After months of hunting and preparation, you're finally ready to close on a house. The last thing you want is to have a problem pop up and delay the closing. Watch out for these common closing-day glitches, and learn how to avoid them. 

1. Walk-through shockers
When you're buying a home, one of the last steps of the process is to conduct a final walk-through of the property. These walk-throughs are usually scheduled the morning of or the day before closing -- after the seller's furniture and artwork has been removed -- to verify that the new home is clean and in move-in condition. However, sometimes buyers receive surprises when they see what's behind the decor: faded floors, holes in walls or dirty rooms that can make a buyer balk at going through with the closing.

7 closing-day glitches
 

"I had an experience where on a walk-through we discovered that the flooring the owner advertised as ceramic tile really wasn't. It was a ceramic-looking design that was actually laminate," The buyer complained and the closing was delayed until the seller offered the buyer a credit to pay for installing real ceramic tile. "In general, a credit can go a long way to fixing any problem. The buyer and seller just have to negotiate how much money is needed for the repair,"

2. Not enough cash to seal the deal
"A buyer, particularly a first-time buyer, could discover at the last minute that they don't have enough money to pay closing costs," says Alan Weinberger, a professor of law at Saint Louis University Law School in Missouri. "Even with a modest house those costs can run into the thousands of dollars for title insurance, recording fees, etc."

"We try to put together the final settlement statement within 24 hours of closing," says Leah McCann, a loan officer with First Horizon Home Loans in Fort Myers, Fla. Up to that point, the buyer has only an estimate of the fees they need to pay at closing. "Because of prorations and title fees, the final amount may be a few hundred dollars more than what's noted in the good-faith estimate, but the buyer still has to provide those funds in order to close."

"At that point, all eyes are on the lender" to see if they will lower their fees enough to let the buyer go through with the closing, says Weinberger.

McCann concedes that sometimes lenders have to be willing to do just that. "Nobody wants to lose a deal over a couple hundred dollars."

Even if the funds are available, they may not be in the right form.

"If a seller needs the funds from the purchase of one house in order to buy another, they may be expecting a wire transfer of the purchase price into their account. If the lender provides only a check, then they have to wait for it to be deposited," says Alan Gottlieb, vice president and special counsel for First American Title Insurance, in Philadelphia. "If they need that money for a subsequent funding, then they should make amends for a wire transfer."

Even if a wire transfer isn't necessary, funds need to be guaranteed. "We often see people who don't bring certified or bank checks to a closing," says Gottlieb, and that could cause a delay.

3. The house is still occupied
"Another pretty common example of a closing-day glitch is that the property simply isn't vacant," This happen to me.  It could be that the property was previously a rental, and the tenant is taking too long to move out. The seller might not even be responsible for forcing the tenant out after closing.

"Depending upon the law in the state, it may be the seller's legal obligation to deliver only the right to possession (of the property) on the closing date, as opposed to actual physical possession," says Weinberger. "What a shock that could be to the buyer, who would then be responsible for getting the tenant out of the house!"

If you're considering buying a property that currently has a tenant, my advice is to ask to see the lease. If there's a substantial security deposit that the tenant would forfeit by not moving out when the lease ends -- which would presumably be before the closing date -- the seller is less likely to have a holdover-tenant problem.

"You can also provide in the contract of sale that it's the seller's obligation to deliver actual, physical possession of the property on the closing date, not just the legal right to possess."

It may be the seller, not a tenant, who's still occupying the house at closing, particularly if the seller's new home isn't ready. If the buyers don't need to move in right away, both parties could negotiate an agreement under which they close on the property and the seller rents from the new owners for a short while.

4. Unfinished repair work
Sometimes a house could be undergoing repairs that are specified in the contract but are incomplete on closing day. "It's not unusual that sellers underestimate the length of the time it takes to complete a repair," says Gottlieb. "There may need to be a discussion about delaying the closing date to enable the seller to finish any outstanding work."

If the seller waits until the last minute to address the issue, however, the new homeowner could be in a bind.

"Buyers may have their stuff already on the moving truck waiting outside of the house to move in," says Weinberger. "If the buyer's financing commitment expires on closing day, the buyer doesn't really have a whole lot of options at that point other than to close."

In that situation, the seller could put the money for the repairs into an escrow account to be paid after the work is complete.

"The escrow funds could be held by one of the brokers, the title company that's conducting the closing or anybody other than the seller," says Gottlieb. The seller may also choose to offer the buyer a credit in the amount of the repair.

5. New liens on the property
When an offer on a house is accepted, a title search usually occurs within the first couple of weeks to make sure a mechanic's lien isn't on the property -- that is, a claim for unpaid work that was done on the property. Just because the initial title search comes up clean does not mean a lien couldn't be placed on the property right before closing.

When remodeling work is done on a house to get it ready for sale, the seller still has to pay the contractor. If the roofer or carpenter gets stiffed, they could put a mechanic's lien on the house -- and they don't have to do it right away. "Under a state's mechanic's lien statute, a contractor who completes the work has a period of time after completion to file a lien if they haven't been paid. The time frame varies by state and also by trade," says Weinberger. So even though the title could have been searched well before closing, a lien could be placed on the home right before closing -- or even after.

According to Weinberger, the way to prevent this problem is to ask the seller to verify that any repair projects have been paid. "There needs to be an affidavit signed by the seller at closing in which the seller swears that there was no work performed prior to closing for which the seller didn't pay."

6. Buyer's remorse
A buyer who is having second thoughts about their impending purchase may be tempted to use one of the above points to kill the deal, even if it means walking away from the earnest money paid to make an offer on the house. However, doing so could mean big penalties for the buyer. 

"There's an implied obligation of good faith and fair dealing in all contracts. If the buyer is using the walk-through, for example, as an escape hatch to walk away from the contract, they are playing with fire," says Weinberger. The seller could sue the buyer for breach of contract. "Courts see that for what it is and they're unsympathetic to buyers."

7. Closing confusion
Even if all parties fully intend to close on the contract, mistakes can still happen that could cause a delay. "My first year as a real estate agent, a closing was postponed because the attorney neglected to get a 'plat of survey' completed," says Rhodes. A plat of survey is a drawing of the property that shows all legal boundaries. "The closing was originally on a Friday, but it had to be rescheduled for the following Monday so the attorney could bring in the document."

A routine examination can also cause last-minute problems. "When we were selling our house a few years ago, one of the last things that happened before closing was the gas company came out and conducted an inspection," says Weinberger. "The gas company determined that our stove wasn't connected properly, and we were surprised to see them unhook it then and there. Fortunately, the new owners were preparing to totally remodel the kitchen and replace all appliances, so they didn't need the gas connection. But for those last few days when we were in the house, we had to live on microwave food."

Though closing-day glitches do happen, they can still be overcome. Don't panic, says Weinberger. "Most closings go through smoothly."