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Sarasota Home Buying: 5 Things That Can Put the Kibosh on Your Closing
If you've spent every weekend house-hunting, bidding, and finally negotiating a deal on the perfect Sarasota home, you're ready for life to return to normal. Your closing is the final step and then you're done. Before you celebrate, remember what baseball great, Yogi Berra once said, "It ain't over till it's over."
Our real estate agents are always excited when we help buyers find the right home. We don't want to sound at all negative, but you should understand that unanticipated problems can sometimes put the kibosh on your closing. We provide this list so you can anticipate and possibly prevent these five problems.
1. Purchase Price Too High
Before a mortgage company finalizes your financing, they require a home appraisal and a home inspection.
- The home inspection reveals conditions that might make the home value less than the asking price.
- The appraisal tells you the current value of the home.
If you don't resolve appraisal vs value issues, your mortgage company will likely nix the financing. They may do this even if your purchase price is within the range of your mortgage pre-approval. What can you do?
- Renegotiate to bring your deal in line with the appraisal value before the company reviews your loan.
- Come up with a larger down payment to cover the value discrepancy.
- Delay the closing to negotiate value vs appraisal issues found during the home inspection
2. Spending Indiscretions
If you finance a shopping spree before your scheduled closing, your mortgage company may step away from the deal. Lenders evaluate your finances before they approve your loan. They take a second look just before you close. If your debt-to-income ratio has risen over 36%, they may decide you've taken on more debt than you can manage.
- Consider paying cash for high moving expenses.
- Don't open any new credit accounts.
- Don't run up your credit cards.
- If you feel you can afford more debt, wait until after your closing.
3. Income Inconsistencies
Lenders approve your mortgage based on your financial consistency. Your job and income are important factors in that equation. If you shift careers or take a salary reduction after they approve your mortgage, the change could bring everything to a halt.
4. Title Complications
The mortgage company could delay your closing over problems obtaining a clear title.
- Ownership disputes
- Improperly executed or filed paperwork
- Fraud issues
- Judgment, tax, or unpaid contractor liens
Title companies work to resolve these and other issues before closing. Once they clear up any problems, they issue title insurance that indemnifies insured parties if a problem arises due to a past act. If a title company can't resolve discovered issues before closing, it will force a delay.
5. Walk-through Issues
You'll do a final walk-through a day or possibly hours before your closing. If the seller removed appliances, fixtures, or other items you were expecting to be there, the resultant dispute could delay or stop the closing altogether.
You can prevent this by outlining clear expectations in your purchase agreement. When negotiating and finalizing your home sale, you and the seller must be clear on what goes and what stays.
When you work with one of our real estate professionals, we can help you anticipate and avoid most closing problems. Contact Wagner Realty if you're buying or selling a home or for more information about the real estate markets we serve.
