Problems to Avoid When Closing on a New Home

Purchasing a new home can be daunting, especially for first-time homebuyers. But, perhaps the most intimidating and time-consuming stage is the home-closing process. Depending on demand, market conditions, and the season, it takes between 30 to 60 days to close on a home.

During the closing period, many things can happen. Some of them may surprise you, and that’s not always a good sign. Fortunately, most of the problems you’re likely to face are avoidable. So, this article will discuss some common real estate closing issues and how to avoid them.

But first, here are some major components of the purchasing process.

Main Considerations When Purchasing a Home

There are several stages that every buyer must go through before finally securing the keys to their new house. Here are the most important ones:

Selecting a real estate agent

Agents understand the market and have the bargaining skills necessary for real estate transactions. As such, your first step, especially as a first-timer, should be finding a good agent.

Mortgage pre-approval

While searching for a real estate agent, also work on being pre-approved for a mortgage, which will tell you how much you can spend on a home. This process will also help guide your decision-making regarding the house.

House hunting

According to Statista, 99% of home buyers between the ages of 23 and 56 used the Internet in their home-buying process.

Make an offer

After you’ve found the house you want, your agent can help you assess the property. Your agent will negotiate on your behalf until both parties agree on the selling price and contingencies.

Mortgage process

To apply for a mortgage, you must gather the necessary documents, such as pay stubs and bank statements, and then present them to the lender.

Closing on the house

With many things taking place during the closing phase, a lot can go wrong. Here are some of the problems you should try to avoid:

Avoid Property Title Issues

A property title refers to the ownership rights of the seller.

During closing, your attorney or the title company will check all public documents for any liens or claims. Some of the issues may include:

• Unpaid taxes.
• Unresolved contractor payments and liens.
• The property is the subject of a lawsuit.
• The previous owner still has a claim on the house.

According to Redfin, previous liens are also one of the main contributors to the rising number of canceled agreements.

To avoid such frustrations, review the preliminary title report provided by the title company, which is available shortly after the opening of the escrow account. Get a copy from the lender, title company, or attorney.

Avoid Mortgage Delays

Mortgage delays are common, especially in hot real-estate markets, since lenders are overwhelmed by the high number of loan requests. So, if there’s any missing or incomplete information in your mortgage application file, you might not know about it until the last minute.

You can avoid this issue by confirming all the documents the lender requires before submitting your loan request. Then, once you’ve completed the application, call the loan officer periodically to ascertain whether everything is in order.

Avoid Document Errors

Simple errors like misspelled names or a transposed address can cause significant delays. Therefore, confirm all the information on your loan application before submitting it to the lender, and double-check for spelling errors.

Conclusion

Closing on a new home is an exciting process. Unfortunately, it can also be a frustrating experience, especially when faced with last-minute issues. So, check in advance to identify potential problems and correct them early. Plus, check your application carefully to ensure there are no errors.

 

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