Roadblocks to a Successful Closing in Ann Arbor
One of the documents we send out to our sellers and buyers after they are under contract are potential roadblocks to a closing. They can be from various people involved in the transaction.
It is not negative just an information piece we put together to help them understand things beyond our control can occur.
I was supposed to have two closings this week; one buyer purchasing my listing went in to work and found her job was lost. The second one, found out he could not get his money out of China. So events beyond our control happened. There is so particular order to this.
THE LENDER 
•1. The lender does not properly qualify the buyer.
•2. Lender wants property repaired before closing
•3. Lender pulls a "bait and switch" on the buyers.
•4. Lender looses an entire file.
•5. Lender decides the file is too much work.
•6. Lender doesn't lock the buyer in and rates go up to high for the buyer to afford the property,
•7. Lender forgets to ask for a document needed for underwriters.
THE BUYERS 
•1. The buyers bring an attorney into the picture.
•2. The buyers are don't provide all the documents to their lender.
•3. The buyers don't have the funds to close.
•4. The buyers don't tell the truth on the loan application.
•5. The buyer's source of down payment changes.
•6. The buyers find a different property that comes on the market.
•7. The buyer's parents don't like the house.
THE TITLE COMPANY
•1. The title company doesn't find liens or until the last minute.
•2. The title company forgets to schedule the closing and is booked.
•3. The title company incorrectly prepares the paperwork.
•4. The title company does not pass along valuable information fast enough.
•5. The title company lets one party leave town without signing a necessary document.
•6. The title company doesn't coordinate properly with the other title company.
•7. The title company fails to get the death certificate or trust documentation in a timely manner.
THE SELLER
•1. The home has defects the seller is unwilling to repair.
•2. The seller's new employer changes their mind.
•3. The seller removes personal property from the home, the buyer was expecting.
•4. The seller delays the move out date, can't get a truck or van.
•5. The sellers don't have enough funds to bring to closing.
•6. The sellers can't clear up lien problems.
•7. The sellers did not own 100% of the property.
•8. One party decides they are not moving in a divorce.
THE APPRAISER
•1. The appraiser is not local and doesn't comp the value correctly.
•2. The appraiser can find no comparable satisfy the underwriters.
•3. The appraiser makes mistakes.
•4. The appraisal comes in too low.
THE REALTOR
•1. The Realtor forgets to schedule the closing.
•2. The Realtor doesn't disclose to the sellers their net.
•3. The Realtor takes a vacation and forgets to inform everyone.
•4. The Realtor doesn't have a good relationship with their party and brings up issues at the table that freaks the party out.
•5. The Realtor quits the business and doesn't let anyone know.
•6. The Realtor turns over the file to a new assistant.
•7. The Realtor doesn't answer calls to get issues resolved by contract dates.
Of course this doesn't happen all the time, but it is prudent to prepare your clients for potential roadblocks that might prevent them from getting to the closing table. We are use to dealing with last minute opps all the time, but the folks buying or selling are not.
Feel free to leave your comments below of roadblocks you have encountered.
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Buying or selling a home in Ann Arbor? (or anywhere in Washtenaw County) our goal is to help you with the best resources available. TEAM approach with 6 Buyer Agents 734-216-2822 Missy@MissyCaulk.com
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Missy:
Oh, yes, the list of potential roadblocks is awesome. Have experienced a few of these. how about the buyers just change their mind? Or find something they like better. Of the bank'srequirements change at the last minute and the buyer no longer can meet them?
I always talk with buyers and sellers about some potential issues that can crop up so they are prepared mentally and DON'T expect that all will go smoothly. I'd rather thay anticipate problems and not have them occur than the opposite.
Jeff
Hi Missy - oh gosh, I could feel the pain associated with some of these 'roadblocks'.....ugh! And I found myself chuckling over some them because people just would not believe that they really do happen......
Ann
That's a LOT of blockage...we need some Drano for that :)
Oh those darn roadblocks - they are similar everywhere... guess where I found this ??? you got it Twitter - tweet tweet
The Buyers cont'd:
8.) Buyers make major purchase with credit right before closing date.
