After inspection and appraisal, what can go wrong before or at closing?

Asked by Beth, Dallas, TX Mon May 26, 2008

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Bruce Lynn, Agent, Coppell, TX
Tue May 27, 2008
Beth, if you are a buyer, I would expect things to go along smoothly from there. You and/or your realtor or title company want to keep in touch with the lender to make sure they are progressing work on your loan and will close on time. You may also want to keep an eye on the house to make sure it stays in the same condition until closing date. I almost never do walk-thrus before closing, but not perhaps a bad idea. You would want to do this the day of closing. You want to make sure it is still the house you purchased. There are all kinds of bad things that can happen between appraisal and closing.....worst case, flood, storms, lender goes out of business, seller declares bankruptcy, USMS seizes the house, AC unit gets stolen, appliances get stolen, seller won't move out, seller changes their mind, defect in title found, seller dies, and on and on and on. Most of these situations are out of your control so to me you don't want to worry or fret, just work through them if they happen. This is the reason to have a good realtor working for you and not go through purchases alone. Getting the contract in place is sometimes only about 1/3 to 1/2 the work involved. Often I tell people that the real work on my side happens when we get a contract and getting it to a succesful closing.
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Terri Hayley, Other Pro, Dallas, TX
Mon May 26, 2008
Hi Beth,

How did those items come back? Did your inspection items come back clear? Do you have anything that you need to get taken care of before closing? Are those things being handled? What about the appraisal? Did it appraise for at least the loan amount? Do you have a loan, or are you a cash buyer?

If you have are getting a loan, you'll want to find out what are the conditions after it's gone through underwriting? How long will it take to meet the conditions? Can you meet all the conditions? For example, one time we had clients who had a $10,000 back tax bill that they didn't know about. It came up as a condition at this point in the loan process. They had to settle the tax bill because the mortgage would become subordinate to the Federal tax lien if it wasn't taken care of. The clients had money they were going to put down on the home and instead paid off the tax bill and put less money down on the home and rolled more closing costs in. Like Alan said, this is where the biggest exposure lies until the loan is closed and funded.

Did they get the survey back? How does it look?

The title company will work up the HUD1 for you. It will have a summary of all the closing costs and who's side - seller or buyer side - it's supposed to be on. Sometimes there will be a glitch on it that will need to be corrected. For example, if you paid for the appraisal out of pocket and they have that down still as a buyer's side item, they'll need to credit you for it because you've already paid for it. You are supposedc to have the HUD1 at least 24 hours in advance to review for reasons like this, but the title company can't always work it up that far in advance depending on the number of closings going on at the time, how quickly they got title request, etc. It's nice if your loan officer can be available via phone during the closing in case there are questions that pop up.

Are you closing in the same location (state) that the property is in? In other words, it's not a mail out? If so, sometimes Fed Ex does not deliver when you absolutely positively have to have it overnight! ;) You can not fund until the seller signs the docs, too. This could cause a stall.

Is it a short sale? If so, there is no hurrying a bank. We once closed on our side on a short sale on Tuesday and then they Fed Ex'd paperwork to the bank who didn't sign the docs until Friday at 5:30PM. We had pre-funded on Tuesday night, so they already had the money. You can't get keys until you are closed on both sides and funded. Our buyer had movers scheduled for Saturday morning, so she got to move in by the hair of her chinny chin chin. Whew!

These are just some of the things that come to mind off the top of my head. Talk to your loan officer and your agent. Make sure they keep you informed and tell them you just don't want any surprises.

Hope you have lots of happy memories in your new home!
Terri Hayley
2 votes
T.E. & Naima…, Agent, Dallas, TX
Tue Jun 17, 2008
You've got some good answers already, but assuming you're worried about things other than inspection-related repairs and appraisal-related financing problems, then the laundry list is actually quite long.
- Survey shows an encroachment or other problem
- Lender cannot clear borrower's conditions, e.g. a large collection cannot be paid off
- Borrower creates a problem on his credit, e.g. makes a large credit purchase of furniture
- Casualty loss on the property itself, e.g. wind tears off roof shingles, flooding of ground floor, fire, ...
- Title search reveals a new lien on the property, that creates a shortage the seller cannot cover
- Title reveals an heirship problem, especially in estate sales
- Title discovers a Federal tax lien is filed against the property
- FInal walkthrough inspection just before closing reveals previously hidden damage or new damage or theft by someone or removal by seller of real property, such as installed cabinets
Admittedly, all of these are rare. But, I have experienced all of these prior to closing but after appraisal and inspection (they're experience builders). Dealing with them usually takes both parties to compromise in some way, but certain of them just can't be solved. All of them will cause delay, at a minimum.
1 vote
Don Tepper, Agent, Burke, VA
Mon May 26, 2008
The house can be damaged by fire, tornado, etc.

