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Things that can delay real estate closings

On Behalf of | Aug 11, 2023 | Residential Real Estate

Completing a sale for a piece of real estate in Georgia requires proving that the property title holder has a clear and unhindered right to transfer the title to the buyer. You accomplish this by having a title company research the public records concerning the historic ownership of the property. Multiple issues could muddy the determination of who rightfully controls the property or has a right to a portion of its value. These are called title defects. They prevent the issuance of title insurance, which in turn makes closing the property sale impossible in most cases. Open permits from prior or ongoing work can also cause a lender or buyer to stop the closing.

Sources of title defects

A title company could discover errors in public records that introduce concerns about the owners or legal property description. Clerical errors or typos will require correction before closing.

The emergence of missing heirs of a previous owner who died complicates titles as well. The heirs may assert their right to the property and make it impossible for the current title holder to transfer the residential real estate. Frauds and forgeries of previous property records also create a mess that must be unraveled before a sale can close.

Liens for unpaid debts represent a common problem that undermines a sale. Any loans secured by the property record a lien that must be paid off when the property transfers to another party. Unpaid contractors also have the right to put a lien on the property.

Open permits

Many types of work, such as electrical or HVAC, require a permit from local authorities. If the work is never completed or does not pass inspection, then the permit remains unresolved. A buyer or lender many not want anything to do with this and therefore abandon the sale.