Regardless of record-breaking home prices and interest rates for mortgages being at an all-time low, real estate deals still fall apart all the time! Here are some of the reasons why…
The Seller Doesn’t Have a Clear Title
If the title of the home is unclear when conducting a title search, this may cause a buyer to back out of the deal as they don’t want to put themselves at risk of owing any liens that exist against the property.
While title insurance can protect buyers against surprises, anything that comes up during a search and that the buyer is aware of wouldn’t be covered through their insurance. Therefore, we can only expect buyers to back out of the deal.
The buyer’s home inspection finds issues with the seller’s home
A lot of deals are contingent based on inspections. Usually, a seller would have to declare anything that they know is an issue with the house, but they don’t always do so. While it is not always intentional, sellers do not always know what issues their home may have.
This is why buyers need to invest in a professional that is trained and knowledgeable to find issues in a home before closing. If the inspector finds anything, the buyer either changes up the terms of their offer or can pull out their offer entirely. This tends to depend on the severity of the issue and/or willingness of the seller to negotiate on terms.
The Buyer’s Financing Falls Through
While most real estate agents make their clients go through a pre-approval process with their bank for a mortgage before they start showing them houses, it’s important to remember that financing can fall through at any point. Even with pre-approval! And it’s not necessarily the bank’s fault….
There are a couple of things that could happen to the seller that would change the conditions for which the mortgage they were pre-approved for could change, including:
- The buyer loses a job
- The buyer takes out another personal loan