Checking ahead can help avert closing delay

STARTING OUT

March 13, 1994|By Dian Hymer

What can cause a closing to be delayed?

Many of the reasons for a delayed closing can be avoided if you know what to watch out for in advance.

Closing delays often have to do with the buyer's new home loan. For example, lenders require that buyers have a homeowner's insurance policy in effect at closing. If this critical item is overlooked, closing will have to be postponed until the buyers have their insurance in place.

A closing could be late if the funding check from the buyer's lender isn't issued on time. This can happen if you don't sign your loan documents promptly, a situation over which you have control. A circumstance over which you have little control is a delay due to lender backlog. This will occur when there's a lot of refinancing or a busy real estate market. If you know the lender is busy, try to get all your loan-related paperwork in early.

Sometimes work on the property needs to be completed before the closing can take place. For example, if the lender requires that the termite work be done and the project is delayed for some reason, your closing will have to be postponed. If you're buying a new house and the completion date is held up, your closing will be delayed.

Sometimes the lender imposes last-minute additional requirements, such as a review appraisal of the property or a further explanation of a credit defect. When your loan is approved, be sure to ask if there are any loan conditions that must be met before closing. If there are, get these resolved as soon as possible.

When two home sales are closing concurrently, a delay in one can cause a delay in the other. This can happen if you're buying a home from a seller who's buying another home. If the seller listed his home contingent upon a simultaneous close with the home he's purchasing, and that closing is delayed, then your closing will also be delayed.

The closing can't take place without the buyer's money for the down payment and closing costs. Buyers often have money wired from various accounts. If wire orders aren't placed early enough or if wire routing instructions aren't correct, the closing will be delayed.

FIRST-TIME TIP: The first thing to do when you hear that your closing isn't going as scheduled is to stay calm. Be sure that your agent informs all other parties involved in the transaction that there is an unavoidable delay. Get a written extension of the closing if it will be postponed for longer than 24 hours.

THE CLOSING: Whenever possible, postpone the move until any last-minute problem has been sorted out. In busy real estate markets, it may not be possible to reschedule professional movers late in the game. As a last resort, the buyer can ask the seller for permission to occupy the property before the closing and, if the seller is agreeable, an addendum should be drawn up indicating the terms and conditions under which the buyer can move in early. An interim occupancy agreement should also be signed by the buyer and seller.

Dian Hymer's column is syndicated through Inman News Features. Send questions and comments care of Inman News Features, 5335 College Ave., No. 25, Oakland, Calif., 94618.

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