Reasons Why Real Estate Transactions Don't Close

The purchase or sale of real property is an exciting time, however, procuring a signed real estate contract is only half the battle. Once an offer is accepted and a contract is signed, a number of issues may arise that may hinder the ability to close. This time frame between the signed contract and the actual closing is known as the executory period. For this reason, a properly drafted purchase and sale contract along with appropriate representation for all parties involved by experienced real estate attorneys is essential to protect the seller and the buyer during this transaction.

Obstacles to Closing

The most common issues that arise during the executor period that can cause a real estate closing to fail include:

Contingencies are not met – it is not uncommon for the closing of the contract to be dependent upon the occurrence of events, known as contingencies. If the contingency does not occur within the stated time frame, the transaction can be canceled. The closing may depend upon the buyer obtaining financing, the property appraising for at least the contracted purchase price, the sale of buyer’s property, and a satisfactory inspection report.

Title is clouded – the transfer of interest in real property requires marketable title, meaning the deed to the property must be free and clear from valid claims by outside parties. If title is not clear, the closing cannot occur.

Discoveries found during final walkthrough – it is possible to find the property for purchase in a different condition than when it was first seen and, as such, final walkthroughs are strongly suggested.

Erroneous documentation – simple mistakes in paperwork such as typos including misspelled names, transposed numbers in the property address, incorrect loan or interest amounts and missing documents, are all ways that will halt a closing.

Delay in loan documents – sometimes, due to no fault of their own, the parties arrive at the closing at the scheduled time and the loan documents have not arrived. At the least, the closing will be rescheduled unless a “time is of the essence” clause was included in the contract, which may result in cancellation of the sale.

Chicago Real Estate Attorneys Available

The purchase or sale of a home can be one of the largest transactions during one’s lifetime. Contact an Illinois real estate attorney today if you are considering purchasing or selling a property. Prudent investment in legal fees upfront will save you thousands of dollars in the long run by avoiding legal consequences from mistakes or omissions during the sale. The Law Offices of Gilbert C. Schumm has over three decades of experience and serves the real estate needs of residents in the communities of Mt. Prospect, Hanover Park, Arlington Heights, Rolling Meadows and Roselle, among others.