6 Common Reasons Real Estate Deals Fall Through

Acquiring the ratified real estate contract for a property doesn't mean that the deal is already done and successful. Of course, it can be celebrated after all that you have gone through in the process. But it would be best to remind yourself that there are still many things that can happen between the contract date and the closing date. In addition, there are possible problems that may arise. It can be an issue with the real estate agent, the buyer, the mortgage, the seller, or a combination of all. To ensure the success of your real estate transaction, it is best to know the common reasons real estate deals fall through. Here are the things that you should watch out for:

Home inspection issues A home inspection is an essential part of the homebuying process. The inspection is when your home inspector can assess whether or not some issues or repairs need to be done in the home. Real estate deals fall through in cases wherein significant problems are found during the inspection. These significant issues can include molds, pests, foundation or structural issues, electrical issues, water pressure issues, roof damage, and building code issues.

If you are a home seller, I suggest having your home inspected before listing your property on the market. This will give you a chance to address possible issues before a potential buyer knows about them. In addition, it could help you avoid problems that could cause your buyer to withdraw their offer.

Buyer's failure to sell their current home Another common reason real estate deals fall through is when a buyer fails to sell their current home on time. When buyers purchase a new home while still waiting to sell their current home, they submit a home sale contingency offer. This means they can withdraw their offer if they can't sell their current home within a certain period. Some homes take a longer time to sell than other homes. If this happens, the real estate deal has a chance to fall through. My services include a detailed timeline and strategy to minimize this occurrence (not remove but minimize).

Rejection of mortgage application Getting pre-approved for a mortgage is a must when buying a home. However, a pre-approval doesn't necessarily mean that you will be approved for the mortgage. While lenders do their best to ensure that the pre-approvals reach the closing date, sometimes, there are just some things that the lender has no control over. For example, some of the reasons for the mortgage rejection are the buyer's loss of job or sudden health issues.

Bank appraisal issues If there are issues with the bank appraisal, a real estate deal can fall through. Real estate deals that involve obtaining a mortgage will need a satisfactory bank appraisal. If a bank appraiser determines that the property's value is less than the sale price, it can be a problem. The buyer and the seller can negotiate and come to terms depending on the difference in the amount. So if the value of the property is much lesser than its sale price, and an agreement can not be made between buyer and seller, the real estate transaction could likely fall through.

Problems with closing documents Before closing a real estate deal, various documents need to be reviewed. Common problems may involve property title problems, such as outstanding liens, public record errors, past bankruptcies, or missing heirs. In addition, we sometimes encounter a delay in title recordings in Baltimore, especially if the property you are purchasing is a flip. Therefore, it would be best for both the buyer and seller to prepare the needed documents early to have enough time to address possible issues.

Closing costs Another reason that causes a real estate deal to fall through is when a buyer fails to foresee and prepare enough money for closing costs. Closing costs include attorney fees, appraisal fees, escrow fees, homeowners' insurance, transfer fees, and property taxes, among others. The closing costs can be high, and failure to set aside money for it can cause your real estate transaction to fall through.

A competent real estate agent is essential.

It is not just about finding the perfect home and looking for the right deal. It is essential to have a trusted real estate agent who will guide you throughout the process and prepare you for any issue that could arise during the real estate deal. With a competent and knowledgeable real estate agent, you are guaranteed that someone will efficiently help you address all possible concerns.