Bringing a real estate transaction to a successful close at times can be difficult. There are many moving parts to a transaction, and having the aid of a Realtor, can only increase your odds of it being successful!
Once you have a signed contract you still need to get through the inspection, mortgage, and appraisal process. All it takes is one person dropping the ball or one surprise to bring the process to a screeching halt. Believe me when I say – I’ve been there! Not fun!
There will times when a buyer may back out of a deal but knowing the reasons why may better prepare you to avoid that situation.
Financing issues – there is a huge difference between pre-qualification and pre-approval. When an offer is submitted, it is important to know which one the potential buyer has, and hopefully issued from a reputable mortgage lender. Most always, a pre-qualification letter is based on the mortgage lender reviewing credit and taking verbal information from the potential buyer. Whereas a pre-approval many times will review credit, and income, employment, tax returns, and bank statements to determine the buyer’s creditworthiness.
Home Inspections – Unless a buyer is paying cash or removing their inspection contingencies, the first step in the offer acceptance process is to do home inspection. The main job of an inspector is to ensure that the structure and mechanicals of the property are in good working order and inform the buyers of any short comings. After the inspection, the buyer will receive a full inspection report to review and determine whether there are items of concern that they would like addressed by the sellers. I counsel my buyers to focus on health & safety issues for the most part. The buyer must assess whether the cost of repairs is truly reflected in the price or feel the need to re-negotiate. In many cases, the seller will agree to fix some of the minor repairs or negotiate a credit to the buyer towards their closing costs. However, if the buyer & seller cannot come to terms, and the items are severe and cost prohibitive, the buyer has the right to walk away, and deposit money will be returned.
Multiple Offers Presented – It is not uncommon, although I do not advocate for it, buyers will submit multiple offers on different properties, especially in this market, in effort of getting an offer accepted. But sometimes even when their offer is accepted it does not mean they stop looking. Unless there is a massive earnest money deposit they risk losing, they may be able to walk away if they find a property they may like more while risking little. Buyers can use their contingencies or “lack of financing” to back out of a deal without breaking the contract. This can leave the seller starting the process all over again! The best way to deter this situation is to increase the earnest money deposit. If they have more to lose, they would be less likely to go down that road.
Cold Feet – For anyone who has bought a home before knows it can be a stressful process, and a big emotional commitment. From the time you start looking for a home up until the day of the closing it can be a roller coaster of emotions. It is not until the day of closing and paperwork is signed, is the deal done! So just breathe and take it one day at a time. Rely on your Realtor to guide you through the process. It will have been well worth the ride!!
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