When a buyer makes an offer to purchase a home, both buyer and seller usually want the sale to go through as quickly as possible and with as little stress as possible. Sellers want to get their money back and move on while buyers want to embark on their new adventure and start building equity by paying off their mortgage.
Unfortunately, this does not always happen. A number of potential issues could delay or derail a sale, including the following common issues identified by the National Association of Realtors.
These issues can interfere with the sale of a home
According to the National Association of Realtors, here are the issues most likely to cause a contract delay:
- Problems with buyers to obtain financing, which accounted for 22% of problems delaying the sale of a property under contract
- Problems with valuation, which affected 22% of sales
- Issues with the home inspection or an environmental issue, which collectively affected 10% of sales
- Issues with title or deed that caused problems in 10% of cases
- Contingencies outlined in the contract that were not met, which was the underlying cause for 5% of delayed contracts
Financing problems can arise when buyers are not pre-approved for a home loan and have overestimated the amount they could borrow. These types of issues can also arise if something has changed between buyer pre-approval and final approval. For example, if a buyer changed jobs or took on a ton of other unrelated debt, it could lead to a loan closing issue.
Appraisal issues arise because lenders want to be sure that the home’s fair market value, as determined by a professional, is large enough to serve as sufficient security. If a home’s appraisal is too low, lenders may not lend borrowers the amount of money they need to buy it.
Inspection issues can arise when an inspector discovers that something is wrong with the property and the buyer and seller cannot agree on who should fix it or how much to discount, if any. if any, which the buyer should receive as a result of the problem.
Title and deed issues occur when a title search reveals that there are issues with the seller’s property. For example, if there is a lien on the property or there is an unexpected easement, this can cause problems.
Finally, contingencies are other terms that a buyer includes in the contract. If they are not met, the sale does not have to continue until they are.
How to Avoid These Problems When Selling Your Home
Both buyers and sellers can take steps to try to avoid encountering any of these issues.
Sellers should ensure they confirm that a buyer is pre-approved and they should price the property fairly to reduce the risk of it being undervalued. Sellers must also disclose any other competing claims to the property.
Buyers can do their part by getting pre-approved for a loan and being realistic about the type of inspection issues they should expect a seller to fix.
If both parties work to avoid these common problems, we hope that a delay can be avoided so that the purchase of the house can be completed quickly and easily.
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