Closing on a house seems pretty straightforward. There’s a house for sale that you want to buy. You send your offer to the seller. You both agree to the terms in a contract and sign it. Easy, right? Yeah, not so much.

Once the buyer and seller sign the contract, the closing process begins — and therein lies the rub. It almost certainly will not move as quickly as anticipated. While seamless closings are ideal for everyone involved, they almost never happen unless the buyer is paying cash on the home, and even then there can be a roadblock or two.

In the February 2020 Realtors Confidence Index survey by the National Association of Realtors, 77% of real estate agents responded that contracts closed on time, and 19% reported delays but eventually closed; 4% of contracts were terminated.

Out of the delayed contracts, the most common causes were financing issues (37%), followed by appraisal issues (18%) and inspection issues (16%).

So the answer to “how long does it take to close on a house?” is not a simple or finite one. You may encounter opposition along the way, but with the right preparation and foresight, you can deflect and move right past it. These are the top home closing delays that could affect if and when you close on your new home, and how to overcome them.

1. Loan approval

For most buyers, financing a home through a bank or lender with a mortgage loan is necessary to purchase the property. Because the entire sale hinges on securing this loan, it is a top criteria for closing, and it’s also the most common reason for a delay in the closing process.

How it can delay closing

There are several ways that obtaining a loan by the closing date can be challenging. Interest rates can spike unexpectedly which can affect qualification if the loan is not locked, or the buyer’s credit score or income can change, causing the underwriter to reject the loan. If the lender can’t grant the buyer a loan by the closing date, the contract could be canceled or expire if the seller does not agree to an extension.

Dodge move

The best way to help avoid mortgage loan setbacks is to get preapproved for one before even submitting an offer. In fact, buyers should go one step further (if they can) and get pre-underwritten for a loan, which offers even more security for both buyers and sellers.

Not only will this give the seller additional confidence in accepting the offer, but it will help you get a quick and smooth loan approval once you’ve entered the purchase contract. To protect against a delayed or derailed loan approval, the buyer should include a financing contingency in the real estate contract so they can back out with their earnest money returned if something unexpected happens (such as losing a job).

2. The appraisal is lower than the purchase price

Lenders providing mortgage loans require an appraisal to confirm that the actual value of the home is at least equal to the loan amount. However, sometimes buyers submit an offer that’s higher than the appraisal value.

How it can delay closing

Because the loan will only cover the appraisal amount, if the appraisal comes in lower than the offer price, the buyer will need to renegotiate with the seller or come up with the extra money themselves, which they may not want (or be able) to do. Likewise, the seller may not agree to lower the price of the home.

Another option would be to request a second appraisal. No matter what course buyers and sellers choose in this scenario, a low appraisal can set back the timeline or possibly lead to termination of the contract.

Dodge move

If you love the home and are not worried about its specific value, an easy way to avoid a low appraisal blowing up a deal is to buy the home outright with cash instead of financing it, in which case an appraisal is unnecessary. That said, you have to be careful with this option as you risk buying a home that is overvalued.

If that’s not an option, the buyer can:

• Request a second appraisal
• Renegotiate the price with the seller
• Pay a larger down payment so the loan will still cover the appraisal value
• Pay the difference out of pocket

If this problem can’t be resolved, an appraisal contingency in the contract allows the buyer to cancel the agreement and retain their earnest money deposit.

3. Repairs identified in the inspection

The home inspection is one of the most important steps in the purchase process and one of the strongest variables that can affect closing. Although this is frustrating to homebuyers, it illuminates pressing issues that buyers must address before purchasing the home instead of waiting to discover them weeks or months after closing.

Accomplishing this step requires hiring a qualified inspector to assess the property for any damage and identify necessary repairs before purchasing the house.

How it can delay closing

Major repairs that come up during the inspection, like foundation issues and pest infestations that are costly enough to reconsider the offer price, require renegotiating the contract. There also may be minor issues that come up, but usually those are better handled by the buyer.

Dodge move

The good news is that the buyer has options when the inspection reveals major repairs needed, so it’s not a deal-killer. Those include:

• Asking the seller to make certain repairs themselves before closing the deal
• Requesting a reasonable decrease in the sale price based on the cost of repairs
• Asking for a non-monetary exchange like including certain appliances or furniture to offset the repair costs
• Asking for a home warranty to cover questionable or outdated features

If all else fails and the repairs are too significant, it’s important to have an inspection contingency in the contract that allows the buyer to cancel the deal after evaluating the inspection report without losing their earnest money deposit.

