When a buyer and seller agree to the terms of a real estate sales contract the transaction is a done deal right? Unfortunately, the reality is that thousands of real estate deals throughout the United States fall through each year. Here are 4 reasons real estate deals fall apart.
For buyers, the entire home purchase process can be very emotional. They’re investing a significant amount of money in what they hope is their dream home. The buyer gets excited about a property and makes an offer, only to become uneasy about the decision after the buyer and seller have come to terms. Unfortunately, there is little sellers can do to eliminate buyer’s getting cold feet, but they can be on guard for buyers who seem especially nervous or hesitant about negotiating a deal.
Home inspection surprises
Many home sales fail to make it to closing if the buyer’s inspection reveals serious physical faults with the property. When defects are discovered that the buyers or sellers are unwilling to correct at their own expense, the purchase contract becomes subject to negotiation. Often times the repair costs are not worth loosing the deal, but neither the buyer nor seller want to compromise and the transaction falls through.
Today, buyer financing trouble is among the biggest sale killers. Even a loan preapproval does not guarantee that buyers will be able to get the loan they need. Securing a home mortgage has become more difficult in the wake of 2008′s recession and housing crisis. Lenders have tightened their restrictions and as a result, more buyers are losing real estate deals because of their inability to secure financing. Even the slightest change in income or debt can put an end to the deal.
Home appraisers use historical data to help determine the value of a home, and when real estate values are on the rise it can be tough to find comps that support the sales price. In a sellers market, buyers are often entering into bidding wars to get the house. A buyer’s lender will only lend up to the value of the property, so if the home value appraises lower than the contract amount, the buyer cannot secure the full financing. The seller has to be ready to negotiate and be willing to lower their price if they don’t want to lose the buyer. Unfortunately, sellers are not required to lower their price to meet the low appraisal. If a seller is unwilling to lower their price and a buyer is unwilling to pay above appraised value, the deal will fall apart.
Nothing is more disappointing than thinking your home purchase or sale is a done deal, only to have it crumble in the final stages of the process. Although many of the issues that can cause a real estate transaction to go bad cannot be prevented, individuals who are buying or selling a home should take the steps necessary to help avoid any issues that might arise. Make sure you are working with the experts at COListings who can help anticipate and negotiate the way through potential problems to keep your transaction from falling apart.