From the perspective of a buyer, the need to secure the contract of sale on their new property is a very important priority. There may be a few obstacles during the process of having a new home that is built by a contractor before the purchaser is able to obtain full ownership of the property.
In order to avoid the stress associated with this process, it is important for buyers to know about some typical problems that could occur and have some idea as to how to avoid these bumps along the way. These are difficulties that could occur whether purchasing a brand new home or an existing home on the market.
Common Problems Encountered in the Closing Process
The following are some of the most common issues that are encountered before concluding a contract.
a€? Home Inspection – Sometimes a home inspector reports that the home needs significant repair work. Individual inspectors are different from each other, so know that some of them are overly picky. Sometimes undue concerns on the buyera€™s part about the building may cause the inspector to make mistakes during the inspection process.
a€? Lender Issues a€” Many times there are problems with the mortgage company that could include: improperly disqualifying a borrower; discontinuing a buyer’s mortgage program; requiring that major repairs be done on the home before approving a mortgage; changing the rate of the mortgage unexpectedly; or switching the type of the mortgage. All of these situations could put the purchasers in a difficult situation.
a€? Appraisal Issues – Buyers may also face challenges with the appraisal. An appraiser who is not familiar with the region or is overly conservative may under-appraise the residence which will mislead the purchaser into offering a bid that is much too low. There are also circumstances where the appraiser may find that there are insufficient comparable sales in the area for the property. There are many reasons for a large margin of error in the appraisal process which provides a sometimes wide discrepancy between the asking price and the offer from the buyer.
a€? Title Problems -The title may have questions that do not surface until the final paperwork is being executed. The deed may not have been properly signed or there may be a mistake in the property description. Sometimes the company or attorney who prepared the title paperwork misses some important information or figure that may cause postponement of the sale.
a€? Building Delays – In a situation where buyers are purchasing a new home, there may have been delays during the building process and the residence may not have been completed by the agreed date, causing a delay in the closing date.
a€? Personal Problems – Other difficulties may occur that result from personal concerns of the purchasers. Unexpected loss of the down payment; a problem with the buyers’ documentation processing; the correct information not having been provided by the purchasers especially in regard to their income or debts; and the unexpected loss of a job for many possible reasons will certainly affect the closing of the contract
Protection from High-Pressure Closing
Buyers are usually vulnerable during the conclusion of the property sale; however, they can protect themselves during this process. For example, it is appropriate for the buyer to insist that the seller live up to the original contract terms and not attempt to insert last-minute unacceptable changes. Being firm in the negotiations process is appropriate for the purchaser at closing time.
During this concluding process, it would be beneficial to the buyer to remain calm and not hurried in reviewing the final paperwork. It is helpful to obtain the final closing documents in advance with adequate time to review the documents. If there are new documents presented to the purchaser at the time of closing, buyers may feel pressured to sign them. If this occurs, the purchaser can courteously ask for enough time to read and review the agreement. Read all of the papers slowly and thoroughly one last time at the final meeting and, if possible, without the presence of the other party to ensure that there is no outside pressure.
Sometimes there are some unavoidable circumstances when purchasing a new house from a builder or when purchasing an already existing home; however, all of the stress factors can be avoided if buyers are knowledgeable about what to expect during the closing process. It is always appropriate for a purchaser to solicit the services of a professional realtor or reputable negotiator to help conclude the sale. Primarily, to avoid closing headaches, be knowledgeable and be prepared!