Selling a home can be an exciting yet stressful process, and closing day is the final step in sealing the deal. However, not all closings go smoothly. As a seller, being aware of potential red flags can help you avoid unnecessary delays, disputes, or even a failed sale. Here are some critical warning signs to watch for on closing day:

1. Last-Minute Buyer Demands

Buyers may request last-minute repairs, price reductions, or additional concessions before signing the final paperwork. This usually comes about because of an issue during the final walkthrough. While some minor requests are common, significant or unexpected demands can be a red flag that the buyer is getting cold feet or trying to renegotiate the deal unfairly.

How to Handle It: Make sure that you leave the property in “broom clean” condition and that there is no damage to the property that wasn’t there when the buyer submitted their offer. If the property is vacant, it can be helpful for you or your agent to visit the property before the final walkthrough to make sure nothing happened since you moved out (leaks can be more common than you think). Then, try to address any issues prior to the walkthrough. If the buyer’s request is reasonable and you’re willing to accommodate, ensure that all changes are documented in an addendum to the contract. However, if the buyer is pushing for excessive concessions, consult with your real estate attorney before agreeing to any modifications.

2. Issues with the Buyer’s Financing

One of the biggest closing day deal-breakers occurs when a buyer’s financing falls through. This can happen due to a sudden change in their financial situation, an issue with their lender, or an expired mortgage commitment.

How to Handle It: Before closing, ensure that the buyer has received final loan approval and that all financing contingencies have been met. If financing issues arise at the last minute, you may have the right to keep the earnest money deposit or relist the property.

3. Title Problems

A last-minute title issue—such as undisclosed liens, boundary disputes, or errors in public records—can delay or derail the closing process.

How to Handle It: Work with a reputable title company and real estate attorney to conduct a thorough title search early in the process. If any issues arise, address them as soon as possible to prevent closing delays.

4. Closing Document Errors

Mistakes in closing documents, such as incorrect names, misspelled addresses, or wrong dollar amounts, can slow down the process and lead to costly delays.

How to Handle It: Review all documents carefully before signing. Your attorney should also be reviewing the settlement statement prior to closing to ensure everything is accurate. If you spot any errors, notify the closing agent or your attorney immediately so they can be corrected before finalizing the sale.

5. Buyer No-Show or Delays

In rare cases, buyers may delay closing or fail to show up altogether due to scheduling conflicts, unresolved concerns, or cold feet.

How to Handle It: If the buyer is running late, confirm their expected arrival. If they are unwilling to proceed, you may have legal recourse depending on the terms of your contract, including retaining their earnest money or seeking damages.

6. Last-Minute Wire Fraud Scams

Real estate wire fraud is a growing concern, with scammers attempting to divert closing funds to fraudulent accounts.

How to Handle It: Always verbally verify wiring instructions directly with the title company before transferring funds. If you are receiving your proceeds from the sale via wire payment, a reputable title company will call you to verbally verify the wiring instructions with you prior to sending the wire. Be wary of sudden changes in instructions via email, as these could be phishing attempts. If anything feels “off” it’s always best to err on the side of caution and reach out to your attorney.

Final Thoughts

Being prepared for potential closing day red flags can help you navigate the process of selling your home with confidence. By staying proactive, working with experienced professionals, and knowing your rights, you can protect yourself from unnecessary stress and setbacks. Your real estate attorney should be working with you closely if you encounter any significant issues to determine the best course of action.

If you’re preparing to sell your home, working with an experience attorney that focuses in real estate transactions is crucial to a smooth closing process.

Thinking about selling your property? Schedule a 15 minute introductory call here.

This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.