Plan for the unexpected and you’ll get to the closing table faster, and with less stress!
Some of the issues that can hold up the sale or purchase of a home can be relatively predictable. A home inspector finds an issue with the home that no one was aware of previously. Or, there’s a home to sell contingency and the buyer can’t get their current home sold. Maybe there’s a hiccup with financing.
Lately, however, there are a few other potential issues that home buyers and sellers should have on their radar, as well:
If you’re buying or selling a home with an older roof, HVAC system, water heater or other important systems, homeowner’s insurance can be a hurdle for the buyer. Here in Florida, an older roof can be especially problematic, as insurers are hesitant to write a policy on home with a roof that’s 15 or more years old (and for a little while, that number was closer to 10 years old). Old water heaters and A/C systems can also be a problem, as can galvanized pipes and certain brands of electrical panels/fuses.
If you’re selling a home that you think may have one or more of these issues, speak to your insurance broker so you can know what’s acceptable, and what’s not, before you go on market. You’ll save yourself time, stress and potentially money by addressing those issues now, rather than when you’re under contract and rushing to get to the closing table.
Appraisals continue to be a challenge as the housing market evolves. In some areas, lower inventory may mean it’s more difficult for an appraiser to find true sold comps nearby. Some lenders may also be experimenting more with so-called “desktop appraisals” that are done without anyone actually visiting the home (think Zillow’s Zestimates). And keep in mind, if an FHA or VA loan is involved in the transaction, and the appraisal comes in lower than the agreed upon purchase price, both buyer and seller may be forced to agree to the lower price, or cancel the contract.
When it comes to lending, timelines can also be a challenge. The sale contract for your home likely has deadlines for loan application and loan approval. And while most banks will do everything they can to meet those deadlines, sometimes they just don’t. And for a buyer with a loaded moving van, and a seller already moved out, those types of delays can be costly, and nerve-wracking.
Your purchase and sale agreement likely has a clause related to “Force Majeure”. This is standard language to protect both the buyer and seller in the event of circumstances that are out of either party’s control. Think of an earthquake, fire, or storm damage/flooding. However, it’s important to note, especially here in Florida, how hurricanes can impact the sales process. If there’s a tropical storm or hurricane warning or watch issued anywhere in Florida, insurance companies will stop binding coverage until the storm has passed and warnings/watches have expired. No insurance coverage, no closing!
A good real estate agent can help you avoid, or at least be prepared for, some of the pitfalls above, and many others. However, you can always reach out to your own insurance broker or mortgage lending professionals to understand what issues may, or may not, be a hinderance to getting to the closing table.