Can real estate closings be delayed?

On Behalf of | May 14, 2020 | Residential Real Estate Closings

Delays to a property closing can happen for several reasons. There may be a defective title, causing the lender to request additional information. A home inspector may discover that there’s been an infestation of pests and that repairs are needed. An appraisal may also come back that the house is valued at less than the original purchase price. This may impact a prospective homeowner’s ability to qualify for the loan. These are just some of the reasons that home closings may be delayed.

A contract is legally enforceable starting on the day that you sign an agreement to purchase a home. It’s soon after that that both buyer and seller agree to a specific closing date.

There’s generally a due-diligence period built into every contract. It gives the buyer the ability to back out of the contract for a lot of different reasons. Buyers can request that sellers make certain modifications to the property during this time. They may continue with the contract if these concerns are addressed. Both parties may have to consent to an extension of the closing date if the seller agrees to make amends. This will give them adequate time to address the buyer’s concerns.

Minimal-documentation loans can be processed by the lender in as little as 24 hours, with a closing date of fewer than two weeks. It can take lenders from 30 to 45 days to process an application and underwrite more conventional loans. U.S. Department of Veterans Affairs (VA) and Federal Housing Administration (FHA) loans can take up to 60 days to close.

Lenders often request additional information that delays property closings. Most purchase agreements have an automatic closing date extension provision in them in case the lender has additional requests. They can generally extend the closing by up to two weeks.

Sellers can also request an extension of the closing date if they’re having difficulty finding another property to relocate to or are going through a divorce. Delays like this may affect the mortgage rate and cause the lender to have to underwrite the loan again.

Georgia’s real estate closings may be delayed for a variety of reasons. You need to understand when and why this can occur. A residential real estate closings attorney here in Augusta can advise you of what those situations are and help you stay on top of everything so that it all goes smoothly.