There are many things that can delay a closing...
You, the buyer, are relying on several professionals:
* Real Estate Agents - yours and the seller's
* Attorneys - yours and the seller's
* Mortgage - Loan Officers
* Mortgage - Underwriters (Be aware that many big banks have underwriters in a different state and may not have a personal relationship to influence the speed of their work)
* Title Companies
This is why having a REALTOR (R) to assist in the transaction is very beneficial!
Currently I am working with a young couple (19 years old)who have decided to take advantage of this market and purchase their first home.
While they have diligently saved money over the past year for a down payment, with little work history and low income, they can only afford around $200,000.
With the most homes in the area averaging around $300,000-$400,000, they have limited choices. Most of the homes in their price range are foreclosures.
After previewing several homes, we found a bank-owned property in Manville listed at $184,900. They made an offer, and had to use the FHA 203K renovation financing loan, in order to purchase the home without doing the repairs BEFORE closing/ownership. This loan seemed like a lifesaver, as a regular FHA loan has stricter requirments in terms of repairs.
Attorney review period ended...Contractors inspected the property and signed off on estimated bids for repairs...Appraiser completed the report....Title work was completed and cleared....BUT we still haven't closed.
Apparently, the contractor bids were needed sooner than they were submitted. **ADVICE TO ANYONE USING FHA Renovation Loans: contractor estimates should be submitted within 10 days after attorney review if you expect to close on time!!!
Since the bids were "late", the lender couldn't order an appraisal to be done for the property. Then when the appraisal was "ordered", the appraiser didn't call to schedule an appointment for 4 days. Once the appraisal came out to the property, they didn't submit a report for another 4 days.
NOW it's sitting in underwriting for the past week an a half - our contract closing date was July 11th. We submitted an extension to July 23rd and STILL HAVEN'T CLOSED.
The lender has played the "we're almost ready to give clearance to close" about 5 times so far, yet one thing after another, the slow reaction of communication has delayed the closing.
MEANWHILE, my clients are now being penalized for not closing on time at a rate of $100/day. While, I hope to close within the next day or two, I wanted to share my story to all REALTORS and buyers to inform you the importance of always being "A STEP AHEAD". Don't ever wait to any deadline, for you are relying on several different parties to work "for you" at their convenience.
My biggest disappointment in this whole transaction is that my 1st time homebuyers have had to go through this. I treat every transaction as if I was the one buying the home, and this "unusual" sequence of delays is costing them an additional $700 plus.
So, please feel free to share any similar stories to help buyers learn from our experiences and help avoid similar delays in the future!