6 Factors That May Prevent You From Closing on Your Dream Home, Part I

So you’ve put in an offer on your dream home, and the seller has accepted it! Congratulations, this is a very big step in and of itself. However, don’t get your hopes up too high just yet. An accepted offer most certainly does not mean that the home is yours.

There are some major mountains that you will have to cross in order to actually close on the home, and there are a number of things that could occur that will turn your dream home purchase into a nightmare.

In this two-part blog we will detail six scenarios and problems that could turn into a massive roadblock between you and closing on your new home.

1) Title search turns up issues

One aspect of your closing process will include paying a company to conduct a title search on the home. This means they will search for any sort of encumbrances such as liens against the property that would prevent the sale of the home or that you could even inherit if you purchased the property. If someone else has a legal claim to the property you want to buy, then there is little chance you will be able to close on it, and a strong chance that you won’t want to. For more information on title searches and title insurance be sure to check out our previous blog from August.

2) House is appraised too low

The appraisal is a key aspect of the closing process. The lender from which you are seeking to obtain the funds needed to purchase the house will require that a professional appraisal be conducted on the home. They want to ensure that it is actually worth what you will be paying to purchase it in order to protect their stake in the sale. If that appraisal comes in below what you have agreed to pay, the bank will probably not issue you the loan. You can request the seller to lower the price to match the appraisal, but they are under no obligation to do so. You could also look for a second opinion from another appraiser or pay the difference in cash.

3) Sale of your own home falls through

Many buyers may need to complete a sale of their own home in order to have the necessary equity to purchase the new home. As we’ve mentioned throughout this blog, there are a number of factors that could prevent a closing from occurring, whether you are the buyer or seller in the transaction. It is a realistic possibility that a sale you expected to close on your own home, and which would have provided you the funds to purchase the new home, falls through and prevents you from finalizing your purchase.

Be sure to check back soon for Part 2 of this blog where we will detail three more potential hurdles that could prevent you from closing on your dream home. For help with all of your closing needs, please do not hesitate to call the Law Office of Ray Garcia today.