Tuesday
August 22, 2017

Closing Problems Causing the Most Delays

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Closing Problems Causing the Most Delays

Watch out for financing, home inspection, and appraisal issues. These are the three most commonly cited culprits for delays or even terminations at closing lately, according to the REALTORS® Confidence Index Survey.

Read more: Average Time to Close: 44 Days

These issues comprised more than a quarter of all the delays in contracts from the February through April. Sixty-six percent of contracts were settled on time during that period, while 28 percent of contracts faced a delay. Six percent of contracts were terminated.

REALTORS® identified the following most common problems that delayed contracts (but these contracts did eventually make it to settlement):

  • Issues related to obtaining financing: 38%
  • Appraisal issues: 22%
  • Home inspection/environmental issues: 12%
  • Titling/deed issues: 11%
  • Contingencies stated in the contract: 10%
  • Issues in buy/sell distressed property: 5%
  • No problems encountered: 5%

Among the contracts reported terminated, the following were the most commonly cited reasons by REALTORS®:

  • Home inspection/environmental issues: 28%
  • Issues related to obtaining financing: 21%
  • Appraisal issues: 12%
  • Contingencies stated in the contract: 12%
  • No problems encountered: 5%
  • Titling/deed issues: 4%

Source: “Contract Settlement Issues in February-April 2016: Financing, Home Inspection, and Appraisals Are Major Issues,” National Association of REALTORS® Economists’ Outlook blog (June 1, 2016)