Everyone enters a real estate deal with the hope for success. But in today’s highly competitive market, there are many ways through which a real estate transaction can go wrong. These reasons may be the clients’ (home buyers/sellers) or agents’ fault. Other times, it is no one’s fault at all.
In this article, our team of experts explores why your real estate deal may fall through. The most common or likely reasons are:
- Not hiring a real estate agent
- Hiring the wrong real estate agent
- Buyers’ inability to sell their houses
- Rejected loan applications
- Inspection problems
- Appraisal issues
- Buyer’s remorse
- Closing documents issues
1. Not hiring a real estate agent
Many people choose to go through the buying or selling process without the help of a professional. They believe this will help them save on the agent’s commission. However, they soon find their deal falling through because they don’t have the expertise to handle the process.
Real estate agents have the knowledge that can help prevent your deal from falling through. They know how to attract buyers’ attention, prepare homes for sale, and negotiate favorable contracts. Most importantly, they are equipped technically to prevent deals from falling through.
Therefore, to give your deal a better chance of success, you should hire an agent.
2. Hiring an incompetent real estate agent
Homebuyers and sellers make certain mistakes when hiring real estate agents. This then results in one of the most common reasons why real estate transactions fail – incompetent agents.
Hiring an incompetent real estate agent can make the home buying or selling process very stressful. In many cases, they cost their clients a great deal because they don’t follow up with clients or negotiate right. Other times, their incompetence causes the transaction to fall through. Occasionally, their mistakes can subject their client to the risk of litigation.
The best way to avoid hiring the wrong real estate agent is to hire the right one. To do that, here are what you should do when hiring an agent include:
- Don’t hire an agent solely because they are your relative or friend.
- Hire an agent who knows how the local market works.
- Ask for references of people who have worked with them before hiring them.
Perhaps, the best way to avoid hiring the wrong agent is to contact Bost Redevelopment. Our team of professional agents will give you a smooth, stress-free home buying or selling experience.
3. Buyers’ inability to sell their houses
Many homebuyers need to sell their homes before they can buy another one. While this is not a bad thing in itself, home sale contingent offers have a great chance of failing.
The reason is that buying and selling a home at the same time is quite difficult. Although most homes are salable, some take much longer in the market, and the seller may not have the time to wait.
Sellers can avoid getting into this situation by rejecting home sale contingent offers – if they can afford to.
4. Rejected loan application
Most homebuyers think having a pre-approval letter means that they are guaranteed a mortgage loan. But that couldn’t be further from the truth.
You see, while a pre-approval letter is a necessity for homebuyers, lenders may still decide to not give them the mortgage. This, in turn, then leads to a failed real estate deal.
Some of the problems that may make a lender decline a mortgage application after pre-approval are:
- Career change (such as from a full-time position to a contractor)
- Job loss
- Incurring of debt
- Dishonesty (with the lender)
- Issues with property discovered by appraiser
You should try avoiding these problems to give your real estate deals a better chance of success.
5. Inspection problems
Potential buyers are strongly advised to hire a home inspector to check a house’s condition before buying it. This inspection usually includes checks for superficial structural damages, mechanical faults, roof leaks, and more. Savvy inspectors use infrared devices that scan the house to detect active leaks or the presence of moisture.
If an inspection reveals one or two problems the buyer isn’t aware of, they may take back their offer – causing the deal to fall through.
As a seller, you can prevent this eventuality by organizing a pre-inspection. This will allow you to discover and fix any issues before listing your house on the market.
6. Appraisal issues
Bank appraisal issues are another common reason why real estate deals fail.
As you may know, real estate deals that involve obtaining a mortgage have to be subjected to a bank appraisal. If the appraiser values the house at the asking price or above, the sale will go through. However, if the house is valued way lower than the asking price, the transaction may fall through.
7. Closing documents issues
Before closing a real estate transaction, the attorneys, brokers, title companies, and/or loan officers will go through all the necessary documents. If there is any serious issue with these documents, the real estate deal can fall through.
Some of the closing documents issues that can lead to a failed real estate transaction are:
- Past bankruptcies
- Outstanding Liens
- Missing heir(s)
- Public record errors
- Title defects
If the parties in the deal can find a solution to any of the issues on time, they can save the deal. For example, in the case of the missing heir, if the seller can find the heir and have them consent to the sale of the house, they can close the transaction at a later date. But if not, the deal will fall through.
8. Buyer’s remorse
One of the worst nightmares for a home seller is finding out a week before the closing date that a buyer is not interested in buying their home. This factor, known as buyer’s remorse, is a common reason behind real estate transaction failures.
There are many reasons why home buyers’ remorse happens. The buyer may have found a better home, lost their job, etc.
Home sellers and their agents should screen their buyers and understand their buying motivations to avoid this situation.
Let Bost Redevelopment help you buy your dream house!
Having an agent like Bost Redevelopment in your corner automatically increases your chances of getting the house of your dream – even when you are buying it remotely.
Our expert team of real estate agents will provide all the support you need throughout the house buying process. We will use our network and connections to help you find the house of your dreams. Lastly, we will negotiate with the seller to make sure you get a favorable deal.
Want to talk more about your options? Please leave us a message below with your contact information and let us know how we can help you.
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