4 Common Reasons Home Sales Fall Through
4 Common Reasons Home Sales Fall Through – Accepting an offer on your home from a buyer is an exciting feeling. You are one step closer to moving to a new home that better suits your needs and dreams. A signed and accepted offer does not mean the house is 100% sold though, sometimes offers fall through leaving the homeowner to put the house back on the market again. Here are some common reasons why this happens.
4 Common Reasons Home Sales Fall Through
1. Problems with the Home Inspection
The purpose of the home inspection is to have a trained professional look at the home on behalf of the buyers in order to see if there are any major issues or even minor concerns in the overall condition of the home.
In some cases, the home inspector may find things that are of concern and explain what it would take to fix the issues. These could be issues you know about as a seller and they can also be issues that maybe you were unaware of. These issues can cause a buyer to come back to the negotiation table and ask for a lower price or it could cause them to walk away from the offer completely.
To Help Prevent This:
- Have an inspection done on your own before listing. This is a great idea especially if you have an older or historic home. This is called a “pre-listing inspection.” It will help you to find and address any issues that may or would of come up in the buyers’ inspection and also help you to decide if you are going to fix them or list with an adjusted asking price or offer credit.
2. Contingent On Sale
In some cases, home buyers will look at homes before or while their home is still up for sale. When they make a formal written offer they will include a contingency that their home needs to sell first within the specified time frame for the offer to close. If their current home does not sell in the timeframe specified in the home offer, they could end up asking for an extension or back out of the offer altogether without penalty.
To Help Prevent This:
- As a homeowner/seller you are not required to take an offer that is contingent upon sale. It can be risky to accept these types of offers. Of course, if this is the only offer you have received and your home has been on the market for a little while you might consider accepting it. The best decision is to make one with the advice of your experienced agent.
Additional: Are You Holding Out for a Higher Price or Should You Drop it?
3. Buyer Cannot Secure Financing
When buyers are shopping for homes they have not yet finalized their home loan. A mortgage is not guaranteed until a buyer has signed the final agreement with the lender and to do that several factors need to be entered into the loan application, including the exact amount(accepted offer price) being borrowed. A number of things can happen in the final approval process of a loan, and sometimes it can result in the denial of a loan. When this happens a home goes back onto the market as an active listing.
To Help Prevent This:
- It is less likely that a buyer will fail to secure funding when they are pre-approved. As a seller, you can have your listing agent request that any buyers making an offer be pre-approved. It is not a 100% foolproof guarantee, but it does make the chances that the buyer will secure their loan much higher.
4. Appraisal is Lower Than the Sale Price
Buyers seeking to finance the home purchase with a mortgage will be asked to pay for an appraisal on the property. If this appraisal comes in significantly lower than the list price or the offer they made on the home, the lender might ask the buyer to pay the difference or just not approve the loan at all. This can be common in a seller’s market where homes enter bidding wars and offer end up much higher than the asking price. If the appraisal does come back low the buyer may return to the negotiation table asking for a lower price. If the two parties can’t agree on the same number the buyer might walk away as they are unable to secure lending and the deal will fall through.
Related: What if you can’t fix your fixer-upper before selling?
To Help Prevent This:
- To lower the chances of being in this situation make sure to discuss the fair market value of your home with an experienced local realtor. They can help you to determine the best listing price for your home to deter appraisal issues and also get your home sold faster because it is priced correctly.
For more home selling insights please browse the website. For help selling a home in LA please contact me anytime.
Start Here and Search the Main Areas of Los Angeles County:
Pacific Palisades | Santa Monica | Malibu | Playa Del Rey | Beverly Hills
More Advice for Home Sellers in LA County
4 Common Reasons Home Sales Fall Through
