Buying and selling real estate is a chance for a new beginning. For families, it means a new home and fun memories.
But selling a property can have its challenges and downfalls. There are so many parties involved in the purchasing process. So, if one thing goes wrong, your closing could be delayed, or even worse, the sale could fall through.
Here’s a look at the nine most common reasons you might experience a delayed closing date when selling real estate in Northeastern Illinois, from our team of experienced real estate attorneys at Diamond Real Estate.
1. The buyer’s lender is not ready
When a real estate buyer applies for a loan, there is a lengthy process that happens in the background. The lender has lots of work to do to get ready for closing. If the lender is delayed, your closing date could get pushed back. This isn’t always a bad sign though and many real estate transactions will still move forward after delays due to the lender.
2. The property did not appraise for the purchase price
This can be an issue because it might mean that the buyer’s lender is unwilling to provide a loan for the property at the agreed-upon purchase price. In this case, if the buyer cannot come up with an additional down-payment to cover the shortfall, you might need to renegotiate the terms of the agreement to reach a suitable price. Otherwise, your buyer may be able to cancel the whole contract and get their earnest money back.
3. The buyer lost their job due to the COVID-19 pandemic
The pandemic has caused serious disruption in the economy. With that comes job losses and financial hardships. If the buyer loses their job due to the COVID-19 pandemic or any other causes while the sale is pending, your closing date could be delayed or the sale might fall through. That’s because the buyer might now have a household income well below what it needs to be for loan approval. If the buyer has a mortgage contingency in the contract and their mortgage application is denied because they lost their job, they can usually cancel the whole deal and get their earnest money back.
4. The seller was not able to complete all of the required repairs in time
Following a home inspection, many buyers will provide the seller with a list of crucial repairs that must be completed before the closing. If the seller agrees to make these repairs and they are not completed before the closing date, the seller has breached the contract.
This means that the buyer has the option of taking the seller to court and suing them for their damages due to the seller not completing the repairs in time. This option provides the buyer the opportunity to try to negotiate an expensive closing credit or price reduction from the seller or delay the closing.
5. The well and septic inspection disclosed issues that need to be addressed
Most residential real estate contracts in Northeastern Illinois have a provision for well and/or septic system inspections. Sellers usually have to coordinate and pay for a well and/or septic test prior to closing.
If the test shows a problem, some contracts require sellers to make any required repairs prior to closing if the cost of the repair is less than $3,000. If the repair cost exceeds that amount, many times sellers have the option of fixing the problem or trying to renegotiate things with the buyer. If extensive work is required, this can cause a huge delay in the closing.
6. The seller was not able to completely move out before the closing
While this one might surprise you, it happens more often than you think. Moving out of your home is overwhelming and chaotic to say the least and things do not always go as planned.
Unless you negotiate an agreement with the buyer ahead of time, you have to be completely moved out of the home prior to the closing so the buyer can do a final walk-through and make sure the property is in acceptable condition before they complete the purchase.
If the seller is not completely moved out, the seller has breached the contract and the buyer is in a position to try to negotiate a credit (which is money out of the seller’s pocket) or delay the closing.
7. The seller left additional personal property
When buyers and sellers are negotiating the contract, sometimes additional personal property is made part of the deal. Sometimes buyers purchase additional things like boat lifts, wine refrigerators and furniture. Most contracts have a specific list of property that the seller is giving to the buyer and require sellers to remove all other personal property that is not physically attached to the home. If additional items are left behind and the buyer does not want them, the buyer is in a position to negotiate a credit from the seller to remove these items, delay the closing until they are removed or sue the seller for breach of contract.
8. The homeowner’s association did not prepare the closing documents in time
As we stated before, there are many parties involved in real estate transactions. In some housing communities, that includes the homeowner’s association (HOA). In Northeastern Illinois, most contracts require certain documents from homeowner’s associations on or before closing.
Many associations charge fees for the preparation of these documents and, as a result of these sometimes hefty charges, many times sellers wait until the last minute to order them. If the seller fails to get the homeowner’s association documents required by the contract and required for the closing, the closing date could be delayed.
9. The homeowner’s association or municipality requires an inspection and/or repairs
As we stated before, there are many parties involved in real estate transactions. In some housing communities, that includes the homeowner’s association (HOA). In Northeastern Illinois, most contracts require certain documents from homeowner’s associations on or before closing.
Many associations charge fees for the preparation of these documents and, as a result of these sometimes hefty charges, many times sellers wait until the last minute to order them. If the seller fails to get the homeowner’s association documents required by the contract and required for the closing, the closing date could be delayed.
Illinois Real Estate Legal Assistance
Buying or selling real estate is a big deal. It’s likely the most expensive thing you’ve ever purchased and includes contracts and terms you might have never heard of. Adam Diamond Law will be there to guide you through the process and ensure your legal rights are protected. Contact us for legal assistance during your next Illinois real estate transaction.
DISCLAIMER: Any information contained herein is solely for informational purposes. While it is important that you educate yourself, nothing herein should be construed as legal advice or create an attorney-client relationship. For specific questions, I always urge you to contact a local attorney for advice pertaining to your specific legal needs.
