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3 things that can go wrong at closing

On Behalf of | Feb 17, 2023 | Real Estate Transactions |

Although many real estate transactions move forward without major challenges, there are always cases that serve as outliers by being far harder to handle than others. You could help your buyer wade through the properties on the market and find one that fits their needs perfectly. You can craft a very thoughtful offer that presents your buyers in the best light possible and makes the deal highly beneficial for the seller. Even with all of those efforts, sometimes a real estate transaction can fall apart just as a deal is about to close.

Sometimes, title issues arise at the last minute, which might make it impossible to secure a title insurance policy and move forward with the closing. There are many other issues that could keep your buyers from signing the closing paperwork and taking possession of new keys. Here are just some of the issues that could lead to a purchase falling apart at the closing table.

1. A seller with cold feet

Buyers are almost always the ones who would prefer to halt a real estate transaction. As a result, purchase agreements typically include contingencies that eliminate penalties for a buyer if they want to cancel a closing in certain situations.

However, there are sometimes sellers who regret their decision to list a property or to accept a specific offer. The agent representing them has an obligation to present all offers even after they have already accepted one. If someone offers $50,000 more for a house that has already been provisionally sold, a seller might try to cancel a pending sale even knowing they will likely have to pay quite a bit to get out of the affected agreement.

2. Major issues in the final walkthrough

The final walkthrough often occurs just days before signing paperwork, and it typically takes place after the seller has vacated the property. If buyers realize that there is major damage to the property during the walkthrough, the closing may end up falling apart unless both parties can negotiate a mutually beneficial agreement.

3. A personal disaster

Some kind of personal emergency that affects the seller or the buyer in a medical or financial sense could derail a closing. In some cases, the transaction can move forward after the parties reschedule. Other times, as in a job loss scenario, the sale may no longer be feasible.

Agents who are aware of the challenges that their buyers could face can help them plan for every possibility and better prepare their clients for the challenges ahead. Having support when you customize commercial or residential real estate documents or review paperwork for your clients can help you catch warning signs of possible issues to come and better all interests involved as a result.