Beware of these Home-Buying or Selling Hiccups

If you’ve ever bought or sold a home, you know that—despite the best efforts of both the buyers and sellers, and Realtors—sometimes, the process just isn’t as smooth as everyone would like.

Frequently, the process is slowed down by circumstances that are not in your control or events of which you were unaware.

In our market, we sell a lot of homes that were inherited by children whose parents have passed away—and sometimes, those homes come with surprises, such as:

• Repayment of reverse mortgages, which—depending on the length of time they have been in effect—may leave less profit than the heirs had been counting on

• Past-due taxes. These can stop a deal in its tracks, so make sure taxes are current.

• Past-due HOA fees. The title company will verify this with the HOA. As well, sometimes strange issues arise with HOAs. We recently had a deal in which the seller owned two adjoining lots and had an agreement with the HOA to pay for the installation of water services upon the closing of a lot he was trying to sell—which we didn’t find out until after closing. It didn’t stop the closing but should have been taken care of before settlement.

• Liens, penalties, and other requirements such as services rendered but unpaid; second mortgages; home equity loans or lines of credit; prepayment penalties; and certain loans (like THDA) that require that the owner occupy a home for a minimum time before selling

• Repayments to TennCare for long-term care benefits your parents may have received.

Consequently, it would be a really good idea for parents and children to have a frank discussion about issues surrounding the parents’ home ownership when you tackle those difficult talks that no one likes to have. And if it is your property that you are selling, make sure all past-due items or liens are cleared before listing.

As for buyers, there are also several issues that can delay—or even cancel—your home purchase, including:

• Encroachments, such as septic lines, driveways, decorative fences, and shrubbery. These are a common problem. Once, I sold a home in which the septic lines for the adjacent property were on the property belonging to the home I sold. That delayed the closing for three weeks, as attorneys had to become involved. In more than one occurrence, the survey on a lot I was selling found a neighbor’s driveway was built 9” into the lot my buyer was purchasing; and another survey on a property I sold discovered an 18” encroachment from a culvert wall into the neighbor’s property.

• Buying anything on credit after you begin the loan process. This is a huge no-no and can derail a closing at the last minute.

• Changing jobs during the loan process can—and often does—terminate your loan application.

• Making big deposits into your bank accounts. You will have to answer some questions from your lender as to the source of these funds.

All parties to the transaction want the process to flow smoothly, so make sure you are aware of—and take care of—any of these issues that may delay or derail your home sale or purchase.