How a Natural Disaster Can Impact a Closing

With the tragic events of Hurricane Sandy this past week, I’ve received a few emails from people asking why their closing were delayed OR how this could potentially impact a closing.

From the size of the storm, many lives will be impacted.

Whether it is a hurricane, tornado, flood, or all of the above, they can directly impact and delay a loan closing. This mainly comes into play if FEMA declares a county a disaster area and eligible for individual assistance. When FEMA makes a declaration like this, depending on the closing date, your closing could be delayed.

Hurricane Sandy didn’t have a major impact in Georgia, but there was a different story in September 2009. Heavy rains began falling on September 15th, and continued for about a week. The heavy rains caused flooding (some areas had record breaking flood waters) in some areas in metro Atlanta, and the Chattahoochee River swelled to 500 year flood levels. FEMA granted the request of the governor, and declared 17 counties in Georgia as a federal disaster area.

Once this distinction occurred, closings were postponed on all homes in those counties until it could be verified that the homes were not damaged or flooded by the storms. This “safety check” on the condition of the home was completed by having the appraiser who performed the home’s appraisal go back out to the property to ensure it wasn’t damaged/flooded. Once an appraiser signed off on the condition of the home, then all parties could proceed to closing on the sale of the home.

In short, that is basically what one should expect with the damage from Hurricane Sandy. There will be final inspections performed to determine that the homes under contract were not damaged. Once this is done, then you should be able to get back on schedule for closing.

Hopefully if you are reading this, you are safe, your family is safe, and the home you were about to purchase isn’t damaged by the storms. Stay safe out there, and thank you for reading!