There are many reasons why Eagle Idaho home sales fall through!
Here are 10 common reasons why Eagle Idaho home sales fail.
1) Financing Issues
Amazingly, some buyers make offers on homes without first securing “Pre-Approved” financing.
“Pre-Approved” means the buyer has a firm, underwritten loan commitment letter, subject only to clear title and an appraisal.
“Pre-Qualification” is not synonymous with “Pre-Approved” and can often be obtained with a phone call, no vetting, and no documentation.
Pre-qual letters are easy to spot because they include numerous conditions to be met during underwriting.
Those conditions often include bothersome little details like credit scores, remaining employed until closing, and proof of funds needed to close escrow.
2) Inspection Issues
There are at least two sales in every real estate transaction.
The easy sale is the first one, where you negotiate the purchase/sale of the home.
The hard one is the second one, where the buyer and seller negotiate repairs requested by the buyer following inspections.
If buyer and seller disagree on making needed repairs, the sale can go bye-bye.
3) Buyer’s Remorse
In a hot market, buyers sometimes figure out they overpaid after their offer is accepted.
That can lead to the buyer using legitimate contingencies (think inspection contingency) to terminate the transaction and get their earnest money back.
When a buyer backs out due to a valid contingency, there’s little a seller can do about it.
4) Seller’s Remorse
It’s more difficult for a seller to back out of a deal, but it can happen.
When a seller refuses to close while lacking good reason, the buyer’s recourse may be to sue the seller for specific performance.
Considering legal fees and court costs, most buyers quickly realize that finding another home is a better alternative than suing a seller.
5) Third-Party Influences
Third-party influences are not a good thing in real estate deals.
Closing isn’t assured when it’s contingent upon the approval of someone’s attorney, CPA, or a governmental agency.
Worse yet is a sale that’s contingent upon the buyer’s funds to close coming from Aunt Mildred’s probate or an insurance settlement.
6) Incompetent/Inexperienced/Part-Time Agents
I’ve always thought that it takes about 100 closed transactions for new agents until they understand how the real estate profession really works.
If you’re working with a new agent who’s undergoing OJT (at your expense), plan on things like unanswered phone calls, ignored voicemails and e-mails, incomplete contracts, missed deadlines, and other deal-killers.
BTW: It doesn’t cost any more to work with an experienced, competent professional!
7) Insurance Issues
Insurance companies have become picky about who and what they insure.
Recent paid claims often make it difficult, if not impossible, for buyers to arrange insurance.
Water damage claims are especially sensitive issues with most insurance companies.
Mortgage lenders require insurance, so no insurance means no loan and no closing unless it’s an all cash deal.
Cash buyers will want insurance too and probably be unwilling to close escrow if they can’t get it at a reasonable cost.
8) Appraisal Issues
Mortgage lenders require an appraisal as part of providing a loan.
The purpose of the appraisal is to confirm that the value of the property is adequate for the intended mortgage.
Appraisals are “opinions of value” that are prepared by human beings and can be very subjective.
When a home fails to appraise for the sales price, the buyer will probably ask the seller to adjust the sales price to the appraised value.
If the seller refuses to do so, the buyer’s alternative is to pay the difference in cash at closing.
That probably won’t work unless you’re in a red hot seller’s market.
A lien is an obligation to pay someone.
Liens can kill deals because they must be paid to get title insurance that’s required for closing.
Lenders won’t loan on properties with unpaid liens.
Buyers won’t buy a home with an unpaid lien on it because the lien is secured by the property.
That means liens must be paid in order to close escrow.
If the seller doesn’t have enough equity to pay off the lien, escrow will not close.
An easement gives a third party rights of use for the subject property.
Most buyers want full use of the property they’re buying.
Both buyers and sellers should review the preliminary title report carefully to see if there are any easements that will affect rights of use for the property.
It’s critically-important for everyone to understand all easements early in a transaction.