Buying a house is daunting. The entire process can be complicated. It’s also a process many people aren’t prepared for.

There are so many different elements to buying and selling a property. From the home inspection and an offer to getting a mortgage approved, there’s a lot involved.

One of the hardest elements to get a grasp on is the escrow process. This is the process that happens between the time a seller accepts an offer and the buyer gets the keys to the house.

With escrow comes a myriad of hiccups. The good news is that if you’re prepared, you can avoid them.

Here’s a look at a few common escrow issues and how to avoid them.

The Final Walkthrough

The home inspection is a common hiccup. It the seller hasn’t done an inspection before listing the property, an inspection could turn up all sorts of trouble, from mold and rodents to termite damage. If the seller refuses to fix the issues, the buyer could walk away.

The final walk-through usually happens the day of or before closing. If there are problems, it delays escrow. To avoid delays, sellers should have the home inspection done and any major repairs attended to before listing the house.

Buyers can also do their own inspections to prepare themselves.

Impractical Closing Dates and the Escrow Process

Unrealistic dates in the real estate offer are a common reason for escrow delays. Both a buyer and a seller who set unreasonable timeframes for completion can end up with delays.

It takes around 45 to 60 days for a property to close after the seller accepts the offer to purchase. The completion timeline all depends on the funding available to the purchaser, contingencies in the offer to purchase, and a variety of other elements.

To avoid delays, you need a professional on your side who can advise accordingly and ensure everything is in place.

Financial Issues

It’s important to make sure a buyer really can purchase the house. If the loan falls through, they can’t follow through on the purchase.

The best bet to avoid delays that could jeopardize the escrow process is to get a preapproved loan.

Hazard Surprises

During the escrow process, a buyer can view all known disclosures about the house, including any nearby potential hazards. If there are risks, for example being under a flight path, they might fall out of escrow.

While disclosure surprises can’t always be avoided, it’s important to familiarize yourself with property disclosure laws so you know what to ask the realtor before you go into escrow.

Title Issues

Unresolved title problems can also cause delays. Most of these issues are easy enough to solve, but they take time. The delays can then postpone closings or cause the transaction to completely fall through.

The good news is that you can avoid such delays by making sure you are aware of any outstanding issues early on. Title complications may discourage some buyers, but many are happy to wait when given a realistic timeframe.

Contingency Issues

If a buyer’s house is having difficulty selling, it may prevent escrow from going through. To avoid this, ensure the buyer’s home sells before going ahead with the buying process. That way any complications, later on, won’t affect the escrow process.

Unknown Liens

Whether you’re a buyer or a seller, you might not realize that a contractor put a lien on the property, which then causes a defective title. Alternatively, foreclosure properties may have a third lien on the house from a private lender that nobody knew about.

During escrow, a title search can reveal any problems that need resolving. What’s more, title insurance can protect the buyer and seller against any future claims.

The Lender Needs Further Documentation

When a buyer receives the mortgage commitment, it’s easy to think the funds are authorized and the closing can go ahead. But there are cases where lenders may need additional documents, and this can delay escrow. That’s why it’s important to ensure you have all the necessary documents ready before closing.

Besides the above common escrow process hiccups, sometimes the process is delayed due to one of the involved professionals, like the lenders or the mortgage processors.

You can ensure your home sale doesn’t fall through by having the right professional on your side.

Book a consultation at Principal Law Firm today for expert escrow assistance.

 

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