What happens when a hurricane delays a closing?
As we all know many people across Texas and Florida have recently been affected by hurricanes in many different ways. Fortunately for Broward County things have been progressing and by now we are back to the norm for the most part since our visit from Irma. However, when it comes to real estate it does beg the question of what typically happens if you were amidst a real estate transaction. If you are ever in the process of purchasing a home when a hurricane strikes, what happens next? Here is a closer look at how things can progress.
When a storm is approaching it may be a little extra challenging to secure a homeowner’s insurance policy. Be prepared for this as it may cause for a delay in your previously agreed upon closing date.
Most real estate contracts will include a clause that speaks to the potential issue of a natural disaster like a hurricane. This may be referred to as “force majeure.” In most cases this pushes closings out until about a week after things return back to normal. In the event that a closing is delayed much longer and past 30 days, then buyer or seller would be able to cancel their interest in the contract. This is in many cases, however be sure to carefully read the terms in your particular contract.
Once the storm has passed and power and water services are restored you will want to inspect the home for damage. If you are securing a mortgage for the property a lender will want an inspection regardless. If in fact the home was damaged then you will need to carefully read the “Rise and Loss” section of your agreement to identify who pays for the repairs and how to handle it.
Just like in every real estate transaction – communication is key. Even more so when deals become more complex like in the event of a natural disaster. Be sure to stay in regular contact with your agent, lender and all parties involved to ensure that all steps are completed properly for the smoothest transaction possible.