The process of buying a house can be bittersweet -- at one point you're excited to live in your dream home, and then the next thing you know, you're stressing over every transaction. This is also true even when it comes to closing.
Both buyers and sellers eagerly anticipate the closing date stipulated in their contract. But, when you encounter a closing issue, it becomes frustrating.
On average, a house closing with a mortgage application takes about 45 days. On the other hand, cash transactions that won't require a lender can close in as fast as one week. Meanwhile, sales that include backing from the Federal Housing Administration involve more paperwork and can take about two months or more.
However, regardless of what or who is involved, other factors can slow down real estate closing.
Real estate title is the legal right to own property. Property rights include the privilege to use, possess, transfer, and enjoy the property. Though it is not a physical document, it is a legal concept of ownership. Technically, buying the property means buying all its titles.
On the other hand, a deed is a physical document that serves as evidence that transfers title from one party to another. It outlines the transfer terms, identifies the buyer and seller, and identifies the property being acquired. The deed serves as proof when transferring ownership or becoming the new owner.
Real estate title and deed are related in the same way but have different concepts, and understanding the difference is crucial when buying or selling a property. There can also be factors that can slow down the transaction. Title issues can indeed cause complications and delays in real estate transactions, including:
Ownership Disputes – Ownership disputes can be complex and sensitive issues. It requires legal intervention to resolve. Some ownership disputes include:
Inheritance – This is a usual family issue when a person dies without a clear will. Having room for potential heirs and will claim who has the right to the property.
Conflicting Claims – Multiple parties assert ownership rights to the property, which is done through oral agreement or historical record.
Unclear Boundaries – When a property is not properly defined or has a conflict report.
Fraudulent Transaction – This includes allegations, such as illegal transfer of title or forged signature.
Errors In Public Documents – It could be worse if there are mistakes in public records, such as incorrect property descriptions or misspelled names, which can lead to confusion and delays. Before everything, such as putting the property on sale, these errors should be corrected so the process can go smoothly without any problems.
Unpaid Taxes – There could be a problem if the current or previous owners have not paid property taxes. The property may have tax liens placed against the house, which need to be resolved before even putting the house on sale and can proceed.
Liens – It’s a legal claim or right made against the asset, which was held as collateral to satisfy a debt. They have the rights or possession of property until the debt was discharged.
Illegal Deeds – This can invalidate the title and require legal action before proceeding with the sale.
Chain Of Title Documents Errors – With the title search, you can avoid issues like who holds the title property, how the title is held, or if there are any parties interested in the property. The document will show the vesting deed, mortgage, and mortgage assignment.
An instrument survey, which is used to check properties, calculates the location by using land surveying instruments. It reflects the property’s boundaries. A face-to-face survey may bring to light property disputes or intrusion into the borders. If solved quickly, parties must sign an affidavit that reflects the resolution of the dispute before putting the home on sale.
Problems that can arise during the home inspection or final walk-through can influence the real estate transaction. Therefore, real estate agents encourage buyers to arrange a home inspection before closing the deal. This process is crucial to examine the property’s condition and identify if there are any potential problems or issues.
Home inspectors will inform you and help you decide on the real estate's condition before proceeding with the purchase.
Problems usually discovered during a home inspection include:
Good communication is essential in solving these problems and looking for ways to find solutions that will satisfy both parties.
A home appraisal determines the market value of a home. The bank’s appraisal value must match or exceed the home’s value or sale price. If the appraisal value falls short, it may cause a delay.
When both parties agree, the seller can complete home repairs to increase the property’s value or decrease their price. If the closing date is delayed, buyers who miss their agreed-upon closing date might pay a delayed closing penalty. It could also result in a breach of contract and might result in both parties walking away from the deal.
Completing the appraisal as soon as possible after contract signing enables the parties to resolve any issues before the closing date and prevents parties from walking away.
Real estate closings can be complicated, stressful, and confusing, especially when there's a lack of competent advice or adequate preparation.
If you are considering buying or selling a house, take time to research and follow tips that will make the closing of your property as smooth as possible. Asking for help from a professional, such as a real estate agent or a title service provider can help close a property quickly and hassle-free.
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