Top 10 Things That Can Go Wrong During a Real Estate Transaction
Every day in real estate is a fresh, new day! I think that's what most of us love about this business - there's never a day that is just 'mundane' - in fact, no two transactions are ever the same! Some go so smoothly, you arrive at the Closing table and can't believe that there hasn't been a bump in the road. Others...well, not so much!
The past year, we've had some of the most unpredictable things go wrong in this business - here are my top ten for the year (so FAR)!
10. Buyer remorse - In an era of bidding wars, it's human nature to want to 'WIN!' A few days after winning the bidding war, especially if buyers have gone significantly higher than list price, buyers tend to feel a little remorse. Some, to the extreme, ultimately making the decision to terminate the Contract to purchase the home.
9. Unknown structural issues arise - One of the BEST ways to avoid this is to have a pre-inspection when you are listing your home. This way, if there are structural issues, you have time to remedy them prior to the sale. Buyers are typically terrified (albeit they don't always need to be terrified) of structural issues, which can cause a cancellation of the sale.
8. SURPRISE! You've got MOLD! - This can also be a deal-killer and again, can be avoided with a pre-inspection.
7. Buyer has been pre-approved - but, wait! The buyer has NO CREDIT! - Yes, this has happened to a buyer for one of my listings. The lender issued a pre-approval letter based on income only. The buyer had NEVER had a car loan, credit card, or student loan, and therefore when the documents got to the underwriter, the file was rejected! Of course, the deal fell through but, the seller was able to quickly take the backup buyer and seal the deal!
6. WAIT! You can't take it with you! - Listing agents review the Offer to Purchase in NC with a Seller when the listing documents are prepared. We also review the FIXTURES with Sellers when we receive an Offer. MOST Sellers get it but, on occasion, a Seller will remove an item deemed a permanent fixture and the Buyer is NOT happy about it! This typically happens with items like curtain rods, chandeliers, and even refrigerators. Conversely, Buyers think that all appliances remain with a property - check to be certain that you've included your request for refrigerator, washer, or dryer - items that ARE personal property in our state but, may not have been in your exit state.
5. Sellers failed to properly complete repairs - As a Seller, your best bet is to hire a contractor to make all of the repairs. Be certain that this contractor offers a warranty as well. Having someone handle all repairs also makes your life easier - after all, you are packing to move and this is a very busy time for you. You honestly don't need to be running to Lowe's to buy caulking or plumbing items - just let someone else handle that work for you. This way, if it is not done properly, the responsibility falls on the contractor to come back and make it right.
4. Lender drops the ball - One reason to be SURE to use your Realtor® recommendations when it comes to lenders. Just as all real estate agents are not created equally, nor are lenders! We recently had to pull a loan from a lender who had put the Buyers' file on the back burner and truly FORGOTTEN about the file! Thankfully we realized this (yes, the Seller side realized it first!) in time to have the new lender meet the Closing deadline. We (the Sellers) demanded that the Buyers utilize one of our preferred lenders who got the job done in 10 days...appraisal and all!
3. Faulty appraisal - This happens for a variety of reasons but, the top two reasons are that the appraisers have difficulty showing appreciation within a community whereas it's easy to show depreciation. The second reason this occurs is appraisal management companies send appraisers from out-reaching areas and they are not familiar with the comparable properties enough to generate an accurate appraisal.
2. Buyer Converts Auto Lease to Purchase (or, buys a new car!) - This doesn't fly with lenders if your debt-to-income ratios are tight. It's best not to make ANY purchases with credit or your savings until AFTER the Closing. This way, you aren't in jeopardy of losing your new home and all of the money that you've spent in preparation for being the new homeowner (inspection costs, due diligence fees, earnest money deposit, appraisal costs, title search costs, etc.)
1. The SELLER decides not to SELL! - Yes, I've had a BUYER change their minds on the day before closing (and even the day OF Closing) but, never a Seller! We had a Buyer who had worked through inspections, appraisal and was headed to Closing, only to receive the call, "I'm so sorry but, the Seller has changed their mind - they're not going to be selling their home!" Buyers have the right to recoup damages, including but, not limited to any and all costs associated with their home purchase. If you're thinking of selling your home, be 100% sure that you are prepared to go through with the sale before you list your home for sale!