BUYING A HOUSE: How to Avoid Settlement Delays.
In Maryland, the settlement is a specific date agreed to in the Contract of Sale for the property. It is not fluid/flexible/changeable unless both buyer and seller agree to a date change in writing. There is no standard amount of time between Contract to Close for residential properties in Maryland, but they generally can be anywhere from 25-50 +/- days.
But problems happen.
There are things you can do as a buyer to avoid common problems from happening to you:
Give your lender a truthful and accurate picture of your income, down payment, and liabilities. The lender will need it all documented anyway eventually. For pre-approval letters, sometimes the lender gets the info verbally but then for actual loan application and approval you don’t get far because you weren’t accurate. If your lender discovers new information that is detrimental to your application, the closing will be postponed, or worse: you may end up with a higher interest rate or have your application denied completely.
Get your documentation ready BEFORE you start looking at houses! You will need two years’ worth of full tax returns, two years’ of W2s, and two months of bank statements; the lender may require more documents to verify deposits/withdrawals/ and items such as child support.
DO NOT MAKE ANY LARGE PURCHASES or MAKE ANY LARGE CHANGES to YOUR FINANCIAL PICTURE! This will change your credit score and assets/liabilities ratios. This also includes not switching jobs - even if it is for more money!! Your employment gets verified by the lender the day before or even the day of closing!
Schedule your home inspections in a timely manner. Make sure you have asked for all the appropriate ones whether home, radon, termite, chimney, well/septic, water quality, and pool/ out buildings. Verify that all repairs negotiated have been made prior to settlement date.
Get knowledgeable Buyer Agent representation who will keep you on track with all your deadlines and who will keep an eye on lender and title company to make sure you settle on time.
There are repercussions if a buyer does not close on time. You may have to pay:
- extra for a new interest rate lock
- more in daily interest on your loan at closing
- for any changes to moving costs
- more rent / another mortgage payment on your current home
- Seller may ask for compensation for delay
A worst case scenario is seller will not agree to an extension because your financing approval is not complete and re-lists the property looking for another buyer.
Looking for more info? Call Cleo! 443-604-7721
My goal is to be the real estate professional of choice for family, friends, neighbors and all referrals!
Cleopatra Pappas, Esq., SFR
2015, 2017 Keller Williams Silver Medal Agent
2016, 2014 & 2013 Keller Williams Bronze Medal Agent
REALTOR(R), Co-Owner, General Counsel
Keller Williams(R) American Premier Realty
2214 Old Emmorton Road, Suite 200
Bel Air, MD 21015
443-512-0090 (office) 443-604-7721 (cell)*