The period between when an offer to purchase is accepted until the sale closes is one that is fraught with opportunities for the deal to fall apart. While both real estate agents do their best to coordinate everything, there is still a chance something may go wrong. Let’s take a look at some of the problems that might pop up.
Clouds on the title
If there are irregularities in the chain of title, known as 'clouds”, you will need to clear them before the sale of the home can proceed. Common clouds on title records include liens and unpaid mortgage loans from a former owner.
One of the most devastating problems we might run up against is a low appraisal. Luckily, there are several ways of dealing with the situation. These include challenging the appraisal, requesting that the buyer come in with more cash to lower the loan amount and lowering the price of the home. The latter is the most common solution since other buyers’ appraisals will most likely be similar.
A remorseful buyer is typically a first-time buyer, fearful that he chose the wrong house or that he can’t afford the one he did choose. Hopefully, the buyer's real estate agent is savvy enough to help him through buyer's remorse by reminding him why he originally felt the home was perfect for him.
If the inspection finds significant problems, the contract may need to be renegotiated and you may need to repair items before the sale can go through.
Problems with the loan
Most lenders do what is known as a 'soft pull,' before the closing. This is a type of credit check that won't harm the buyer's credit rating but it will tell the lender if his credit has changed since he was approved for the loan. If they find anything that negatively impacts the buyer's credit rating, the lender may cancel the loan, thus cancelling the sale.
The final walk-through
Buyers have an opportunity to walk through the home once more before the closing to ensure that the home is in the same condition as when they agreed to purchase it.
To avoid unpleasant surprises, sellers should consider the following:
The typical home sale has few major problems but that doesn't mean we shouldn't be prepared for any that may come up.