The closing on my home has been delayed for months. Here’s why

I signed a contract to purchase a house in June 2023. I was ready to move in and was scheduled to close in September because the seller asked for a later closing date.

Despite the fact that we have our mortgage all in place and ready to go, it’s mid-December and we haven’t closed on the property yet. This is why I have had to sign several extensions and am still waiting to make the house my own.

This issue delayed the sale of my home and may delay the sale of your home as well.

The reason why I haven’t become the owner of a new house yet is simple. There are two liens on the property. The seller purchased the property due to a homeowners’ association foreclosure. When they bought it it had a first mortgage and a second mortgage, both of which were very delinquent.

The mortgage holder had a legal interest in the remaining real estate in the home. Any liens against the property mean that the seller has outstanding claims that must be addressed. They did not own the house outright. They couldn’t transfer the house and gave me clean title (Basically, it’s a fancy way of expressing outright ownership of real estate).

If the seller can’t deliver a clean title, mortgage lenders won’t loan you money on the home, and they probably didn’t want to buy a home with an outstanding claim attached anyway. They would have become my responsibility. So I had to wait until the seller worked out a deal with these two mortgage lenders to pay off the outstanding balance so the lien could be released from the house and the house could be transferred to me.

The seller wasn’t clear on how long this would take and kept saying they were working on a deal with their bank and it would happen at any time. Of course this turns out ~ no It’s true. This is why I am still waiting months later to complete my home purchase.

Be careful about purchasing property with unpaid claims

In our particular situation, we were willing to wait because this is a very special home. We were able to do that because we had more places to live and we found a really good mortgage lender. It was the best place I’ve ever worked with. The person helped us keep the file open and active so we wouldn’t lose our loan. We waited and waited until the door closed.

This is not the case for most home buyers. If you can’t wait a few months for the problem to be resolved, you should be very careful about purchasing a home with a lien attached (other than a mortgage that the seller currently takes out and will pay off at closing). If there are creditor claims against the property, these may take time to resolve and the seller may not always be able to do so according to the expected timeline.

It is also important to know that you may be required to purchase title insurance when purchasing a home. Title insurance is issued after the title company searches for outstanding claims. Once all is clear, we provide insurance so that if something unexpected happens, you won’t lose any money due to unexpected claims on your property. Your lender will require title insurance, and you should insist on it even in the case of a cash sale to protect you against surprise claims.

Since you’ll need title insurance anyway, it’s a good idea to perform a title search early in the process or check court records for the county where the property is located before you decide to buy a home. This can help you deal with the aggravation and stress I’ve been through, and can help you make sure you make an offer on the house that closes on time.