.<\/p>\n At the risk of stating the obvious, hire a reputable real estate agent with a proven track record for a successful home purchase.<\/p>\n Establishing a reasonable closing date in your real estate contract sets realistic expectations for successfully completing the whole elaborate process of buying and selling a home. It takes time. Don\u2019t let impatience be your downfall.<\/p>\n If the closing deadline is too short, any complication encountered along the way \u2014 from inspection results to lender financing \u2014 will require postponing the closing date. To postpone, a new date must be proposed and approved by each party. If anyone disagrees to extending the contract, the deal is dead.<\/p>\n An experienced and trusted real estate agent will be able to set the right timeline for their client based on their assessment of the terms in the contract. Expect at least 45 days to accomplish all the necessary steps required in a home purchase.<\/p>\n A property survey<\/a> shows the boundary lines of a home determined by a qualified land surveyor. A seller might order one as an additional tool for prospective buyers. A buyer might want one to confirm that there is not a neighbor\u2019s fence or other obstruction encroaching on the property.<\/p>\n In general, any property owner might desire a survey to identify any easements allowed on the property and opportunities to build upon the property within its boundaries<\/p>\n If the property survey reveals encroachments on the property for sale, this can lead to potential cancelation of the contract. This can happen because for one, the buyer wants the rights to their entire property, and also because the title and the boundary lines might not match up.<\/p>\n If a survey proves that (for example) a neighbor has a fence or other structure on the property which is causing a conflict with the sale, you can hire an attorney to facilitate a lot line agreement. From there, a resolution could include removing the encroachment, selling the piece of land in question to the neighbor or any other recommended negotiation.<\/p>\n In other words, this is a good time to talk to a good real estate attorney.<\/p>\n The Closing Disclosure<\/a> issued by the buyer\u2019s mortgage lender is one of the documents needed at closing. If it\u2019s not presented correctly and on time, closing will be delayed.<\/p>\n Lenders must give buyers the Closing Disclosure at least three days before the scheduled closing so that the buyers can review it for any errors. So for one thing, if the lender is late delivering the Closing Disclosure, this could delay the closing.<\/p>\n In addition, all of the information in the lender\u2019s Closing Disclosure must be accurate and error-free. There are a lot of minor and major details, including names, addresses, payment amounts, terms, conditions, and more. If they don\u2019t all match up, the lender must correct and resubmit the document, thus holding up closing.<\/p>\n To proactively avoid Closing Disclosure mistakes, ask the lender for the document as early as possible to check that all information is correct<\/a>, and confirm all closing materials are received in good order with your agent before sitting at the closing table.<\/p>\n The final walkthrough<\/a> is one of the last steps before closing, and it\u2019s one of the most important. It ensures the seller has the house in the right condition according to the terms of the contract, including completing all necessary repairs, removing anything extraneous that\u2019s not supposed to stay behind; the final walkthrough also is another opportunity to look at the home\u2019s major systems, and to ensure that nothing was damaged on move-out.<\/p>\n If the final walkthrough reveals unresolved issues<\/a>, especially regarding incomplete repairs, those will have to be addressed before closing and might require further negotiation between the buyer and seller.<\/p>\n The seller should confirm all boxes outlined in the contract are ticked before the final walkthrough. If they\u2019ve failed to do this, the buyer should contact their real estate agent immediately.<\/p>\n The importance of accurate information in a home loan application is self-explanatory; this is an example of a loan approval issue, but it\u2019s a common one that buyers have some control over themselves.<\/p>\n The accuracy of details in your loan application can mean the difference between whether or not you get approved. If your name or address is misspelled or incomplete, the wrong credit history can show up in the lender\u2019s credit search and screening process. Your loan could get rejected, or you might have to start the application process over again.<\/p>\n Double- and triple-check that all information is correct in your loan application, down to hyphens and apartment numbers, before sending it to the lender for approval.<\/p>\n In the tragic event that either the buyer or seller dies in between signing a purchase contract and closing on the home, if and how the sale goes through could change.