Purchasing your first home is a monumental life decisions, it’s also a huge investment. Monetarily, next to wedding, automotive or educational expenses, it’s the largest purchase of a lifetime. But money doesn’t buy a home…love does. Of course, with so much at stake, in spite of our best efforts things can and do go wrong with real estate transactions. But if you have enough foresight, luck and finesse, you can avoid them. Or at least be prepared for them by understanding these 5 things that can go wrong with a real estate sale.
The Buyer backs out
Everything is going well. The buyer loves the house and has already planned out where all of their belongings will fit in the space. But then bam, they back out. Often times it’s out of their control. For instance, illness or worse can affect a buyers ability to sign on the dotted line. However, buyers remorse and insufficient funds are more likely to be the cause for cold feet and second thoughts.
Our advice, to would be buyers, is to be realistic. You should perform thorough research before making any offers and get pre approved by more than one mortgage lender before moving forward. Conversely, sellers shouldn’t get their hopes up too soon. As a seller, you need to understand that offers don’t automatically mean a sale. Furthermore, having realistic expectations about your home’s value as well as working with the right team to insure qualified buyers are seeing your property is a must.
Buyers aren’t the only one’s guilty of pulling out of a seemingly copacetic agreement. Seller’s sometimes misrepresent their properties, change their minds and can intentionally misinform about property issues. It’s even been known for a seller to believe they own the land but in actuality it belongs to a third party. For example, you may think you own the land your deceased parent left you but, unbeknownst to you, your parent took out a confusing reverse mortgage and the home really belongs to a bank.
Most issues with seller misrepresentation happen when a deal is already on the table; and “seller’s remorse” is just as real buyers. Sellers need to make sure they own their property before putting it on the market. This includes checking for liens (debts against property), unknown title issues and explaining exactly what is for sale and what’s not. Buyers have to perform thorough research before making offers. Research that includes detailed home inspections and appraisals. It’s also wise to have a second option handy in case the perfect deal goes south.
Sometimes it’s the property itself stopping a would be sale. We know lenders require buyers to hire property inspectors before lending funds but home’s don’t always pass inspections. Other times a seller may have liens against their property, unpaid bills or encroachments that they don’t realize until third parties get involved. Natural disasters can also inhibit your ability to purchase your dream home; as an unforeseen fire, flood or hurricane will definitely change the value of a home, if it’s seriously affected.
Again, It’s important for sellers to stay on top of things to avoid drawing out or missing out on a would be deal. If a property does have any issues, the multiple inspections it will go through will most likely bring them to light. Moreover, if a seller explains certain issues before hand, they may even be able to work around them with a malleable buyer.
Third party issues
Some issues are often out of both the buyers and sellers control. Certain issues with mortgage lenders, inspectors and appraisers are prime examples. A buyer may have good credit and look good on paper but still run into issues with a lender, for a variety of reasons. One such reason could be a lender who needs too much supplementary documentation before moving forward, which can prolong a deal if you aren’t prepared. Worse, you can accidentally choose a lender who isn’t on top of things professionally. The same can be said for inspectors and appraisers and choosing the wrong company or individuals to work with can set you back on time and money. Keep in mind that sometimes the longer a deal stays on the table, the more likely it becomes that it may fall through.
You don’t have control over someone else’s work ethic but do you have control over who you work with. Avoid hiring the wrong real estate professionals by starting out with the right realtor. Hiring a realtor you can trust and get along with on a professional level will brings with it affiliates and associates you can trust on that same level as well. You should also get your finances in order before approaching potential lenders and shop multiple inspectors and appraisers, even if you receive great recommendations.
Last Minute request
Most everything on this list could possibly be classified as a last minute request or requirement. A lender needing more documentation is often both a third party and last minute issue because a buyer typically won’t start making offers until they think they’ve procured a loan. Moreover, a property can pass all inspection but a waterline could burst unexpectedly days before closing, or even worse after. However,most last minute request will involve finances in some way, shape or form.
For example, both parties involved in the sale may not be clear on exactly who’s paying for what. This happens a lot because buyers are unclear about exactly what appliances and fixtures are staying with the property after closing. Sellers need to be very clear about what’s for sale before they put their property on the market and buyers need to be just as responsible. Its also important for both parties to be openminded around negotiations. Don’t let a few dollars get in the way of a deal, especially after putting so much time and effort into getting it on the table in the first place.
They say anything worth having is worth fighting for. They also say it’s important not to make mountains out of mole hills. When buying and selling a home you will run into unforeseen issues but most of the time a problem is only as big as you make it. By being prepared for the worse while planning for the best ,you not only create a better situation, you take your future into your own hands.