On my last meeting with a seller, I was asked what could go wrong with the process of selling their home so I wanted to write down a few of the most commons issues in a real estate transaction.
As a buyer or seller you have to realize that not every deal is going to go smooth and could possibly not make it to the closing date. There are many ways that the transaction could go wrong and it may be the fault of the real estate professionals, the mortgage professionals, the buyers, the sellers or a combination of them all.
Let’s look at a few of those issues;
Real estate agent is not organized: The real estate agent needs to follow up with other professionals involved in the deal. These professionals could be the attorneys, home inspectors, appraisal inspectors and mortgage brokers. An organized and competent real estate agent will make sure to follow up with attorneys to make sure all documents are being reviewed on time. The agent needs to be able to negotiate through inspections and appraisals.
An interested buyer puts in an offer but he/she has not been pre-approved for a mortgage: This could delayed the transaction and in many cases the buyer finds out that he/she can’t afford the property. This is why is important to get a pre-approval from a reputable bank or mortgage broker. A seller would be wise to prioritize offers from buyers with a strong pre-approval letter.
The inspection report is showing many issues with the home: Some buyers have high expectations on the home and when they receive all the findings on the inspection report they may want to cancel the deal. All houses has problems and every house is right for the right person at the right price. A Home inspector is doing his job to report everything he sees wrong with the house but he should also need to have a conversation with the buyer and explain all the issues. The real estate agent should also be trained to have that conversation with the buyer and point out the positive features of the house.
Bank appraisals issues: For a buyer who is looking to get a loan then the bank appraisal should be in line with the bank guidelines. Many times the seller and buyer will come into an agreement if the appraisal is too low and within a couple of thousands dollars.
Issues with closing documents: Just before closing, there are many documents that need to be reviewed by the buyer, the seller and the banks attorney. Some issues with the documents may be with the title of the property and these need to be resolved before the closing. Some of the issues could be a outstanding liens, bankruptcies and/or public record errors.
It is important to know that real estate deals can fall through. Some of these issues are controllable and as a seller or buyer of a property you should set realistic expectations.
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