5 ways to avoid delays in closing a deal

Published 6:23 pm Friday, April 23, 2010

Springtime usually sparks a rush of activity in the real estate market. Unlike in the colder months, the warmer weather inspires many buyers to visit open houses, present offers and close deals.

This spring, there is added pressure on buyers to purchase their next home right away. The deadline for the homebuyer tax credit is fast approaching. To take advantage of the tax credit, money-conscious homebuyers have until April 30 to sign a binding sales contract, and until June 30 to close the deal.

With money on the line, it’s important to anticipate and resolve problems immediately, before they escalate. As the deadline draws near, a few minor setbacks can delay the final transaction and push the tax credit out of a buyer’s reach.

“In a perfect situation, a buyer would have a 45-day window,” said Susan Funk, an agent with Keller Williams Realty in Everett. “This should be enough time to identify a house, get in contract and close, leaving enough room to solve any glitches that come up.”

Unfortunately, this length of time is no longer available for people trying to receive the homebuyer tax credit. Postponements can occur for a variety of reasons, such as unexpected paperwork requirements, disorganized buyers or poor inspection results, so buyers need to act quickly. Here are a few tips to help eliminate frustrating delays:

Work with reliable people. “Find a real estate agent you are comfortable and want to work with, and then ask for recommendations for loan officers and inspectors,” said Funk. “Everything in life is relationship driven, and all agents have people that they trust to get the job done.”

In addition to relying on referrals, it’s a good idea for buyers to speak with several lenders. Plus, it’s essential to acquire pre-approval on a loan.

Expect paperwork requests. Securing a mortgage can be a thorny process. Financial paperwork must be organized, submitted and updated with accurate and complete information.

To streamline administrative activities and expedite the transaction, be efficient and flexible. Expect to send the same documentation more than once. Keep copies of everything. Remember to turn in recent pay stubs. Also, respond to documentation requests immediately. Your organization and responsiveness will help minimize costly delays.

Speed up inspections. Once you present an offer on a house, there is a 10-day cut-off date for the initial inspection. Rather than waiting until the 10th day, schedule the inspection as quickly as possible. By doing so, you will accelerate the process at the forefront, and pave the way for timely repairs, approvals and negotiations.

Anticipate different schedules. Escrow professionals generally work eight-hour days, Monday through Friday. Respect their schedules, especially as the tax credit deadline approaches. Furthermore, keep in mind that escrow workers can’t proceed until they receive the loan documents from the lender.

Even though you can’t rush the lender or escrow associate, you can remain poised for action. The moment the loan documents come through, events will unfold very quickly. Be ready to attend a last-minute signing. Know in advance what to bring to the meeting, such as a cashier’s check.

Keep an eye out for other delays. There are other situations that may occur during the settlement process that may push back the date of your real estate closing. Establish open lines of communication with your real estate agent and lender. Tell them that you want to take advantage of the homebuyer tax credit, and ask them how to prepare for (and resolve) problems early on.

Finally, as you move forward in your springtime home shopping, you may want to steer clear of certain types of properties that are known for incurring delays. Funk suggests that deadline-driven buyers avoid short sales (which often face eleventh-hour obstacles), bargain houses (they have stringent government guidelines and may fail appraisals) and rehabilitation loans.