Clients who had trouble obtaining financing was the most common reason for delays, respondents to the survey said, followed by appraisal issues.
While financing issues remain the top roadblock to closing, however, fewer respondents cite financing currently as the number who did when the survey began tracking such data.
“The decline may reflect the improvement in the economic environment, better credit histories from borrowers and improvement in the loan evaluation processes of mortgage originations,” the report notes.
But appraisal issues are growing more common as a closing problem. Real estate practitioners say a shortage of appraisers, valuations not in line with market conditions and “out-of-town” appraisers who are not familiar with the local market are the biggest problems they face concerning appraisals.
Indeed, 55 percent of mortgage originators recently surveyed reported some level of difficulty getting appraisals, according to a separate NAR survey.
Problems that delayed closings, 1Q 2017
- 30%: Issues related to financing
- 21%: Appraisal issues
- 15%: Home inspection/environmental issues
- 13%: Title/deed issues
- 8%: Contingencies stated in the contract
- 6%: Issues specific to buying/selling distressed property
- 1%: Property insurance issues
- 0%: Buyer lost a job
- 21%: Some other issue
Source: Realtors® Confidence Index
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Twenty-three percent of real estate professionals say they faced closing delays for a transaction in March, and 7 percent say the sale contract was terminated altogether, according to the Realtors® Confidence Index, which is based on responses from more than 2,500 Realtors® nationwide.