4. Problems with the title

There are many issues that can arise from a title search on a home for sale — some small, some big — that must be addressed before the property can be legally transferred to the new owner. A title search of public records (typically going back 50 years) can reveal common property title discoveries tied to the house, such as a contractor’s lien, an active bankruptcy of the seller, taxes on the home still owed, or a child support lien, to name a handful.

How it can delay closing

While resolving a contractor’s lien is fairly typical, it can cause a closing delay if the contractor cannot be located to settle it. Additional remediation required by the title company may take more time beyond the closing date, causing a contract extension.

Dodge move

Minimizing clouds in a title search requires the seller to be proactive. That means they should pay off any debts they have associated with the house and sit down with a real estate attorney to review all the pertinent documents for red flags before even putting the house on the market.

Buyers should also consider purchasing title insurance in case the title search misses something and a property claim is made after closing.

5. Homeowners insurance not secured

While not legally required for every home sale, obtaining a mortgage loan is contingent on having homeowners insurance. A bank or lender requires homeowners insurance in case the home is damaged or destroyed by a natural disaster or any other unexpected event to protect themselves and the owner.

How it can delay closing

If the buyer is financing the home, the lender will not grant a loan without proof of homeowners insurance. Also, in many cases, the buyer must present homeowners insurance on the closing date to complete the sale.

Dodge move

The cost of homeowners insurance depends on the purchase price of the home. Buyers should budget accordingly and start shopping for a policy as soon as the purchase agreement is signed.

5. Home sale contingency

If the buyer enters the purchase contract before selling their current home, they can include a home sale contingency that gives them a certain amount of time for the sale to close before moving forward with the new home purchase.

In other words, the buyer has to sell their current house before they can close on the new house.

How it can delay closing

If the buyer’s home doesn’t sell by the agreed-upon date or for at least the asking price, the buyer can back out of the contract. Having the home sale contingency in the contract already pushes back the closing date, and if the home doesn’t sell in time, the deal could fall through entirely.

Dodge move

If the buyer is otherwise a good candidate, the seller may decide to move forward with the contract but add their own kick-out clause. This is a safeguard for the seller if they find another buyer who is ready to purchase the home.

If the kick-out clause is activated, the current buyer has the option to remove the home sale contingency and move forward with closing. If not, the seller can back out of the contract.

6. Short sale

A short sale is when a mortgage lender agrees to accept a lower payoff amount than the remaining balance owed on a home. Usually this happens when the owner can’t fulfill the balance due to a proven hardship, or the housing market has fallen to the point where the home is worth substantially less than it was at the time of purchase.

How it can delay closing

The lender must approve a short sale offer in advance, and this is a much more complicated and often lengthy process than a normal mortgage. It can take weeks to months for the lender to approve a short sale.

Dodge move

In a short sale, inking the deal requires three parties to agree: the buyer, seller, and lender. But that doesn’t mean there’s nothing buyers and sellers can do to increase the chances of lender approval.

Both the buyer and seller should know what they’re getting into ahead of time, and work together with their agents to create a short sale package that will be attractive to the lender. And of course, each should work with a real estate agent who is experienced in short sale arrangements.

7. Remaining debt on the property

Selling a home when there’s a lien on the home left to pay off is probably due to some unforeseen circumstances, like relocating for a job, moving for family reasons or any other curveballs life throws at you.

How it can delay closing

If the owner owes money on a tax lien or a contractor’s lien and needs to sell the home quickly, you’ll have to negotiate who’s going to pay the outstanding debt — because if you close without paying it, then it becomes your responsibility.

Dodge move

The title search should help surface any debts or liens on the property apart from the mortgage loan. If the title search misses something, the buyer will be on the hook for the debt unless they’ve purchased title insurance.

8. Closing costs

The cost of buying a new home doesn’t end with the offer. There are also closing costs to consider, which can add up to 5% of the total loan amount.

How it can delay closing

If buyers haven’t budgeted for closing costs to buy a house, they may be in for a surprise. This could threaten their financial ability to purchase the home or lead to further negotiations with the seller.

Dodge move

If the closing costs present barriers to closing, seek out ways to lower them, like shopping around for less expensive vendors involved in the closing process by utilizing the Loan Estimate form provided by the lender.

Another strategy, especially in a buyer’s market, is to ask the seller to contribute to the closing costs.

9. Not working with a qualified real estate agent

Hiring a licensed and experienced real estate agent is invaluable to both the buyer and seller in the home purchase process. Not relying on their expertise for guidance and negotiations through each step could result in huge missed opportunities.