Or at walk-through certain items may be missing that were supposed to be left behind. I don't know what the custom in Dallas is, but, for instance, in Virginia typically the appliances stay with the house. You'd hate to do a walk-through and find all the appliances missing...or all the stainless steel appliances you loved when you made an offer on the home replaced with 10-year-old used appliances.

Financing's the big thing, though. One time, I was buying a condo. I'd lived in my previous one for 18 months. I'd packed; the moving van was scheduled. Then the lender calls my agent and says my loan's been disapproved because they didn't believe I was really going to live there.

Good luck.
1 vote
Alan Wynn, , Irving, TX
Mon May 26, 2008

Just a suggestion...stay on top of your financing. Today's underwriters and investors are very skittish and are known to change the rules at the last minute. This is probably the biggest obstacle after the customary property conditions like inspections and appraisal.

Without making assumpitions that you have already reviewed these documents...make sure the Title Commitment is without exceptions in Schedule B and C and that the Survey shows no encroachments etc. Any repairs that have been agreed to must be done prior to closing so be sure and schedule a walk-thru a couple of days prior to closing to make sure they have been completed.

There are other areas to be aware of but without asking you questions to determine if they apply, I will leave it at this. Just keep a sharp eye on financing...this is where you biggest exposure is.

Hope this helps.

Alan Wynn - Realtor
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1 vote
T.E. & Naima…, Agent, Dallas, TX
Mon May 26, 2008
Has the title work come back clear? Lender needs to do all the verifications of employment, income, etc... and any other conditions that need to be cleared and get final loan approval then you can go to closing.


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Diane Burnett, Home Buyer, New York, NY
Fri Jul 22, 2016
I am selling my home. The buyer is going through FHA. The inspection was completed with minor repairs. All the repairs have been done. The appraisal has been completed. What is next? How long should it take to get a closing date at this point.
0 votes
Susie Kay, Agent, Dallas, TX
Tue Jul 14, 2015
There are still quite a few things that you have to be on top of. Are you the seller or the buyer? In general, you'd want to be on top of the lender for any issues that may prevent funding, stay in touch with the title company for any issue that they may find, unforeseen natural disaster, the health of both the seller and the buyer, issues found during final walkthrough.

I would suggest that you talk to your realtor to help explain your concern.

Take care!
0 votes
Susanbabb1218, Home Buyer, Seattle, WA
Mon Jul 13, 2015
We've gone through all the steps on selling our home except for the closing date!! We're very nervous that something can go wrong! This is huge for us. Next week is closing! Can we foresee a good outcome?
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Pamelaforfre…, Home Buyer, Dallas, TX
Sun Nov 25, 2012
EVERYTHING!! I'M 61 DAYS INTO MY LOAN AND SOOOOOO MUCH WENT WRONG.THey still can't give me a closing date. How do I request off and hire movers within a week's time?
0 votes
Bob Aldinger, Agent, York, PA
Wed Jun 4, 2008
I am not sure if you are the seller or the buyer, so I will answer it two-fold. Once the inspections are done, if the seller has to do any of the repairs....they have to be to everyones acceptance. Have they agreed to do them? Is the buyer satisfied? The appraisal on a conventional loan....w/no conditions is sent back to the underwriter and they make the final decision of acceptance. On an FHA loan...there may be conditions which the seller will have to address. Once they are done and the home has been reappraised...again it is up to the underwriter. One important piece of the puzzle is the mortgage committment. That has to be recieved and be clear of conditions. This can impact both buyer and seller if the conditions are running up to the last minute. You, also, have a final walkthru. For the seller, this means....have you stayed in compliance with the contract? Removed all items? Left behind promised items? Left home in a reasonably clean state w/no walls nicked from the move? A buyer can come to the settlement table and ask for damages to be paid for or repaired. Lastly, a problem that can happen, but luckily does not happen often...a buyer or seller doesn't show up. This is rare and I would not worry too much...keep in touch with your Realtor and make sure as a buyer or seller, you are doing everything that you are required to do. I have a settlement coordinator that handles our buyers and sellers and usually the final settlement is a breeze. Hope that helps
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Cyndie Gawain, Agent, Dallas, TX
Wed Jun 4, 2008
You are almost there! If you are the buyer, you need to be sure that your loan gets through underwriting ok. The underwriters are who make the final decision on the loan and they are asking a lot more questions and being very picky these days.
Has the homeowner made the required repairs?
Have you arranged for your homeowners insurance? Be sure the foundation and roof are ok and there will not be a problem getting insurance. If there are any hail storms between the inspection and closing, be sure you send a roofer out to insure there was no damage.
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Dallas Texas, Agent, Dallas, TN
Mon May 26, 2008
Really not much when you purchase a Dallas home for sale, you are in "the home stretch" and unless your lender denies your financing. Most forget that behind a Dallas real estate agent there is approx. 25 other real estate professionals who have to participate in closing the transaction. All parties are held responsible for your closing date and time. YES there is always one file a year we might have problems on however with a seasoned Dallas real estate agent we stay on top of everything for you too close.
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