(Love the picture of Buddy and Kitty-that-needs-a-name-I-vote-Twitter)
Missy - you are brave to give this to your clients - I'm afraid it would freak some of them out too much. Like, as in PANIC ATTACK.....
Definately good info to keep in mind
I swear I have encountered all of those! LOL It's maddening, but in the end ... we are still going to get the blame. We are the primary contact for our clients. It's just a fact of life in the real estate business.
Missy.,,.... in regards to the items listed under lender... I would say that 6 out of 7 of those are very acurate. ..will read the rest now...
I laughed so hard I cried - the truth behind this is not funny - but reflecting to some of them caused me to chuckle and say oh yeah.... so true
I guess it's no wonder that I am finding I much prefer photography, writing and blogging! The stories I've heard and experienced never cease to amaze. A friend of mine had a seller die the day before closing.
The Realtor takes a vacation and forgets to inform everyone.
That's by far the funniest... and sadly I've seen it happen more than a few times. I can't help but wonder what the heck they were thinking.
Good idea this list. I think it might be a good listing piece so that they understand some of the issues we are skilled in dealing with, something to think about.
HI Missy, So sorry to hear about your two non-closings, I would like permission to copy your list and put in my files, yesterday I had a closing that was delayed 5 times, yes 5 times, mostly lender forgot this or that paperwork, but in the end our biggest delay was Mother Nature, Hurricane Ike, shut down the power to Houston for 9 days (the banks headquarters). All ended well and thats a good thing.
Gail, email me and I will send the whole list, this was just a portion or the post would have been too long.Missy@MissyCaulk.com
Miriam, I ONLY do it after contract, I would be afraid it would be overwhelming to soon.
Susie, this is ONLY a smitgen, but as I said they don't ALL happen and sometimes NEVER.
Kim, it is just a point of contact to help them know some things are out of our control.cuz they are... Nope never had anyone panic.
Jeff, those are great additions, thanks!
Carol, I only get blamed when the house doesn't sell, but not for these things, they are so not in our control. Enjoyed speaking with ya yesterday.
I agree that the "non closing" is so difficult to take. I tell buyers all the time, that if a home they are interested in goes under contract then becomes available again, that doesn't mean a thing. There might not be anything wrong with the home and "back on the market" is just the difficulty of our business these days.
All right Missy I came over here looking for a "cheery" post to brighten my day and all I found was the weekly nightmares of being a Realtor:)
Missy,
Thank you for taking the time to write such a wonderful post. I agree with every road bloak you noted, of course their our others, unfortunately. This market keeps all of us on our toes!
Great list Missy,
But don't forget:
- Seller leaves junk in the house. (During the walkthrough on a house on Washington in Ann Arbor we found the seller had left the 3 car garage full of junk. They said "It was all here when we moved in to it needs to stay".) I think the listing agent was partially to blame because he must not have gone over the contract well.
- Seller removes part of the real estate. (We had a seller change out a nice dining room light with a cheap one hoping the buyer wouldn't notice.)
In Illinois, both parties must hire a real estate attorney...so when I saw that on your list, I had to chuckle.
Jon, yep had both that happen a few times too. Guess we have to write it all down on conract. REMOVE JUNK.
Kelly, so you all don't use title companies to close? Either does Canada.
Bill, LOL
Cherimie, yes it does but that's why I love it, every transaction is different.
Karen, and on one of those I got another offer right away and is closing Oct 10th.
I don't send a list - I agree to what someone said - I think it might freak out some buyers - I have been working with a lot of first time buyers. This is one that I talk about regularly after it happened - you kind of said it with 'the source of downpayment changes'. In my case the loan officer never told her about documenting her source - she was depositing some social security checks of her mother (as rent) and did not have a paper trail. She had the money but it was a mess.
Great list, may I share it? And add some...like out of area Realtor who doesn't know values. Out of area realtor who hasn't seen the property or is a lender and is writing the offer and doesn't know the area...oh my pet peeves are showing. Client who has a child support lien that they didn't clear. Client who doesn't think their late or collection accounts should matter.
