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7 Things That Can Go Wrong At A Closing & How To Prepare Yourself

Finding your dream home should be an exciting, liberating process, as it marks a new beginning and adventure down the road; however, between the regulations, contracts and fees, it can also be incredibly stressful.

Unexpected predicaments can pop up, especially at a closing, which can further delay the process of setting foot in your new abode. Thus, it is important to prepare yourself for obstacles at a closing, so that you can tackle them both efficiently and quickly.

Apart from hiring an attorney to keep you protected and in-the-know, taking note of all legal documents with a detail-oriented eye, and maintaining your health, so that your brain is sharp and alert, you should mentally prepare yourself for issues that can occur at a closing and make your purchase less smooth and accessible than desired. Here are seven things that can go wrong at a closing and how best to take action.

1. A Low Appraisal

Upon purchase, the buyer’s lender often requests an appraisal of the home, in order to guarantee that the contracted price is appropriate in worth. If the appraisal is under the agreed upon price, the buyer might be forced to make up that amount, if a contract does not call for 80% or more mortgage contingency, without assistance from the mortgage company. Be prepared that additional fees post-contract might apply, and have extra cash on hand in case.

2. A Need For High-Risk Insurance

Often based on location, some lenders may request that the buyer purchase a high-risk insurance plan in order to protect the property from natural disasters and other complicated conditions. Make sure to scour the area prior to purchasing and stay up to date on any location woes that might demand such a request. Plus, obtaining high-risk insurance can be tricky, so that can also lead to additional stress.

3. Mistakes In Legal Documents

Common errors can appear in the legal documents that will call for a re-print, thus delaying the closing process. Between misspelled words, erroneous information, mathematical issues and tampering of pages, it’s easy for writing and printing issues to be imperfect. Be prepared for a few extra hours or days for a closing to end, in case you are met with document complications.

4. Last Minute Requests

It’s common for lenders to ask for additional information at the very last minute, such as copies of rental agreements, deposit checks and evidence of insurance arrangements. Because these little to-dos can be time-consuming, it can often cause delays in closing. Ask your loan officer well in advance for all the information required, and bring all documents and information that you have to the closing itself. Key documents to include are the homeowner’s insurance policy form, a photo ID, an insurance payment form, as well as finances for the closing cost.

5. Walk Through Terrors

Upon entrance for a home inspection prior to a closing, you might find that the home contains serious damages, termite or bacterial infestations, as well as other indicators of a poor living environment, such as roof impairment, leaky pipes, and hidden holes or stains (which can often be initially hidden by rugs, fixtures and paintings). Decide whether extermination and other repair techniques can solve these problems prior to closing. Such issues can take time to clear and can delay the closing process. Additionally, if they are incredibly problematic, it can cause the deal to fall through. In order to save the closing despite minor walk through issues, parties may agree on closing with escrow and the seller’s undertaking to fix the issues.

6. A Loan Falls Through

In life, it’s common to experience unexpected obstacles, especially with regard to money, career and familial arrangements. Unfortunately, such major transitions can interfere with your ability to secure a loan. Even if the buyer is pre-approved for the loan, it’s possible for the lender to change the terms or void it entirely, which in turn will delay closing. Such reasons include: career change, debt to income ratio alterations, divorce and any abnormally large and sudden purchases.

7. A Lien Is Placed On The Home

Unfortunately, last minute liens can be placed on a property right before a closing and can interfere with the process of money transfer during escrow. If a title company finds a problem with the sale during inspection, it can place a lien and delay the sale from going through in time for closing. Such issues might involve a seller’s inability to pay off mortgage costs or property taxes. Removing the lien can take a few extra days, but if you hired a reliable title service and both parties have decided to sign off on the selling agreement, then your title company should penny up the costs the remove the lien.

Vast changes and transitions in life are never easy, and purchasing a home can definitely fill this profile, as it marks a momentous step in a person’s life. From both a buyer and seller perspective, many things go into securing a sale and moving on to that next chapter, and so it’s important to be mentally prepared for problems that arise and to take each encounter with grace, patience and strategic action.

For more information, please contact Natalia Sishodia, Sishodia PLLC, email

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