Most people tend to think that by the time you reach the closing on a real estate deal, everything that is left is a formality. However, there is always the risk that something may go awry at the last minute, which you may need a lawyer to help you sort out. Here are five ways a real estate closing might go wrong:
- Problems with financing
- One potential problem that may arise during closing is that the financing for the sale falls through. This can happen for a number of reasons, such as the buyer suffering a major loss of income between the time when they sought pre-approval for a mortgage and when closing occurred, or due to a significant change in interest rates. If this happens, the transaction may be canceled entirely, since the buyer will not have a valid mortgage to complete the sale.
- Last minute title defect is discovered
- In theory, any title defects with the property should be discovered and addressed long before it gets to closing. However, there is always the chance that some previously undiscovered issue, such as an undisclosed lien or mortgage, could arise at the last minute. Unless the title defect is addressed, the sale will not normally be able to go through.
- Home inspection reveals serious damage
- It is common for most real estate contracts to include contingencies for what happens if significant problems are found with a property’s structure during an inspection. For example, they may find there is significant damage from termites or other pests, or lingering problems due to water leaks or mold. If an inspection does not catch these issues until late in the process, it can interfere with closing the deal.
- Disputes over closing costs
- One of the core issues that should be addressed in a real estate contract is who is responsible for closing costs. However, problems may emerge if those terms are not clear, or if closing costs significantly increase beyond what was expected. If that happens, it is possible the transaction will be halted until any issues can be sorted out.
- Other side gets cold feet
- Finally, there is always the chance that one side will get cold feet at the last minute, and start considering backing out of the deal due to anxiety. However, with the calm guidance of a real estate lawyer, issues like this can be sorted out so the transaction can continue as normal. That way, you can focus on closing out the deal, without concern for any problems that arise.
For more than 50 years, the New York lawyers at Elovich and Adell are ready to represent you in your real estate case. Our attorneys, conveniently located in Long Beach, handle personal injury, real estate, commercial transactions, criminal defense, and labor and employment claims all across New York State. For a consultation, please call us at 516-432-6263 or visit our contact page for more information.