How it can delay closing

It should be clear by now that buying and selling a house is a complex endeavor! That’s why it’s the real estate agent’s job to advise and protect their client.

Real estate agents can help with almost any of the issues outlined above, including identifying which repairs to ask the seller to fix after the inspection, negotiating closing costs, conducting a short sale, consulting on what contingencies to include in a contract, recommending real estate attorneys, and much more. Not taking advantage of these services could set back or derail closing.

Dodge move

At the risk of stating the obvious, hire a reputable real estate agent with a proven track record for a successful home purchase.

10. Unrealistic contract dates

A property survey shows the boundary lines of a home determined by a qualified land surveyor. A seller might order one as an additional tool for prospective buyers. A buyer might want one to confirm that there is not a neighbor’s fence or other obstruction encroaching on the property.

In general, any property owner might desire a survey to identify any easements allowed on the property and opportunities to build upon the property within its boundaries

How it can delay closing

If the property survey reveals encroachments on the property for sale, this can lead to potential cancelation of the contract. This can happen because for one, the buyer wants the rights to their entire property, and also because the title and the boundary lines might not match up.

Dodge move

If a survey proves that (for example) a neighbor has a fence or other structure on the property which is causing a conflict with the sale, you can hire an attorney to facilitate a lot line agreement. From there, a resolution could include removing the encroachment, selling the piece of land in question to the neighbor or any other recommended negotiation.

In other words, this is a good time to talk to a good real estate attorney.

12. The Closing Disclosure is late

The Closing Disclosure issued by the buyer’s mortgage lender is one of the documents needed at closing. If it’s not presented correctly and on time, closing will be delayed.

How it can delay closing

Lenders must give buyers the Closing Disclosure at least three days before the scheduled closing so that the buyers can review it for any errors. So for one thing, if the lender is late delivering the Closing Disclosure, this could delay the closing.

In addition, all of the information in the lender’s Closing Disclosure must be accurate and error-free. There are a lot of minor and major details, including names, addresses, payment amounts, terms, conditions, and more. If they don’t all match up, the lender must correct and resubmit the document, thus holding up closing.

Dodge move

To proactively avoid Closing Disclosure mistakes, ask the lender for the document as early as possible to check that all information is correct, and confirm all closing materials are received in good order with your agent before sitting at the closing table.

13. There’s an issue with the final walkthrough

The final walkthrough is one of the last steps before closing, and it’s one of the most important. It ensures the seller has the house in the right condition according to the terms of the contract, including completing all necessary repairs, removing anything extraneous that’s not supposed to stay behind; the final walkthrough also is another opportunity to look at the home’s major systems, and to ensure that nothing was damaged on move-out.

How it can delay closing

If the final walkthrough reveals unresolved issues, especially regarding incomplete repairs, those will have to be addressed before closing and might require further negotiation between the buyer and seller.

Dodge move

The seller should confirm all boxes outlined in the contract are ticked before the final walkthrough. If they’ve failed to do this, the buyer should contact their real estate agent immediately.

14. Document errors cause loan underwriting problems

16. There’s a pandemic!

The global COVID-19 pandemic has presented a whole host of issues, including the status of real estate contracts. In the March 2020 Realtors Confidence Index, NAR reported that 8% of contracts were terminated and 21% were delayed. Among the terminated contracts in March 2020, 45% were terminated either because the buyer lost their job or due to financing issues, and an additional 47% reported “other” reasons (mostly related to the coronavirus pandemic).

How it can delay closing

Many states are still enforcing shelter-in-place orders, and real estate may or may not be considered an essential service, so confirming that is the necessary first step. Appraisals and inspections could likely be prohibited or delayed in this unprecedented situation.

Dodge move

Work with your real estate agent to negotiate adding a coronavirus addendum to your current contract, which could adjust the closing date or include contingencies that will protect you from coronavirus-related closing delays.

17. Someone drops a ball

There’s so much involved in real estate contracts and so many steps required to close the deal that human error and mistakes along the way are inevitable.

How it can delay closing

No matter the failure on behalf of the buyer or seller, be it repairs not made, incorrect documents, the buyer can’t sell their current home in time, or one of the many other ways a real estate contract can go wrong, it can lead to a delay or cancellation of the deal.

Dodge move

The best way to protect yourself from someone else’s mistakes in a real estate transaction is to first hire a trusted, qualified real estate agent; they can help you build in contingencies in the contract for possible conflict.