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Top 6 Real Estate Closing Deal Breakers and How to Avoid Them
When it comes to real estate sales, getting to the closing table is like crossing the finish line of a race. It’s time to celebrate, right?! Unfortunately, there are many things that can impact an easy closing, and it’s important to be aware so you can help avoid them.
Here are the top six real estate deal breakers and what you can do to keep them from putting a wrench in your closing:
Don’t Let Complex Sales Ruin the Deal
Real estate sales aren’t always cut and dry. For instance, short sales, bankrupt sellers, foreclosures, divorces and trusts all have the possibility of being complex. When managing one of these sales, it’s important to keep open communication with the lender and title company in order to avoid a red flag. This doesn’t mean you shouldn’t take on these types of sales—most of the time they turn out just fine. But if you haven’t navigated a complex sale, be sure to partner with a title company like Velocity Title that is experienced in getting even the most complicated sales closed successfully.
Contract Addendum Changes: Don’t Keep Them a Secret
Contract changes can happen frequently throughout the course of a sale, that’s nothing surprising. However, it’s when these changes aren’t transparent to all parties involved that can put a deal in jeopardy. When a contract changes, the lender and title company should be told right away. There are some changes that don’t always require an addendum, but those that do need to be approved by the lender prior to closing.
Your client doesn’t want to get to the closing table only to find out the lender wasn’t made aware that a home warranty was added onto a contract and this addendum never had time to be approved. The bottom-line is to share any changes that take place so all parties can be up-to-date and legally prepared for closing.
Don’t Breeze Over Instructions and Communications
One sure fire issue that can hold up a real estate closing is if you or your clients haven’t followed your title company’s instructions. Whether an online closing or in-person, a good title agent will keep you informed every step of the way—and that includes emails with detailed information on any to-dos. By staying on-top of all communications regarding your upcoming closing and checking with your client to ensure they are doing the same, you will avoid this common deal breaker! By partnering with Velocity Title, you can rest assured we will provide you with all the information you need and guide you through any necessary steps to easily get your closing to the table.
Never Overlook the Earnest Money!
According to Rocket.com, “An earnest money deposit is typically around 1 – 3% of the sale price and is held in an escrow account until the deal is complete. The exact amount depends on what’s customary in your market. If all goes smoothly, the earnest money is applied to the buyer’s down payment or closing costs.”
In real estate deals, earnest money deposits should be deposited immediately. Once deposited, the lender will need to see proof of these funds in order to move forward with the loan. Don’t let something as simple as documenting earnest money funds be what holds up a deal at closing.
Remember, Surveys are More Than Just a Map
Many real estate sales contracts require a new certified survey must be conducted prior to closing. If a survey is conducted, the title company needs to review this prior to closing. Surveys are so much more than just a map or plot of the property. They investigate right of ways, zoning, boundaries, easements and so much more. If a problem is identified, it can take time to remedy the situation. Say you find out the neighboring property actually is located on your clients’, and it blocks part of the driveway. This means they may need an easement which can take time to get approved. Bottom-line, don’t get the survey and wait to include it the day of closing.
Payoff Information and a Delay in Closing
Payoffs take time. After your client signs the contract, you need to get accurate payoff information to the title company. Your title company understands the importance of accurate payoff information and will help you through this process to ensure it doesn’t hold up closing and everyone can get the funds due to them, and on-time.
There are many potential closing-day deal breakers, but as a good real estate agent you understand the importance of identifying them before they become an issue. At Velocity Title, we have over 300 years of combined experience helping our clients navigate even the most complex real estate sales. By partnering with us, you have an expert real estate attorney on your side along with the latest in real estate technology and services. To learn more, click here.
Velocity Title Moves Your Business Forward
Velocity Title supports the real estate industry with a comprehensive line of title services that add value to each and every transaction. At Velocity Title, Our Personal Support Makes You Look Good Every Time! With a focus on the best CUSTOMER EXPERIENCE, Velocity Title incorporates leading title TECHNOLOGY and EXPERTISE into every transaction—enabling the final step in the home buying and investing process to be EASY, EFFICIENT and INFORMATIVE. For the perfect settlement experience every time, click here or contact us today!