When you make or accept an offer on a home, it’s easy to assume the deal is near complete once the offer is accepted. However, many variables can cause the house to fallout of contract before making it to the closing table. To help avoid this situation in the housing market, it’s helpful to be knowledgeable about potential issues that may cause a deal to fall through.
So, Why do deals fall apart?
The inspection uncovers significant issues
Once the offer is accepted, the buyer typically hires an inspector to conduct an inspection. The seller can fix most issues before the closing, or the seller can choose to give the buyer a credit at closing to make the repairs independently.
However, sometimes the problems can be too substantial, causing the buyer to walk away from the deal. The seller may also decline to make or pay for the repairs, which can also cause the house to fall out of contract.
The house doesn’t appraise
A mortgage lender will require a home appraisal before the loan is secured. However, if the home’s appraisal is lower than the purchase price, the seller will either need to lower the sale price or, if the buyer still wants the house, will need to pay the diﬀerence in cash. However, if either party won’t compromise, the seller or buyer may walk away from the contract.
The mortgage falls through
The real estate transaction isn’t complete until the closing documents are signed. Even after the inspection and appraisal are completed, the ﬁnancing needs to go through before both parties can sign the closing documents. Income discrepancies, failure to pay taxes, tax fraud, job loss, signiﬁcant credit score changes, and other ﬁnancial diﬀerences can cause the mortgage lender to rescind ﬁnancing.
The buyer’s house won’t sell
Some buyers are unable to buy a house without selling their home ﬁrst. If the buyer outlines in the contract that their ability to purchase is contingent on the sale of their house and that house doesn’t sell, the buyers may need to walk away from the transaction.
The buyer or seller changes their mind
If either the buyer or seller gets cold feet or has a change of heart at the last minute, the house might fall out of contract. This is also considered a breach of contract. If the buyer backs out, they will lose the escrow money. If either party backs out, the other can sue for damages.
Selling or buying a house is a multifaceted process that can be overwhelming if not handled with the patience, knowledge, and care that it deserves. My years of experience in this market will help make your home journey smooth and stress free. Reach out to me for a free consultation today and profit from my expertise.