Could the debt limit crisis affect pending real estate transactions?

[Elwood P Dowd]

I ask this because some close personal friends of mine just signed the papers to sell their home and and a few acres of land that go with it. They are retired and moving to a smaller place with much less maintenance expense, yard work, etc. The profit they make on the swap is almost a necessity for them to have a decent retirement.

If the repukes are really stupid and stubborn enough to force a debt limit crisis, just what effect will that have on pending transactions like this one? This will probably take several weeks for all the financing, surveying, and paperwork to be completed, so what are we looking at here in regards to fallout affecting the financial industry, lending institutions, mortgage rates, real estate values, and such?

[frazzled]

1. They've probably locked in a rate

so I should think it won't have an effect within the next few weeks.

The government shutdown is having an effect on homes purchased with FHA or VA loans, due to limited staff.

[Elwood P Dowd]

2. Don't remember where I heard it on TV while channel surfing,

but someone said failure to raise the debt limit could wreck havoc in the business world almost immediately.

[truegrit44]

3. This sounds exactly like where we are at...

We have just put up for sale our home and 10 acres and looking for smaller acreage and less house and outbuildings at a downsize price so we have some savings. I am asking the same exact ? We own our home free and clear and will use the sale to by another and hope to have a little bit of a next egg left over.
Will this KILL the market for prospective buyers and make it difficult for a buyer to get a loan even a conventional loan?

[Sgent]

4. Yep

in two ways

1) The IRS is no longer verifying tax filings, meaning mortgages cannot close.

2) If the debt ceiling does happen and the US defaults on our bonds, the interest rates will go up significantly.