Five Ways To Blow The Deal
Here are some things that can derail a real estate transaction. Home sales are complicated transactions, so it is important to know how to keep transactions moving along smoothly.
When you are preparing to buy a home there is a logical order of events that lead up to closing. Each phase should be approached with a methodical and careful determination. Here are five common reasons that sales fall through.
Procrastinate On Securing Financing
Buyers this means you! Getting financing is an extended process that has at least three stages before you can move to closing. Put it off if you want to not be taken seriously by realtors and sellers. If you do get a seller, you have the perfect opportunity to pull the rug out from under them by not having a source of funding when it is time to close. Make financial pre qualification a priority, it takes time and is bound to throw up some obstacles before you get the thumbs up.
For sellers, if you want the sale to fall through just go ahead and work with anybody, regardless if they have been preapproved or not. It is like rolling the dice when it comes time to close. And of course there is that extra six to ten weeks to get financing from scratch it will take close assuming they can qualify.
Try to work only with buyers who are taking it seriously. At the very least your prospects should have already secured preapproval from a lender. Finding a cash buyer might seem ideal but they often will attempt to use this position of strength to negotiate a discounted price.
Low Appraisals Can Be Like A Bucket Of Cold Water
When the appraisal comes in low it might sting a little bit, or a lot! As much as you want to get the price you had your heart set on, you may have to swallow your pride unless you are prepared to wait a long time, i.e., until the market catches up with your ego.
The Home Inspection And Title Red Flags
There are two ways in which you are at risk when you agree to purchase a home. If it is a new-built home you will by definition not have any unexpected claims to the title of your home and new homes usually come with a warranty.
In previously owned homes this is a different matter all together. Previous owners may have some claim over the property and wear and tear accumulates on the structure and fittings over time. Make sure to follow up closely on the title search and all recommended building inspections.
When you allow the seller to make the sale conditional upon the sale of their home you multiply the risk of the whole process dropping through the floor. The sale of your home will go through a lot more easily if there is no chain of other sales that have to first take place. Avoid including this contingency in your contract and give preference to buyers who do not demand it if you want to significantly speed up your selling process.
Scare Your Buyer Out Of Closing
As a seller you should definitely stay away from nervous buyers. If you can have your choice, select the buyer who is the most confident and comfortable with the transaction. Prequalification and larger deposits are again important indicators of intentions and confidence.
An experienced realtor can help guide you through all of these potential pitfalls. But, whether you are a seller or a buyer, it does help if you have done your own homework and have a good conceptual understanding of the things that cause home sales to fall through.