7 Things That Can Delay Close of Escrow

The May real estate market is fast and furious with most listings receiving multiple offers. Anyone can sell a home, right? Then why is it that I recently read 25% of all transactions fall apart before closing escrow?

Consider what happens when a transaction gets a bit, well…complicated. In my experience, most real estate transactions are anything but “normal.”

Here are 7 reasons I see most often that can cause an escrow to be delayed or not close at all:

1) The buyer discovers major issues with the home via inspections that either need to be repaired or credited for repairs to be done at a later date.

2) Buyers request repairs, and sellers in turn can agree to all, some or none of the requested items. When an agreement is made that seller will complete repairs and they aren’t done correctly or on time, this also delays closing.

3) The home can’t be insured, perhaps due to a safety issue, like knob and tube electrical wiring, leaving the buyer high and dry and not able to close until insurance can be secured.

4) The appraisal comes in below the offered purchase price. If the buyer can’t come up with the funds to close, and the seller won’t’ agree to sell their home for less than the offered amount.

5) Incorrect information on the loan documents or the final settlement statement.

6) Title issues can appear, including such things as liens filed by unpaid contractors. This must be rectified before the transaction can be closed.

7) Final walk through or ‘verification of property’ is another sticking point that can occur if buyer finds something different from the last time they saw the property or junk has been left inside or in the yard. The closing can again be delayed.

You owe it to yourself to hire a seasoned real estate professional who will manage your risk, successfully negotiate on your behalf, effectively communicate to all parties on a consistent basis and who takes their fiduciary responsibilities very seriously.