California residents who anticipate selling or buying a home may face unexpected problems that could hinder or delay the closing. One major hindrance to the closing process is problems with the property’s title. In order to acquire title insurance, the home buyer has to get a title search to make sure the property is clear of problems such as a state or federal tax lien, a lien by a contractor or any claims from relatives or a co-owner.
Another issue that could delay or prevent the home from closing is the buyer’s inability to get insurance. If there was a significant claim filed on the home, insurance companies will know about it and may think the property is too risky to insure. Without insurance, lending institutions will not extend the loan to the hbuyer. Even if the buyer has the cash to pay for the home, it may be too risky to buy an uninsurable home.
Lending institutions also require the home to be appraised before they will agree to pay the entire purchase price. Therefore, if the appraisal reveals that the home’s value is lower than the purchase price, the bank may refuse to loan the full amount of the mortgage. However, another qualified appraiser could give a different opinion. Many lenders require a home inspection as well, and if it reveals serious issues with the home, the closing could be delayed while the parties negotiate to solve the problems. If the inspection finds major problems in the home, such as structural damage from termites or electrical troubles, the buyer might decide to walk away from the sale.
Buying or selling a home is often time consuming and riddled with discouraging complications. For this reason, those involved in such a transaction might benefit from contacting an who could assist with details including contract terms, title issues and the closing.