Both the seller and the buyer involved in a residential real estate transaction in California have an interest in completing a transaction in a timely manner. It can take weeks to plan for a move to a new home, and there are many other logistical challenges that people have to address when selling or buying residential real property.
Once a buyer makes an offer that a seller feels is reasonable, everyone usually assumes the transaction should move forward without complications. However, some closings end up falling apart right before the parties sit down to sign documents.
What issues might lead to a canceled or delayed real estate transaction in California?
An appraisal gap
California is home to some of the most expensive and competitive real estate markets in the country. Buyers often need to make their best offer immediately to have any chance of securing the property. However, if they are too aggressive with the amount they offer, they may not be able to finance the transaction. If an appraisal comes in low, that may lead to a cancellation of the closing.
Inspection or survey issues
An appraiser isn’t the only professional who looks into a property to determine if a mortgage company should finance a transaction. An inspector should also look at the condition of a property. If there is a large plot or any questions about the boundaries of the parcel, then a survey may be necessary as well. Unexpected outcomes during the survey or inspection process could lead to renegotiations or a canceled closing. Title issues that show up during the title search for the property could also bring the transaction to a halt.
There are a host of challenging circumstances that could suddenly arise and diminish someone’s ability to follow through on a real estate purchase agreement. The buyer might lose their job and suddenly be unable to obtain a mortgage. The seller could find it prohibitively difficult to locate a new home and may back out of the transaction at the last minute. Issues ranging from divorce to health challenges may suddenly complicate a situation and force one of the parties involved to cancel the closing.
Canceled closings can cause expenses and frustrations everyone involved. However, it is possible to protect against some of these issues with a robust contract. Acknowledging and preparing for possible complications that could alter plans for a real estate closing may benefit either party involved in a transaction.