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The Top Reasons A Pending Home Sale Falls Through
Home sales can be lengthy, complicated transactions with many moving parts. Unfortunately, deals can and do fall from time to time. When our clients are in the process of buying or selling a home, our real estate agents often encourage them to temper their expectations until the very end. Especially in today's chaotic market, anything can happen, so it's important to be prepared.
Understanding the most common reasons why home sales fall through can help you take steps to mitigate the risks. If you're buying or selling one of these Suffolk County homes for sale, be prepared for the following scenarios:
- The Buyer Gets Cold Feet
Buying a home is a big decision, so it's no surprise buyers get cold feet from time to time. Buyers are able to back out without penalty based on the results of any contingent inspections. If a buyer backs out after accepting the results of the inspections, then they'll lose their earnest deposit. Negotiating a higher earnest deposit (or accepting the offer with the highest deposit) can help you mitigate some of the risks. - You Can't Come To Terms On Repairs
Your home inspection will most certainly uncover some issues; therefore, you and the buyer will have to negotiate on who fixes what. If you're unable or unwilling to meet the buyer's demands, you can always make a counteroffer. However, if negotiations ultimately fail, or if something major shows up in the home inspection, then the buyer might walk away. - The Buyer's Financing Falls Through
Even if you accepted an offer from a "pre-approved" buyer, financing can and does fall through. If a buyer loses their job, makes a big purchase, or has a major change to their credit report, this could result in the lender declining the borrower's mortgage application. To help mitigate the risk, have your agent call the buyer's lender prior to accepting the offer to ensure the pre-approval is valid. - The Appraisal Comes In Lower Than The Sale Price
Your buyer's lender will require a home appraisal prior to formally agreeing to finance the purchase. If the appraiser determines the home value is lower than the sale price, the lender will only cover up to the appraised amount. This can impact the buyer's ability to pay the offer price, and unless you can negotiate a new deal, the buyer has the right to walk away so long as they included an appraisal contingency in the offer. - There Are Title Issues
During the closing process, a title company is responsible for transferring the deed and finalizing the transaction. If the title company finds a lien on the property or that someone else is entitled to it, then it can trigger the need for extensive research, documentation, and obtaining necessary approvals from all parties involved. Best case, this process can delay closing. Worst case, the buyer may walk away.
While home sales can fall through, it doesn't happen very often. The best thing to do is work with your agent to ensure you're able to mitigate the risks when accepting or negotiating an offer and contact us today if you're looking to buy or sell your home in the near future.