Missy, Unfortunately, the list will only get worse. It has little or nothing to do with the market, but rather with people in this business who are either incompetent, lazy or both. Just the perspective from a broker with 33 years experience who remembers the "good old days" Karen
Good list. My favorite is the attorney - how to make a transaction or closing a lot more troublesome than it needs be.
But the absolute worst are the divorce attorneys who give clients advice without any knowledge of the real estate transaction. I had one this year tell a seller it was OK to put the home on the market - divorce papers were just started. We got two offers the first weekend it was on the market. Attorney told seller she couldn't sign any papers until certain divorce papers were agreed to and signed. She reminded him that he had told her she could list the home. His answer - "well, gee, I didn't think it would sell for 6 months or so!".
I've also had sellers go on vacation/business trips/house hunting trips and fail to sign their deed or other important papers prior to leaving.
Buyers have also left town without making arrangements to sign loan docs!
Sometimes our jobs are more about "fire fighting" and planning around disasters than actually working to buy or sell homes for our clients!
Missy, I personally loved your list! I have one as well. I think we should lay it all out on the front side, especially in these times of many road blocks. I am going to email you my LONG list and maybe you'll see something else to add! BTW...my favorite on your list was "Realtor forgets to schedule closing". LOL...
I had a deal negotiated verbally with a written pa when my buyer informed me his brother took $50,000 out of his Turkish bank account. Gotta love it
Missy.. this is a very detailed list you have. One recent roadblock I ran into was the seller had a Jr Lein that ws not disclosed.
Missy, there are more and more but you thought of a bunch of them! Anything can happen. I had a Realtor friend who lost a couple in a car accident...on their way to the closing. How sad is that?
Nothing would surprise me. I'm sorry your deals are tougher. Mine are tougher too. They keep getting worse and worse. One thing after another.
Good luck with this and if anyone can pull it off it's you.
Later in the rain~Deb
Missy, I am so sorry for you since I am selling in your same market, your same office. I agree with all of what you detailed though have not encountered all of the same, particularly the realtor dysfunctions (as they might apply to me...). I will say though, a recent closing of mine happily had fairies add a front porch step, slap up some ceiling drywall (tree fort style) and more, all in the name of closing a deal. Are banks really so ignorant as to what these minor repairs do to their bottom line? I don't know HOW these things were acccomplished but it gave my buyers 88,000 in instant equity at closing, and we did close. I know the tooth fairy never gave ME that kind of money...
This is a fabulous list. I'm going to 'borrow' it...if you don't mind. I know you don't because you are sharing it here on AR with ALL your buddies. This really is a comprehensive, upfront way to stay ahead of the game. GBU, Missy!
I don't know how you continue to still amaze me, but you do. I always go over the "glitches" that can occur and try to prepare both buyer and seller, but I never thought to put it in writing as I have done with most everything else.
I'm so sorry to hear about the cancelled closings. Dang it, it's happening much too often lately.
My favorite not on the list is "Buyer went and bought some large item and now the funds in the bank account have changed...no loan". It is kinda like the "Buyer doesn't have funds" but I always tell my first time buyers especially, do not buy anything large and pull money out of your bank account between now and the day we close.
Bummer on your two closings...getting things to the table are defintiely more challenging than a year ago.
Lately, Missy, our list could be summed up under the Lender list. We've had more closings crash and burn in the last three months due to lenders than I have ever heard of in the 6 1/2 years I've been in real estate. Crazy stuff!
Missy- Excellent list. I could almost swear that my last transcaction had all of them! Including the bad ones on my part =) I have bookmarked for future reference.
Best,
Scott
Missy- WoW, what a long list that is and sad to say we could probably make this list longer.
Lately, but not in the past, lenders are not following through with their commitments. They are overpromising and underdelivering. THey need to set the record straight.
And... with each transaction, seemingly, we come up with another one to add to the list. :-)
Missy- Thanks so much for the exhaustive research ... it's amazing how many roadblocks can exist ... it makes me proud when we're able to work in harmony with good agents, title companies and lenders to keep these potential pitfalls from hindering a successful close.