So you're buying a home for yourself or you might even be buying an investment property. You have a signed contract and have signed all the loan docs. Weeks and sometimes months go by without a closing. WTF is going on you ask? Let me give you some insight from the buyers side as well as the sellers side on 3 types of holdups that can stall your closing. And what you can do to speed up the process.
Loan Conditions- Once your loan is approved, the lending institution will issue a list of conditions that need to be provided before they issue a clear to close. These items may include but are not limited to recent check stubs, tax returns, appraisal, payoff letters, proof of insurance, verifications of deposit, ban k statements, job verifications, etc. Always stay on top of your loan officer as well as your attorney and request a list of these conditions so that you can work together on collecting them for the bank underwriters. The sooner these items are turned in, the sooner you will arrive at the closing table.
Cloudy Title- This is where a good attorney comes into play. If the property does not have a clear title, a lender will not close on it. Clouds on title can include tax liens, mechanical liens, PIN number mix-ups, ownership drama, you name it. All of these items are on the sellers behalf and need to be addressed by them. Even though you really cannot control how quickly these things are cleared up, your attorney can put pressure on the sellers side to get it done asap. Sometimes a cloudy title can take a long time to clear up and may hold up your purchase a lot longer than expected. Make sure your team stays all over the seller to press these issues in order to obtain a clear title so you can take over ownership of the property.
Lending- Your lending team plays a huge role in getting a loan approved and funded. The loan officer, processer and underwriter are your banks back office. The loan officer originates your loan then passes it off the initial package to processing to expedite the process. Your processer prepares a tight package off to the underwriter for final approval. My advice to you...stay on top of your loan officer at all times. The loan officer directs all aspects of the lending process. You and your attorney should let them know up front what you expect and that you need to close the transaction as swiftly as possible. It is very easy for your loan file to get thrown to the bottom of the pile if you don't put a little pressure on your lending team. I've seen it happen way too many times.
At the end of the day your lender, both Realtor, attorneys, title companies all need to work together simultaneously in order to ensure a smooth purchase process that will get you to the closing table a quickly as possible. Time is always of the essence in real estate. Make sure no one wastes yours. JT
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