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Could undisclosed defects cancel a real estate closing?

On Behalf of | Dec 28, 2022 | Uncategorized

Maybe you are someone who listed a piece of Tennessee real estate for sale. You accepted an offer and are eager to complete the transaction and reduce your maintenance responsibilities. On the other hand, maybe you are a home buyer, and you have just found a place that would be perfect for your family. You make an offer based on the apparent condition of the property and then start planning your move after the seller accepts it.

There will be many steps between negotiating the offer and signing the final paperwork. Inspections and a final walk-through are both important in that process, and they could cause issues with the closing. What happens if an unexpected defect turns up after the seller accepts the offer?

When an inspector finds an issue

Both mortgage lenders and individual buyers often insist on professional property inspections to minimize the possibility of overpaying for a property with significant latent issues. In theory, the seller should provide written disclosure of all major issues with the property, and any other issues should be visible when the buyer tours the property with their agent.

Unfortunately, sometimes issues are harder to spot, and only a professional inspector can warn the buyer about them. The more expensive the issue the inspector finds is, the more likely it will be to delay or cancel the closing. The price for the property may need to change, or the seller may need to agree to help pay for the repairs for the closing to proceed as scheduled.

When there is damage on the final walkthrough

It is possible for a property to pass inspection, only for the seller or the moving company that they hired to cause significant damage while leaving. Broken windows, stained carpet and holes in the drywall are among the issues that might turn up during the final walk-through. These might require some last-minute negotiations between the buyer and the seller and may result in either sell or concessions or an insurance claim brought against the moving company.

Identifying and preparing for issues that could derail a real estate closing will make it most likely for you to complete the sale without issue.