Potential Roadblocks To A Successful Closing

I. The Buyer 1.    Did not tell the truth on loan application.  2.    Did not tell the truth to the Real Estate agent.  3.    Submits incorrect tax returns to lender. 4.    Lacks motivation.  5.    Source of down payment changes.  6.    Family members do not like purchase.  7.    Is too picky regarding condition of house.  8.    Finds another property that is a better deal.  9.    They are “nibblers” (always negotiating).  10.  The buyers bring an attorney into the picture.  11.  They do not execute paperwork in a timely manner.  12.  They do not deliver their money in a “check cleared” fashion to the title company.  13.  Job change, illness, divorce, or other financial setbacks.  14.  Comes up short on money.  15.  Does not obtain insurance in a timely manner.  16.  Leases on investment property fall through.  II. The Seller 1.    Loses motivation (i.e. job transfer did not go through, etc.) 2.    Illness, divorce, etc. 3.    House has hidden defects that are subsequently discovered.  4.    Home inspection reveals average amount of small defects that seller is unwilling to repair.  5.    Removes property from the premises that the buyer believed was included.  6.    Is unable to clear up problems or liens.  7.    Last minute solvable liens are discovered.  8.    Seller did not own 100% of property as previously disclosed. 9.    Seller thought partners’ signatures were “no problem,” but they were.  10.  Seller leaves town without giving anyone power of attorney.  11.  The notary did not make a clear stamp when notarizing the seller’s signature.  12.  Seller delays the projected move-out date.  13.  Seller delays access to appraiser and/or home inspector.  III. The Real Estate Agent 1.    Selling and Listing Agent disagree on commission structure.  2.    Agent does not provide purchase agreement to lender in a timely manner.  3.    Agent suggests buyer talk to another lender after buyer has been approved and locked elsewhere.  4.    Agent negotiates a purchase price over what the home will be appraised for.  5.    Agent negotiates a purchase agreement for buyer who has not been pre-qualified with a lender, and buyer does not qualify for home.  6.    Earnest money check is not deposited in time to show that funds have “cleared.”  IV. The Lender 1. Lender does not properly pre-qualify borrower.  2. Lender raises rates, points, or costs.  3. Borrower does not qualify because of a late addition of information.  4. The borrower does not like the fine print in the loan documents.  5. Lender/Underwriter loses file.  6. The lender does not simultaneously ask for information from the buyer; they ask for information in bits and pieces.  7. Lender pulls a “bait & switch” on the buyer.  8. Lender does not have the money, so makes up some excuse for rejecting the buyer.  V. The Loan Servicer 1. Underwriter decides last minute they don’t like the borrower.  2. Underwriter decides last minute they don’t like the property.  3. Underwriter wants property repaired or cleaned prior to close.  4. Underwriter requires, at last minute, a re-appraisal.  5. Closing documents are not delivered to Title Company in time for closing.  6. Money does not arrive in time to fund the loan at closing.  7. Servicer pulls last-minute credit report and finds out buyer bought a car two days ago.  8. Servicer calls employer on day of closing and is informed that buyer quit their job yesterday.  VI. The Inspection Company 1. Too picky.  2. Scares buyer.  3. Infuriates seller.  4. Makes mistakes.  5. Delays reports.  VII. The Appraiser 1. The appraiser is not local and misunderstands the market.  2. No comparable sales available.  3. Appraiser delays (too busy, etc.).  4. Incorrect appraisal.  5. Appraisal too low.  6. Appraiser not “approved” with lender.  7. Well/septic problems arise.  8. Home found to be in food plain.  VIII. The Title Company 1. Does not find liens or problems until last minute.  2. Does not bend rules on small problems.  3. Poor service.  4. Loses paperwork.  5. Closing time not available on contracted closing date.  6. Mistakes on closing statement (HUD-1).