While getting contracts signed is a huge milestone in a real estate transaction, it’s wise to save the real celebration until the deal closes. Even with thorough preparation, things can go wrong and real estate deals fall through. Here are 4 common reasons why real estate deals fall through for buyers and sellers.
1. Buyer’s Remorse or Cold Feet
Buying a home is a big deal, especially if it’s your first. Sometimes, buyers get cold feet at the last minute and look for ways out of a transaction. This is especially common with first-time buyers. Feeling anxious during your first home buying is to be expected, and it’s extremely important to be sure of what you want before making an offer on a home.
2. Issues During the Inspection
Another common reason why home buyers don’t move forward with a home purchase is because of issues they find during the inspection. It’s never advisable for a home buyer to waive their inspection contingency. Buyers have the opportunity to ask the seller to address issues but if the parties can’t reach an agreement, the buyers have the option to cancel during the contingency period.
3. Appraisal Came Back Low
Unless the home will be paid for in cash, you’ll likely need an appraisal to move forward with the transaction. The appraisal reveals what the home is actually worth in the current market. If for some reason an appraisal comes back low, then the buyers and sellers must negotiate on how to move forward and if they’re unable to reach an agreement, the buyer may cancel.
4. Financing Issues
In today’s market, most buyers submit preapproval letters with their offers, but sometimes unexpected problems arise with the loan and a buyer’s inability to obtain financing can mean the escrow falls apart. That’s why accepting an offer that’s accompanied by a letter of preapproval is highly encouraged.
While some reasons why real estate deals fall through are controllable, others are not. It’s important to keep realistic expectations throughout the home buying and selling process. To reduce the odds of your real estate deal falling through, hire an experienced real estate agent to guide you through the process. Have questions? Give us a call at 562.896.2456 or fill out the form below.