<\/p>\n If the buyer dies during the contract period, the rights and duties under the contract are passed down to the buyer\u2019s beneficiary, and they are technically still legally obligated under the terms of the contract to facilitate the purchase.<\/p>\n If the seller dies, the buyer and seller\u2019s estate are still bound by the contract, but the ownership of the property has to be established according to a will, trust, or probate, and this can cause significant delays that will often trigger the contingencies in the agreement, allowing the buyer to back out of the contract because of the extension of the closing deadline.<\/p>\n In either event, the beneficiaries of the estate are usually bound to the terms of the agreement, but the realities of dealing with probate or the settling of the estate can lead to significant delays.<\/p>\n If the seller passes away but is married, the spouse can sign the closing documents needed to complete the sale. If the seller was the sole owner, there will need to be a court representative appointed to determine the ownership of the property under the law and to manage the closing, which is likely to take more time beyond the original closing date.<\/p>\n If the buyer passes away, the seller could attempt to enforce the sale against the buyer\u2019s estate, but the success of this process is unlikely because the seller would not be able to list the house on the market while the lawsuit was active. In any scenario, hiring and consulting with a real estate attorney is crucial to navigating this unforeseen dilemma.<\/p>\n The global COVID-19 pandemic has presented a whole host of issues, including the status of real estate contracts<\/a>. In the March 2020 Realtors Confidence Index, NAR reported that 8% of contracts were terminated and 21% were delayed. Among the terminated contracts in March 2020, 45% were terminated either because the buyer lost their job or due to financing issues, and an additional 47% reported \u201cother\u201d reasons (mostly related to the coronavirus pandemic).<\/p>\n Many states are still enforcing shelter-in-place orders, and real estate may or may not be considered an essential service, so confirming that is the necessary first step. Appraisals and inspections could likely be prohibited or delayed<\/a> in this unprecedented situation.<\/p>\n![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2020\/07\/closing-delays-loan-approval-666x381.jpg\")
<\/a>1. Loan approval<\/b><\/h2>\n
How it can delay closing <\/b><\/h3>\n
Dodge move<\/b><\/h3>\n
2. The appraisal is lower than the purchase price<\/b><\/h2>\n
How it can delay closing <\/b><\/h3>\n
Dodge move <\/b><\/h3>\n
\n
![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2020\/07\/closing-delays-inspection-666x381.jpg\")
<\/a>3. Repairs identified in the inspection <\/b><\/h2>\n
How it can delay closing<\/b><\/h3>\n
Dodge move<\/b><\/h3>\n
\n
4. Problems with the title <\/b><\/h2>\n
How it can delay closing<\/b><\/h3>\n
Dodge move<\/b><\/h3>\n
![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2020\/07\/closing-delays-homeowners-insurance-666x381.jpg\")
<\/a>5. Homeowners insurance not secured<\/b><\/h2>\n
How it can delay closing <\/b><\/h3>\n
Dodge move<\/b><\/h3>\n
5. Home sale contingency<\/b><\/h2>\n
How it can delay closing<\/b><\/h3>\n
Dodge move<\/b><\/h3>\n
![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2020\/07\/closing-delays-short-sale-666x381.jpg\")
<\/a>6. Short sale<\/b><\/h2>\n
How it can delay closing<\/b><\/h3>\n
Dodge move<\/b><\/h3>\n
7. Remaining debt on the property<\/b><\/h2>\n
How it can delay closing<\/b><\/h3>\n
Dodge move<\/b><\/h3>\n
![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2020\/07\/closing-delays-closing-costs-666x381.jpg\")
<\/a>8. Closing costs <\/b><\/h2>\n
How it can delay closing<\/b><\/h3>\n
Dodge move<\/b><\/h3>\n
9. Not working with a qualified real estate agent<\/b><\/h2>\n
How it can delay closing<\/b><\/h3>\n
Dodge move<\/b><\/h3>\n
![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2020\/07\/closing-delays-contrat-dates-666x381.jpg\")
<\/a>10. Unrealistic contract dates<\/b><\/h2>\n
How it can delay closing<\/b><\/h3>\n
Dodge move<\/b><\/h3>\n
11. Survey issues<\/b><\/h2>\n
How it can delay closing<\/b><\/h3>\n
Dodge move<\/b><\/h3>\n
![\"The](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2020\/07\/closing-delays-closing-disclosure-666x381.jpg\")
<\/a>12. The Closing Disclosure is late<\/b><\/h2>\n
How it can delay closing<\/b><\/h3>\n
Dodge move<\/b><\/h3>\n
13. There\u2019s an issue with the final walkthrough<\/b><\/h2>\n
How it can delay closing<\/b><\/h3>\n
Dodge move<\/b><\/h3>\n
![\"Red](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2020\/07\/closing-delays-document-errors-666x381.jpg\")
<\/a>14. Document errors cause loan underwriting problems<\/b><\/h2>\n
How it can delay closing <\/b><\/h3>\n
Dodge move<\/b><\/h3>\n
15. The buyer or seller unexpectedly passes away<\/b><\/h2>\n
How it can delay closing<\/b><\/h3>\n
Dodge move<\/b><\/h3>\n
![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2020\/07\/closing-delays-pandemic-666x381.jpg\")
<\/a>16. There\u2019s a pandemic! <\/b><\/h2>\n
How it can delay closing<\/b><\/h3>\n
Dodge move<\/b><\/h3>\n