It’s a great feeling to assist clients on the great adventure of discovering and landing their new St. Cloud home. The final part of the real estate sale comes with the closing, where the papers are executed and house keys handed over.
Virtually all of my St. Cloud real estate sales proceed to closing without significant hitches. That’s not by accident: I’ve helped clear the path by methodically checking off every item on each sale’s unique ‘to do’ list. That checklist has evolved to include the various technical legal and financial items that need to be addressed before a change of ownership can happen. At closing, they’re all addressed.
But—as everyone with many closings to their credit will tell you—even well-laid plans can begin to unravel when the unexpected pops up. Apparently “closing nightmare” stories make for great internet fodder, because you can find scores of them online. Some are tall tales, but others are exactly what’s to be expected if care isn’t taken to head them off.
Here is a list of five of those kinds of closing predicaments. They reflect common missteps that can derail things when everything else is in order. Since most are easily preventable, they’re unlikely to occur at the last minute if real estate professionals have been part of the picture from the start:
1. Agreed-upon repairs aren’t completed. This can happen for any number of reasons, but innocent or not, if the timetable for completion hasn’t been met, it can threaten to derail the real estate sale. This one doesn’t have to prevent closing. If everyone wants to proceed, the Realtors® for the parties can work out an escrow arrangement with funds set aside to cover the shortfall.
2. The house can’t be sold. This rarer situation should have been identified before closing, but it’s possible that a mechanic’s or tax lien can show up late in the day. In cases where there has been a death in the family, it’s also possible that the heirs may mistakenly believe they will have legal title to home in St. Cloud before the probate process can be completed.
3. The home loan appraisal comes up short. Both buyer and seller may be in perfect agreement about the value of the St. Cloud property— but if the chosen bank’s appraiser demurs, it may be back to Square One.
4. The buyer’s finances change. When a lender green-lights a loan based upon the buyer’s debt-to-income ratio, that’s considered a key qualifier. If the buyer changes that ratio by losing income or taking on new debt (or even paying off an existing debt!) it alters the ratio, which can trigger a new investigation, stall the loan—and waylay the closing.
5. Homeowner’s insurance falls through. It’s a bad idea to assume that every insurance company will grant required homeowner insurance. Since their binder or policy will be needed, better to take the extra moments to call to more than one agent.
The best St. Cloud closings are no accident: they happen when all contingencies have been discussed and worked out well in advance. They start at the very beginning—hopefully, with a call to me!