Even if you’re already at the closing stage of a real estate transaction, know that it is not yet a done deal. There are plenty of hurdles between contract and closing dates—both on the ends of the buyer and seller. Deals sometimes fail for a variety of reasons, and knowing why they happen helps in avoiding them.
Why Real Estate Deals Often Fall Through
1. Inspection Issues
For sellers, receiving an offer is not equivalent to closing the deal—it’s just the start of a long process. Ensure that it won’t extend longer than necessary with a comprehensive property inspection. Most real estate agents will recommend getting one before listing the property. An inspection report allows you to address any underlying issues that may impact the price and tone down a potential buyer’s interest in your home. Inspection findings like pest infestations, mold growth, system issues, and structural damage are costly to fix and can be used as leverage for renegotiations.
All kinds of delays, ranging from unnecessary to unforeseen, can make a deal fall through. Working with an experienced real estate agent helps minimize setbacks in the transaction. They will draft a reasonable timetable for you to follow, which includes scheduling for agreed repairs and preparing the necessary paperwork. Problematic closing documents, particularly ones related to titles like liens and encumbrances, can prolong the process. When dragged for too long, this can cause buyers to call off the deal.
3. Mortgage-Related Problems
Buyers opting for a mortgage should already have a pre-approval letter before viewing homes. However, it’s not a guarantee that they will be approved for a loan. Unforeseen events like family changes or financial problems can happen sometime between closing and actual selling, which can serve as grounds for rejection.
Another mortgage-related issue that can affect deal closing is bank appraisal. Appraisers are different from inspectors—the former determines the value of your home based on its features and comparable properties around the area. When a bank appraisal falls short of the agreed sales price, it may put off the buyer entirely. An experienced real estate agent can work with the buyer and seller to come to agreeable terms before the deal fizzles out.
Prevent real estate transactions from falling through by working with a seasoned realtor from EXIT Realty Upper Midwest. With realty offices in Minnesota, Wisconsin, Iowa, North and South Dakota, and Illinois, their real estate agents have the expertise and in-depth local knowledge, which are vital in closing the deal. Call (651) 505-3570 to speak to an EXIT agent or visit their website today.