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What Can Go Wrong At Closing?

There are many reasons a closing may not happen on the assigned day or be delayed. It is important that you understand these reasons in the event that you land in such a situation.

Money Problems
The estimate of the buyers closing costs may have been inaccurate and the cashiers check brought to the closing may be short. This should not happen if the buyer is dealing with a reputable lender but is still possible. The lender and title company do not take personal checks so the buyer may have to run across town and get another cashiers check.

Loan Problems
If the loan package for the buyer is not there or some of the documents are missing, you will not be closing until they arrived. If there is an error on the documents such as the interest rate agreed between the buyer and lender is incorrect. The buyer will need to get this corrected by the lender prior to closing. If the lender does not approve the loan in the first place, the buyer may be unable to buy the house. You may want to get progress reports on the status of the buyer's loan application so you are aware early if there are any issues.

Final walk through problems
If the final walk through was agreed upon and is on the sales contract and some issues arise during this walk through such as damages or missing items, the buyer or his agent or attorney may bring these up at closing. You or your agent or attorney will need to negotiate with the buyer in order to close, as the buyer will not probably wish to close until these issues are dealt with.

Title Problems
Last minute title problems may arise. There may be a lien on the property or another person has a claim on the property or the taxes have not been paid. These issues need to be resolved prior to closing.

Appraisal Problems
If the appraisal comes in much lower than the selling price, the lender may not approve the buyer loan application. Generally a lender will approve a loan for a certain percentage of the appraised value -- 85 % is usual. In this case, one of two things needs to happen -- the seller will either need to lower the asking price or the buyer will need to come up with more money.

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