A lot can go wrong during an escrow period in real estate. Here are some possible escrow and title problems that could prevent the buyer from closing a deal.
Top 5 Escrow and Title Problems that Can End the Deal
1. Incomplete Home Inspection
This is a common problem for sellers who have lived in the house for years. Often times they neglect the need for a home inspection and list the property for sale. As a result, during a proper home inspection, problems like mold, damp walls, etc. are found. And when these problems show up, there is a high probability that the buyer will refuse to purchase the house.
To avoid this from happening, as a seller, you must do a proper house inspection before listing the property. Besides, if you find any faults in your house, you should repair them as quickly as possible. Again, from the buyers’ perspective, you should do your own home inspection as well before the escrow period and be prepared for every situation.
2. Hazard Disclosure
During the escrow period, buyers get the opportunity to learn about different disclosures of the house, including hazard-related disclosure.
These disclosures can turn off a buyer. For example, if the property is near a commercial airport or there is an avalanche zone near the property, a buyer won’t feel confident in buying the property and move away from the deal. That’s why as a seller, it’s better to disclose everything before reaching the escrow period.
3. Dispute over assets
Due to misunderstanding, there can be disputes between the buyer and the seller about which assets gets transferred and which do not. For example, some properties include everything while selling the property, some don’t. As a seller, if you don’t tell the buyer what is included and what isn’t with the property, it can create a dispute and end the deal.
Again, as a property buyer, you must tell the seller about which things you want. For example, if you want the furniture, washer, refrigerator, etc., with the property, tell the seller about that and include them in the property agreement.
4. Error in Property Records
Sometimes, property owners make clerical mistakes such as writing the wrong address, property owner’s name, address, square footage, etc. But these errors can cause serious title problems and delay the deal.
No matter whether you’re a buyer or seller, you should buy title insurance to keep you safe from this problem.
5. Missing Heir & Will
When a property owner dies, his/ her property gets transferred to their will or heir. However, sometimes their heir will go missing after the property owner’s death. If the will goes missing, the property is sold by the state through probate. But if the will or heir somehow return and file a claim, the new property buyer will be in big trouble. To keep you safe from this situation, you should buy title insurance.
