Why do home sales sometimes fall through? There are actually a few reasons, both emotional and financial. For example, buyers might become overwhelmed during the process and back out of the contract. The appraisal might come back low, and there might not be extra money to bring to the table. To learn all the reasons a home sale can fall through and how you can prevent them as a buyer or seller, watch this short video.

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Todd Martin
Real Estate Agent
RE/MAX Metro
2200 Dundee Road
Louisville, KY 40205
Call - (502) 220-4663
toddmartin@realtor.com

TRANSCRIPTION:

A home sale is a complicated process, and sometimes pending sales fall through. This can happen for a couple of reasons.

The first is seller’s remorse, but that hardly ever happens.

It’s more likely to run into buyer’s remorse. A lot of times, buyers rush into a sale before they’re ready, so they will actually withdraw themselves from the contract. That’s why it is so important to have an experienced agent working with you to buy a home. An agent will recognize the signs associated with cold feet, and will be able to talk you through your issues in order to go through with the purchase with confidence. After all, you don’t want to regret letting your dream home slip away.

Additionally, whenever a buyer purchases a property, they have the opportunity to do a home inspection. If the inspection turns up issues that the buyer doesn’t want to deal with and the seller will not fix, the buyer usually walks away from the sale. Make sure as a buyer you understand what you should ask for from the seller. Sometimes buyers get scared and make demands that are unreasonable based on the home inspection. Have the inspector go over things with you to explain what is or isn’t worth asking the seller to fix.

When both parties are willing to work with an agreed upon price but the appraisal comes back low, people sometimes back out because they don’t want to bring that extra money to the closing. When the appraisal is low, many times a new appraiser is asked to give another appraisal, the difference is paid in cash, or the seller drops their price. There are ways to work around a low appraisal, but it doesn’t always work out. Be proactive by having an agent provide a list of comparables, and make sure they are good negotiators just in case.

Some contracts are also built on a contingency, which means the seller has to wait until the buyer sells their current home before they can close on the new one. If the buyer fails to sell their current home, they are let out of the contract with the seller. Most people can’t afford to pay two mortgages at once, so this a good option if you are prepared and the seller accepts. Look into getting a bridge loan, or try to establish a home equity line of credit before listing your current home.

The last issue that can come up is a loan rejection. There is a difference between getting pre-qualified and being pre-approved. Once the lender gives the information to the title company, they might find a lien no one was aware of and deny the loan. That’s why it is so important that you keep your spending patterns normal during the approval process. If you take out any other sort of loan during that time, your loan may be denied because of impulse financing.

If you have any questions you’d like answered in a video, feel free to send them via email or through Facebook.

If you have any other real estate questions or are looking to buy, sell, or invest, feel free to give me a call or send me an email. I’m always here to help!

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