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The risks associated with real estate closings

On Behalf of | Apr 4, 2024 | Residential Real Estate

Closing the deal on your dream home can be an exciting milestone, but it can also be a minefield of potential problems. Understanding the risks is crucial to navigating the process smoothly and protecting your financial interests as a buyer.

First, you may run into unexpected issues, such as a clouded title, which means there is a dispute or claim regarding the ownership of the property. This can arise due to unpaid taxes, undisclosed heirs or other legal complications. It can delay the closing process, and the deal may fall through if you do not wish to proceed. 

You may also discover undisclosed property defects like mold, pests or structural defects. They can be costly to repair, and you may want to renegotiate the terms or cancel the deal. Here are other inherent risks of the financial stage of a real estate deal

Financial risks

You may face financing issues at the last minute, throwing your plans in disarray. Changes in your financial situation or loan approval issues are some instances where the deal may fall through due to lack of financing.

Unnecessary delays

Delays can occur due to various reasons, such as issues with the title search, financing or completing necessary paperwork. It can be frustrating and may result in additional costs or even the loss of the property.

Mitigate the risks

The good news is that you can take proactive measures to safeguard your interests during a real estate closing. You do not have to lose out if the deal falls through. For instance, you can include contingency clauses in the home purchase contract to protect you from legal and financial liability.

Seeking legal assistance when buying a property can save you a lot of trouble. It can help mitigate these and other risks toward a smooth transaction.