The final days leading up to the closing of a real estate transaction is normally an exciting time for everyone involved. The seller is happy to finalize the sale of their home; the buyer is anticipating moving into their new home; and you, as a real estate professional, are of course looking forward to another completed transaction and your hard-earned commission.
But not every real estate transaction moves so easily along its projected schedule. There are many different things that can cause closing delays. Sometimes they are things you can control, and other times the delay could be out of your hands. But by being aware of how to avoid closing delays that you can control, you can help the closing process move along as smoothly as possible to the benefit of all parties.
Knowing how to avoid closing delays means knowing what potential issues you could face in a real estate transaction that could actually cause a delay. Consider the following common issues you will likely face at one point. Perhaps you already have experience with some of them.
This is unfortunately a common occurrence. It’s part of the reason contingencies for this are built into the real estate contracts. If there are major issues that the buyer doesn’t want to have to deal with, it doesn’t just delay the closing — it often results in the whole transaction being canceled.
The Appraisal Doesn’t Match the Purchase Price
Another common occurrence. And while this doesn’t always necessarily cause a real estate transaction to be canceled. It can definitely cause a closing delay. Unfortunately, there isn’t much you can do to learn how to avoid closing delays caused by a low appraisal.
The Seller Refuses to Do Repairs
Repairs that have been agreed upon by the seller but then not performed can cause closing delays. You know them as covenants in the contract. You also know that failure on the part of the seller to perform them can even sometimes cause the sale to be canceled. If you are the seller’s agent, you can help avoid closing delays by ensuring the seller understands what is required of them and that these covenants are enforceable.
Major issues with the title are also out of your control. But, if an issue does arise, you can provide counsel to your client and hopefully the problem will be resolved quickly.
Aside from the above-mentioned problems that can cause closing delays, the buyer, seller, or even other real estate professionals can also cause the real estate transaction process to falter. Follow some or all of the advice below to learn how to avoid closing delays, and you’ll greatly increase your chances of a smoother, quicker closing process.
Instruct Your Clients Properly
Many closing delays are caused by the buyer or seller simply not being sure of what they need to do. Aid your client when possible in completing all necessary paperwork required by other parties during the real estate transaction. It would probably also help to provide them with some sort of schedule or timeline so that they know what they need to focus on at any particular time during the process.
Keep Communication Lines Open
Being available for your client can also help to avoid closing delays. You’d be surprised how many closings get delayed simply because the client needed an answer to a question and the agent did not respond till the following day, or even longer. Enable your client to reach you via phone, email, or messaging app, and you’ll definitely help to keep the closing process flowing smoothly.
Make Sure Your Clients Perform All the Actions Required of Them
If you are the buyer’s agent, that means making sure they get their inspection scheduled in a timely manner, as well as any paperwork submitted on time. If you are the seller’s agent, you should make sure that the seller is properly handling any necessary repairs and, of course, that they will be ready to move out by the closing date.
It isn’t uncommon for both buyers or sellers to drag their feet on things, or just forget about them completely. During the closing process, they are also concentrating on plenty of other things, and sometimes a piece of paperwork or scheduling an appointment can fall through the cracks.
Stay on top of things by keeping notes of what needs to be done, and send your clients friendly reminders so that they don’t forget. It might also help to put together a checklist for them so that they can easily check off completed tasks.
Use an Electronic Money System
It was once traditional for home buyers to pay for earnest money deposits, closing costs, or other fees related to a real estate transaction with a cashier’s check or via a wire transfer. But payments made in this manner can actually cause extra, unnecessary delays.
For example, a cashier’s check requires the buyer to make a trip to the bank, and then scheduling a time to meet with the buyer to collect the check. And then additional time to deposit it into the escrow account.
A wire transfer also typically requires a trip to the bank, and while it takes less time to be deposited into the escrow account than the process for getting a cashier’s check, it is more susceptible to fraud.
Real estate fraud, especially wire transfer fraud, is a serious issue in the real estate industry. To combat many types of real estate fraud, real estate professionals have begun using an electronic money transfer system in lieu of a wire transfer or cashier’s check.
ACH & other electronic money transfers are much more secure than wire transfers. And, when used as part of an electronic money transfer system such as paymints.io, they save both time and money as well.
Paymints.io is a fully electronic, secure, and compliant solution built by a team of experts in Technology, Real Estate, Lending, and Title Insurance. Using this platform to make money transfers during real estate transactions eliminates the need for borrowers, buyers, sellers, and real estate agents to write paper checks or use wire transfers.
Agents can send a money request to the buyer at any time using a mobile device. Then, the buyer can send the money quickly and conveniently from their own home or wherever they may be, without the need for a trip to the bank. Paymints.io also uses bank-level security and encryption and advanced ID verification, significantly reducing the risk or wire transfer fraud. Additionally, disbursements can be sent using paymints.io! That’s right, agents, you can receive your commission or townships, attorneys, etc. can receive their funds with a few finger taps!
Get started using a secure money transfer system for earnest money deposits, closing costs, and other fees. Schedule a free demo of paymints.io today.