Whether you recently listed your home for sale or have made bids on properties in the hope of buying a new house, having an accepted offer often means that the process is nearly complete.
Unfortunately, sometimes things come up between when the seller accepts an offer and the final signing that can make the entire transaction fall through.
Any number of issues could derail a residential real estate transaction, but some are far more common than others. What are the concerns that you should be mindful of when you are buying or selling real estate?
Undisclosed defects that come up during inspection
One of the most frustrating experiences as a buyer is making an offer only to discover that the property is not in the condition you thought it was. Sellers can improve the chances of competitive bids on their property and maximum sale prices by minimizing how much information they provide regarding defects.
However, when they do so, they may not only run afoul of disclosure laws but may cause disruptions to the closing if the buyer demands repairs or backs out because of undisclosed issues the inspector discovers.
The seller can’t buy a new place
Often, sellers put their houses on the market because they want to upgrade where they live or maybe move into a smaller space because they are ready for retirement. With a hectic real estate market, they may not be able to secure a new place to live and may feel like their only choice is to back out of the sale. Buyers may be left in a difficult position, especially if they sell the home or they terminate their lease and then the seller backs out of the transaction.
There is an appraisal gap
With a competitive real estate market, there could be significant price increases that lenders may feel put them at too much risk. When a prospective buyer offers more money than a lender can safely finance, they may not be able to move ahead with the closing. Unless the buyer has enough cash on hand to cover the gap or an alternate source of funding, they may be the ones who have to back out of closing.
Identifying and planning for the most common issues that arise in residential real estate closings can help you get to the table smoothly.