Buying a home can be both an exciting and stressful time. Every buyer looks forward to making it to the closing table and walking away with keys to their new home. Unfortunately, there are many steps along the way that can create bumps in the road. Sometimes issues can be resolved and other times deals simply fall apart. Being aware of common issues can help you better prepare for them and, in some cases, avoid them altogether. Here are 3 common reasons why real estate deals fall through.
Home inspection issues
Inspections are an opportunity for buyers to identify latent defects in a home. Like everything else in the real estate process, issues must be negotiated. This means that both buyers must work together and find common ground. It is unreasonable for buyers to request that every little item uncovered be addressed by a seller. Likewise, it would be unreasonable for a seller to expect a buyer to ignore major issues with a home. Either party being inflexible will likely cause a deal to fall apart.
Let’s face it, no home is perfect. Additionally, some issues brought up by inspectors may simply be recommendations for improvement. Taking a fair and reasonable approach to home inspection negotiations can help deals stay together.
An appraisal is an opinion of exact market price performed by an independent party. Appraisers will review recent sales of comparable properties and overall market conditions. For buyers using a mortgage to purchase a home, a satisfactory appraisal is critical to receiving mortgage approval. For an appraisal to be satisfactory, the home’s value must be equal to or greater than the agreed purchase price. Additional conditions (such as home safety features) may apply for FHA or VA financing.
In a market where prices are on the rise, appraisal issues may be more common since the prices of sold homes may not fully reflect the current demand for properties. Put simply, the market may be moving so quickly that prices can increase monthly. It is important to work with a competent agent to help resolve issues with appraisals and negotiate terms that allow both buyer and seller to move forward with the sale.
Another common reason for real estate deals to fall through is the mortgage approval process. When a home buyer obtains a mortgage pre-approval, their credit score, income, and debts are typically reviewed. Once they find a property to purchase, then their finances are reviewed more closely and thoroughly. The property being purchased is also reviewed. There are many possible issues that can arise. Buyers can minimize mortgage approval issues by providing good documentation to their lender and avoiding any major changes to their credit.
Saving real estate deals
Ultimately, even seemingly easy real estate transactions can encounter issues. This is why working with an experienced real estate agent is so important. A knowledgeable agent will properly advise you on your options and how to best approach different scenarios. They can help protect your best interests while offering creative solutions to common problems. Real estate agents can truly make the difference in your home buying experience.
Suzanne Plewes is a broker associate at RE/MAX Alliance. Write to 750 W. Eisenhower Blvd., Loveland, CO 80537, call 970.290.0373 or e-mail [email protected].