Why Does It Take So Long to Close on a New Home?

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By Gary M. Landau, Esq.

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Why Does It Take So Long to Close on New Home? | Coral Springs, FL | Call (954) 979-6566

You have finally reached a deal to buy or sell your home, and you’re eager to get to closing. Then your attorney/closing agent tells you that will happen in approximately one month.

Why you wonder, does it take so long?

Banks Are the Biggest Holdups

When a buyer takes a mortgage, the closing timetable is set by the lender, which is often thirty days. If the buyer is participating in a special first-time homebuyer mortgage or is getting a loan from the Veterans Administration housing program, the process takes even longer.

To prevent extra delays beyond this timetable, it is crucial that buyers apply for their mortgage as soon as the contract is signed. They should also respond right away to subsequent lender requests for documentation.

Even better is to anticipate these requests before they happen, by gathering up the information you know the bank will need, such as recent paycheck stubs or W2s, bank statements, tax returns, and divorce or bankruptcy decrees if applicable. Be sure to keep copies handy when you submit the documents; inexperienced loan officers misplacing your information is a common cause of extra delays.

Lien Letters and HOA/Condo Approval Also Take Time

As soon as I am sent a contract for a client’s real estate closing, my office looks for open liens on the property, such as tax liens or those by unpaid contractors, in order to close them as soon as possible to remain in the contract’s timetable.

Depending on the location of the property, we also request a letter from the city stating the property is clear of its liens, for such things as open permits, water bills, code enforcement violations, and the like. Getting an all-clear lien letter from the city is important way buyers and sellers are protected from later surprises; unfortunately, it is a step some title companies chose to skimp on.

If the sale requires the approval of a homeowners association (HOA) or condo board, this also takes time, as some communities review new owner information only on a set schedule. Again, buyers can prevent additional delays by submitting the required information to the property’s management company quickly.

Major Problems That Cause Long Delays

Sometimes, a substantial problem turns up during the escrow process that can cause significant delays to a deal. My office works to fix these problems as quickly as possible.

When we do a title search, for instance, we sometimes discover a “cloud on the title of the property,” which is lawyer-speak for a defect in the chain of ownership of the home. This might mean that the prior closing agent accidentally included the wrong legal description on the deed, or perhaps a deceased owner’s estate wasn’t properly probated.

To clear the title, we might need to find a prior owner and have them re-sign the deed, or we might have to go to court to ask a judge to approve a legal fix.

Another cause of significant closing delays is an appraisal that comes in below the sales price. Banks won’t lend money for a home that doesn’t appraise at the contracted price. This low appraisal typically causes negotiations between the buyer and seller to re-open, so they can reach a new deal the lender will approve.

And if the home’s inspection (which should be ordered as soon as the contract is signed, one of the most important steps a buyer takes) reveals repairs that must be done according to the contract’s terms, this can also push back the schedule.

Smaller Problems That May Tank the Timetable

Buyers and sellers can do their part to keep the process moving during the escrow period, and to avoid the unnecessary delays I see too often in my practice.

These include:

  • The buyer should quickly clear any debt that must be paid as a condition of your lender.
  • The buyer must ensure that the full amount of money that must be brought to the closing is properly wired from your bank beforehand. (No closing agent will take a personal check, and many no longer take bank cashier’s checks due to increased fraud.)
  • Homeowners’ insurance should be arranged well before the purchase is complete.
  • And, for both buyers and sellers, if they plan to change their marital status before the closing, they must notify their attorney/closing agent right away, since marital status is listed in the documents and in the deed.

Buyers and sellers who are careful to do every required step quickly will find their closing happens within the contract’s timeframe. But with all the actions that must be taken by the parties, by the bank, and by the attorney/closing agent, it is clear that a month is a reasonable period to wait.

Real Estate Attorney Coral Springs

Having the Law Office of Gary M. Landau by your side during each step in probate, will/trust, or real estate matter helps ensure that the process goes as smoothly as possible. The Law Office of Gary Landau is located in Coral Springs, Florida, and is rated 10 out of 10 by the legal website AVVO. For more information, call 954-979-6566 or email us for a free consultation.

Law Office of Gary M. Landau P.A.
7401 Wiles Road, Suite 204
Coral Springs, FL 33067
954-979-6566

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Frequently Asked Questions

A will is the simplest way to ensure that your funds, property and personal things will be distributed after your death the way you want them to. Even if you have very few assets, you will benefit from having a will. About half of all Americans die without a will (known in legal terminology as dying intestate). Without a will to indicate your wishes, the court steps in and distributes your property according to state law. A will ensures that your assets will be given to family members or other beneficiaries you designate.

 

Having a will is doubly important if you have young children. One section of the will allows you to designate a guardian for them in the event of your death. Without a will, the court will appoint a guardian for your children, who may not be the person you desire.

