Buyers 3 Biggest Hurdles On The Way To The Closing Table

Dated: 03/31/2015

Views: 964

Once your offer has been approved on your dream house the real work begins.  If you have hired a professional real estate agent they will take care of much of the “behind of scenes” details through a reputable title company. The 3 hurdles a typical buyer will come across during the closing process are Inspection, Appraisal, and Loan Objection.

INSPECTION

While the home may be perfect at first glance, an inspection by a licensed and bonded inspector will give a buyer peace of mind that the house is all that it appears to be.  The inspector will go over the home from roof to foundation looking for anything that may be an issue for the buyer in the future. Typical inspections include things like the age and condition of the roof, sewer lines and plumbing, furnace, air conditioning, structural and foundation, and any building code violations.  A thorough report provided to a buyer that will include any issues detected.  It is up to a buyer to decide if they can live with the report or they can make an Inspection Objection.  An Inspection Objection is just what it sounds like.  It points out issues that were discovered during the inspection to the seller.  At this point it becomes a negotiation between buyer and seller as to which of the issues will be fixed or a price reduction is in order.  The outcome often comes down to whether it is a buyer or seller’s market.  No matter what market it is, an inspection is an important first hurdle to making your dream home doesn’t become a nightmare.

APPRAISAL

While an inspection is peace of mind for the buyer, an appraisal is piece of mind for the lender and they are two very separate assessments of the home.  An appraiser will be assigned by the lender to do an independent report on the home.  The main objective is to determine if the home’s value is in line with the price.  The appraiser will use factors such as how the house compares to comparable homes that have recently sold or are currently for sale.  The key to getting the loan or not will depend on the appraisers opinion if the price is in line with the market.

LOAN OBJECTION

After weeks of working towards closing, the loan objection is the final and perhaps biggest hurdle to overcome. If the appraiser feels the price of the home is above market value the lender will not grant the loan.  It will be up to both buyer and seller to decide if they are willing to agree on a price that matches the market.  Again, the outcome depends heavily on market conditions.  In a seller’s market it often lies on the buyer to decide if they are willing to come to the closing with more money to offset the difference between purchase price and market price.  In a buyer’s market it will be up to the seller if they are willing to lower the price. 

Congratulations you have cleared all three hurdles on the way to the closing table and your dream home is now yours!

Jeff McGahey

As a Colorado native, real estate broker since 2006, and real estate investor for over 15 years I have the expertise and knowledge to help guide you and your family through the most important transact....

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