When you are trying to sell your house, there are a few big steps that need to happen. First, you need to get it listed. Then, you need an offer. Lastly, you need to get the sale of your house to the closing. Closing is a fancy legal term for the actual sale of your house. Until you have closed, you haven’t sold your house. Once you have closed, you no longer own your house. When we buy new sneakers, we go to the store, try them on go to the register, and pay. Then we have “closed” on our new sneakers, pretty and shiny. For a house, the process is a bit more complicated involving realtors, bankers, and lawyers. When you go from the offer to the closing, it can take weeks. Sadly, several things can delay your closing. Take action early to avoid events that delay your closing.
The Buyer Getting Approved for a Mortgage
There are several reasons why a cash buyer is often better than a buyer who needs a mortgage to close. Not the least of these is that you can’t get past the offer and close on the sale until their mortgage is approved. As the seller, you have very little control over that process. The bank will require certain things along the way. If these requirements aren’t met, the bank could decide not to fund the loan and then you are back at the listing process.
One way that you can help yourself is to quickly provide anything the buyer needs. They may need paperwork, proof of work done, permits, etc. The bank wants to make sure that they are funding a house that is legal and that is worth what the buyer and seller are asking for. The more quickly you can provide the information and the more quickly you can resolve issues, the faster you can sell.
A buyer that has already been approved can be a benefit. That doesn’t mean that the bank had agreed to fund your house, but it means that they have already evaluated the creditworthiness of the buyer and feel good about that. Not all buyers are the same.
The Home Inspection
One thing that a bank is going to require, and most sellers, is a home inspection. They will hire someone with expertise in evaluating houses to carefully look over the house. It is their job to discover and evaluate any defects. Both the bank and the buyer need this assurance before the process can move forward.
As the seller, the important thing you can do here is to provide the inspector with ready access. If they find anything, be prepared for the seller to come back and ask for it to be fixed or for a credit or price reduction. The bank may require it to be fixed. While this is often part of the negotiation, you still want to be responsive and maintain a good relationship with the buyer. If it’s the bank demanding it, even the buyer won’t have much leverage.
If the deal falls through because you won’t negotiate or fix issues, then odds are that the next buyer will find the same thing. Sometimes it’s best to move the process forward. In some cases, you might be obligated to disclose the issue to a future buyer which cut make them reluctant to bid.
Last-minute inspection issues can be the worst. Some sellers even like to get an inspection before listing the house so that they know what to expect. That may not be necessary, but getting this done early in the process can really help.
Appraisal Issues Can Kill Your Closing
You can list your house for any price you want. Even if you get an offer, the test doesn’t mean a bank will fund it. The bank is going to require an appraisal which means that they send someone to evaluate the value of your house. When they do this, they look at the condition of your house. They also look at the values of similar houses in the same area, what they have been evaluated for and what they have sold for. These are called “comps”.
The bank then uses these values to determine how much they are willing to fund. This means that even though you have a really high offer, that isn’t the end of the story for selling your house.
There isn’t much you can do there. You can work with the appraiser and the buyer to get through this more quickly. Probably the biggest thing you can do is to price your house well from the beginning. Work with your realtor to determine a fair price that fits in with other houses in the area. That way, an offer is more likely to get funding.
Title Search Issues
We have talked before about the title search. This will be part of any home sale. Title issues can be complicated and messy. Title issues are more common when the house came to the seller through unusual means. Examples include inserting the house, buying it out of bankruptcy or a short sale. Often in these cases, there are third parties, often remote who may not be as diligent.
Make sure that you have paid off any debts that might have caused a lien on your property. Sometimes these surprise home sellers when they don’t realize that a contractor put a lien on their property and it was never cleared. Make sure your taxes are paid. These are things that often show up and can make selling difficult or a lot slower.
Don’t let the Final Walkthrough Delay Your Closing
The final step before closing, or one of them at least, will be the final walk-through when the seller is moved out. If there were any remaining items to be done from the inspection or other contractual requirements, this is likely when that will be verified. Unlike the other delays, the seller often has almost complete control over this.
Make sure that the house is cleaned, normally that should be at least broom swept. Everything needs to be moved out, with no remaining furniture or clothes. If you committed to any repairs or actions before the closing, this is likely when they will expect them.
Be Proactive and Don’t Let Something Delay Your Closing
Selling your house isn’t a quick process. It often takes weeks from the time that the offer is accepted. This doesn’t include the time before the listing or showings. This is the home stretch. By knowing what to expect and staying in front of things, you can give yourself and your buyer the best chance at a quick and flawless closing. Don’t delay things and try to keep things moving. When your buyer needs something, get it quickly, and see if they need anything else. The more proactive and responsive you are as a seller, the faster this will go.