Knoxville Real Estate Closings
How Long Does It Take to Close on a House?
The average process for closing on a house takes 41 days.
32% of all transactions encounter some type of delay or hang-up before closing.
46% of the delays are financing issues. Most delays happen because buyers take on more credit before their closing date.
There’s no reason to stack extra debt on top of your mortgage. That decision will send your mortgage approval straight back to the drawing board. Borrowing more money changes your credit score. Your lender will have to stick their noses in their calculators to adjust your mortgage agreement.
Another reason closing could delay is if you aren’t upfront with your lender about all your payment obligations. This could change your debt-to-income ratio—which means more recalculations.
Closing Problems That Cause Delays
Buckle up. It’s time to prepare yourself for other potential delays that could hang up your ability to close on a house. These problems could happen any time after your offer—even up to and including the day of your closing.
It’s possible an official appraisal could be lower than expected. Appraisers use comparable home sales to calculate a home’s value. In some areas, home prices are rising so fast that those comparable sales haven’t caught up. Also, you may end up with a low appraisal if the home you’re buying has features that aren’t typical for the neighborhood.
A low appraisal is a warning sign you may be paying more than the home is worth. No matter the cause, your lender can’t approve a loan amount for more than the appraised value of your home. If you do end up with a low appraisal, you have a few options. You can:
Ask the seller to lower their asking price. (You might have a contingency in the contract that protects you from buying a home for more than the appraised amount.)
Challenge the appraisal or request a new one if it contains incorrect information. (Talk with your real estate agent about this.)
Cancel the contract.
Meet in the middle with the seller to pay out-of-pocket cash.
If you decide on the last option, proceed with caution. Adding cash to make up for a low appraisal means you’ll likely have to live in the home longer for its value to recover. If you can’t negotiate a better deal with the seller, your safest bet may be to let the home go.