Columbus home buyers can experience last-minute closing snags that cause a home purchase to be delayed or canceled. Similar to an airline Captain navigating around severe weather to get you safely to your destination, we, as an Exclusive Buyer’s Broker, will help navigate the potentially 115 kinds of home buying “turbulence” you may encounter! All 115 are listed in our Educated Buyer Notebook that you’ll receive when you become a Buyer-Client.
Some of these situations are within a home buyer’s control. But many involve the seller, the seller’s Realtor, the lender, the title company, the inspection process, insurance and more. Here are a few examples of common causes of closing delays, and how to avoid them!
Buyer financing issues account for 46% of reported closing delays. Financing problems can be triggered by:
- Negative changes in home buyer credit scores between loan approval and closing. This can happen when buyers make new purchases on credit, open new lines of credit, or close existing credit accounts. Medical bills that become active collection accounts can also hurt a score. Do not purchase anything until after closing – even if they offer special “one-year free financing” since that will affect your score! Lenders will re-run your credit once more just before closing!
- Changes in buyer debt-to-income (DTI) ratios. This can be caused by taking on new debt, such as a car payment. The DTI can also change if the mortgage underwriter sniffs out obligations that the buyers did not previously disclose, such as child support payments.
Home buyers need to know that obtaining a mortgage pre-approval is not the end of the financing process. Prior to closing, your lender will re-verify your income, employment, credit score and bank accounts. If there are any changes to your financial picture, your lender may require new documentation and new underwriting.
To project your mortgage financing, please do not make a major purchase, either with cash or credit, after obtaining your mortgage pre-approval. Also, do not open or close any lines of credit, or change jobs. And to avoid last-minute problems with your mortgage approval, disclose all of your ongoing financial obligations up front, whether or not they appear on your credit report.
Problems with the home appraisal account for about 21% of closing delays. When the home sale price and the appraiser’s opinion of value do not agree, the buyer’s mortgage lender will not finance the difference. This leaves a handful of possible remedies:
- The seller can lower the home price to match the appraisal. Our preferred choice!
- The listing agent can provide additional information and sales comparisons to the appraiser, to justify the sales price.
- The home buyer can pay the difference between the sales price and the appraisal value, essentially making a larger down payment. This could be an acceptable solution if the difference is marginal, but it’s rarely in the buyer’s best interest to overpay for a home.
- Lastly – a re-negotiated price where the seller lowers the price to an agreed-upon value that the buyer will accept.
An Exclusive Buyer’s Agent or Broker will help you avoid this situation by performing market comparisons, and by providing counseling on fair market value based on this data.
Home inspection issues are involved in 14% of closing delays. If a home inspection reveals a significant defect, negotiations are usually conducted between the buyer and seller to find an acceptable solution. In our case, we will seek for the seller to repair or replace the issue in question.
An Exclusive Buyer’s Agent or Broker can often help you spot condition issues during the home viewing, and negotiate these at the time of the offer. We also recommend that you order your home inspection as early as possible. At Buyer’s Resource Realty Services, we follow through to ensure that any seller-conducted repairs are done properly, well before the closing.
Most of the time, closing issues are resolved successfully and the home purchase goes through. Nationally, about 6% of delayed closings result in a canceled home sale.
Using the guidance of an Exclusive Buyer’s Broker can help you avoid some of the problems that result in closing delays! We provide expert consulting to our Buyer-Clients, including information about current home values, property condition and mortgage financing.
Our free e-book, “How to Buy a Home like a Pro” introduces you to the myriad points of the home purchase process! When you become our Buyer-Client, you’ll receive our 125-page “Educated Buyer Notebook” that contains expert insights you won’t find anywhere else.
As your Exclusive Buyer’s Broker, we serve your best interests at all times! Unlike real estate agents and brokerages who represent sellers, as an Exclusive Buyer’s Broker, we only represent you, the buyer, getting you the best price and terms with no conflict of interest at all times.
Understanding this distinction could literally save you thousands of dollars not only on the purchase price and terms, but also on seller concessions and home inspection issues, whether you are a first-time homebuyer or an experienced homeowner!
Contact us with your home buying questions! Remember, we are with you every step of the way…all the way home!
Andrew Show
Broker, CEBA, CEBA-M, CNE, CSP, ABR-M, e-PRO, GREEN
Buyer’s Resource Realty Services
Serving Metro Columbus, Ohio with Exclusive Buyer’s Agents
7100 North High Street, Suite 204, Worthington, Ohio 43085
614-888-4110 | 888-888-4110 Toll Free | 614-839-4110 Fax
