Sandy's Lingering Effects: Delayed Closings
November 9, 2012
Superstorm Sandy’s aftereffects continue to wreak havoc along parts of the East Coast and cause headaches for those who were in the process of buying a home when the megastorm struck.
Lenders are requiring that properties be reinspected in affected areas, such as along coastal New York, New Jersey, and Connecticut but also properties that may fall outside these areas too.
“If you are in a FEMA-declared disaster area or emergency area, banks are requiring an inspection of the home to affirm whether there was damage done,” says Jason Auerbach, a divisional manager for First Choice Loan Services, of Morganville, N.J. “They are reinspecting properties to make sure it’s still a functional property that can be lived in.”
The reinspections have caused delays in closing on home sales in the areas. Many lenders have extended any lock-in rates on mortgage rates for closings that have been delayed due to the storm.
With properties that were under contract damaged by the storm, negotiations most likely will have to start from the beginning, real estate professionals say. If the renegotiations are successful, an appraiser will need to return to the house to verify everything is functional and to verify the value of the home. Buyers might also want to consider whether their insurance premiums will rise after the storm, agents say.
In the affected areas, lenders may require that both buyers and sellers sign forms saying that the property suffered no storm-related damage.
Source: “Dealing With Delayed Closings After Hurricane Sandy,” The New York Times (Nov. 8, 2012)
Updated: June 18, 2018