Many Florida residents have out-of-state wills, drawn up while they were still living among the hills of North Carolina or the hubbub of New York. If the will was valid according to your old state’s laws at the time you made it, it is still legal in Florida. However, if you are a Florida resident, you may benefit greatly by having a new will drawn up in Florida, because it will likely be more easily admitted to probate.

 

It is important to know that each state has its own requirements for what makes a will a legally binding document. For example, Florida doesn’t recognize handwritten wills that haven’t been witnessed (known as “holographic wills”), or oral wills not put into writing, even if other states okay them. There’s also the matter of Florida estate law. In this state, for example, your surviving spouse is entitled to 30 percent of your net probate estate, regardless of what you say in your will. The spouse may also have a “Homestead” interest in property you share here, even if you want your house to go to someone else. In fact, all real property owned in Florida will be subject to this state’s laws, even if you’re a snowbird maintaining a residence in the state where your will was drawn up. Other peculiarities also exist, which is why a Florida will could make things much easier for your heirs.

 

If you would like to have me review your current out-of-state will, I am happy to do so without charge. If it turns out to be in accordance with Florida state laws and procedures, you can continue to rely on it. If not, however, your heirs would rather you discover that now.

It is a good idea to re-read your will every few years to be sure it reflects up-to-date realities (you may not want to leave your heirloom to a niece you are no longer speaking to, nor have someone be named your child’s guardian if they have taken seriously ill since you drafted your will). It is especially important to reexamine your will if:

 

  • You have gotten married since it was last drafted;
  • You have made bequests to people who have fallen out of your favor or are no longer living (I recently updated the will of a man who had left everything to his first wife, who was long deceased), or you have not included people who are now dear to you;
  • You would like to change the person named as the personal representative of the estate. (Note: Florida law does not allow a nonresident of the state to serve in this position, unless it is an immediate family member or certain other relatives);
  • You have acquired pricey or sentimental items that are not accounted for in your will. Do note, though, that Florida law allows you to attach a separate personal property memorandum to your will, detailing who will get which specific items. This list can be changed whenever you want.

Perhaps I should answer this question with where not to store it: in a bank’s safety deposit box. Although it may seem logical to put this with your other important papers, it is often difficult for your heirs to gain access to the box once you die, since the box is sealed then and must be opened in the presence of a bank employee.

 

One good option is to leave your original will with the attorney who drafted it, making copies for your personal representative and other important relatives and letting them know who has the original. For my clients who prefer that I store their original will, I keep it in a fireproof will vault in my office, or in the vault in my bank.

 

As an alternative, you could store the will in a fireproof box or vault in your own home.

 

Wherever you store it, be sure to let your personal representative and other close relatives know where you have put it!

Probate is when the court oversees your assets and liabilities after your death. During probate, the court makes sure that your will is valid and acceptable; that all debts, bills, creditor’s claims, and taxes are paid from your estate’s assets; and that your remaining assets are distributed to your beneficiaries according to your will (or, if no will exists, by Florida law).

 

Probate usually does take longer than most beneficiaries would like. But in order to ensure that everyone with a right to a claim is included in the process, the court requires several steps. If the size and complexity of your estate are minimal, however, the entire process of probate can take as little as a few months. Larger estates that are subject to IRS estate taxes or those involving litigation on the part of creditors or heirs generally take longer, often one or more years.

 

To speed the process along for simple and small estates, the courts allow a shortened form of probate, known as “summary administration,” which requires much less paperwork and time.

A personal representative (PR) is a friend or relative, or an attorney or bank, who is put in charge of the estate until all matters regarding the probate are resolved. (In other states, this person is sometimes called an executor or administrator.) The job of the PR includes identifying all assets, searching for creditors and paying valid claims, filing required estate tax returns if the estate is large enough (the figure escalates over time, according to Congressional laws), coordinating with the probate court and attorneys, and overseeing the distribution of assets–all done under the guidance and assistance of a qualified attorney.

 

Serving as a PR is an important role, and such a person should be selected with care as to who is most willing and best able to serve in this position. By Florida law, your personal representative must be over 18 years of age, and be a blood relative, your spouse, the parent or child of your spouse, or a Florida resident.

Generally, no. If you co-own all property via such legal structures as “tenancy by the entirety” or by “joint tenancy with right of survivorship” the property immediately passed to you upon your spouse’s death. Proof of death is usually all that is needed to pass such jointly owned title for cars, stocks, and other personal property to the surviving spouse.

 

But if even one asset was held solely in the deceased person’s name, or any property is owned in the form of a “tenancy in common,” that estate will be required to go through probate. If the assets are limited, the shorter, simpler form of probate is generally all that is required.
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