Stopping Blocks & How To Avoid Them

A house is so much more than just a home – it has someone’s life (or many lives!) attached to it. That’s what makes moving such a big deal… and we all know that the moving date is directly tied to the closing timeline. After all, you can’t move on with your life until you actually move – and you can’t actually move until the deal is done.

But, if you have completed a home lending transition in the last 7-10 years, you know it’s not as ‘easy’ as it used to be. Delays on all sides are more common than ever due to the loan standards in place and the due diligence behind them. So this week we are tackling the three biggest roadblocks in a real estate transaction – and how to potentially avoid them! While much of this is ultimately in the buyers hands, we are writing this from the perspective of a seller. After all, sellers have a TON of buyers to choose from – so why not choose one who can not only make you a great offer… but actually deliver it, on time?!

3 Real Estate Road Blocks & How To Avoid Them

#1: The ‘A’ Word. Unless your buyer is paying cash – the appraisal can be a huge road block in a Silicon Valley real estate transaction. With SO little inventory, SO much demand and SO many homes receiving multiple offers, the difference between the appraisal and the winning offer can be huge. If the buyers you choose have little wiggle room in the maximum loan amount they are approved for, can they come up with the cash difference between the sales prices and appraisal? If not… be prepared to allow time to renegotiate or consider having a back-up buyer solidified.

#2: Verifications. Did you know that the lender will require multiple forms of verification at different times for credit and employment? Did you know that some of the biggest delays are due to an employer not calling back, a landlord not verifying rental payments or the inability of a buyer to properly track their down payment source? Even if the result is not a deal breaker – the timing can be. It’s called close of escrow for a reason – and it is a contractual date. Test out a little responsiveness upfront with your potential buyers and their agent. What times of day are they available to chat? How quickly do they respond to requests? If they can’t communicate well with you… their chances of meeting the demands of the lender are slim. Even when they are not always the cause of the delay, you will need them to be communicative and proactive in resolving it.

#3: Disastrous Disagreements. The only thing you can be certain of in a real estate transaction is that things will change. And the ability of both parties to come to terms with that change is what stops a deal in its tracks or keeps it moving. Let’s say the property incurs water damage during a storm, the seller suddenly needs a rent back or the buyer needs to restructure their loan due to a rate change. None of these problems have to be deal breakers if both parties can agree how to manage them. Sometimes it takes patience, sometimes it means renegotiating other aspects of the contract to compensate for time/money, other times it’s just remembering we are all human. What you need in these situations is vetted experience and proactive strategy (the two things we have and we LOVE!). Your agent should be 150% confident in advising what action is best for you and your situation, while acknowledging and respecting the process that IS Bay Area real estate.

This article was inspired by '14 Factors That Can Stall the Mortgage Closing Process' on Realtor.com. We encourage you to take a read and share this blog with anyone you know who is buying or selling a home!

Thanks for reading,

Mark & Jason