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3 Areas Where Home Transactions Fall Apart
The buyers are excited. They are under contract on a hew home. The sellers are excited. Their home on the market has a buyer. The contract has been signed. Time to celebrate right? Not exactly. These 3 areas are common reasons home transactions fall apart and a home comes back on the market.
1. Inspection. Usually within 7-10 days after going under contract, buyers will get a home inspection. A general home inspector will look at everything from the roof to the furnace to windows and look for deficiencies through the entire home. More detailed inspections will include radon, sewer scopes, structural inspections, and well and septic inspections if applicable. Any one of these inspections can lead to buyers finding out about unknown problems with a home. As a buyer, they are investments to make sure there aren't unexpected hidden costs (sometimes substantial) after the buyer purchases the home. Once all inspections are completed, buyers will make a list of objections. Typically, buyers and sellers can agree to resolve these inspection items. Many times however they cannot. The transaction will be cancelled and the home back on the market for both the buyers and sellers to start over.
2. Appraisal. Typically about 3-4 weeks after going under contract, an appraiser will conduct an assessment on the value of the home. Most contracts have clauses for conventional loans and any buyer with an FHA or VA loan does not need to purchase the home if the price offered is lower than the appraised value. Buyers and sellers can renegotiate, and often do, but sometimes this hurdle is too much to overcome. With accelerating prices in a serious seller's market like Denver, buyers often waive the ability to back out based on the appraisal and will state that they will bring in cash to offset the amount the lender is willing to loan if the appraisal comes in "low."
3. Buyer financing. Perhaps the cruelest of reasons for both buyers and sellers. The home has been on the market for 4 or 5 weeks. It might be a week or less from closing. Something falls apart and the buyers cannot get their funding. Sellers try to avoid this type of scenario at all costs by seeing pre-approval letters stating that the buyers are qualified to purchase the home. But, even still, these situations happen. It is frustrating as the home has been off the market for a long time and everything has to start over -- for both buyers and sellers.
Getting under contract on a home is a step in the right direction, but the sign of relief doesn't really come until keys are in hand for the buyers and the sellers have their check.
Denver Colorado area real estate -- Darrick Kizlyk -- Realtor at EXIT Realty DenverTech Center and EXIT Realty Pikes Peak. Darrick Kizlyk is your relocation expert using his training in education, geography, and real estate for Denver, Colorado Springs, and the southern bedroom communities of Parker, Castle Rock, Larkspur, and Monument. Call me for all your sales needs or let me get you into the house of your dreams! Darrick Kizlyk 719-360-3935
With 12 years in public education as a teacher and 3 years as a Realtor, I bring that background to help educate home buyers and sellers along the Front Range from Denver to Colorado Springs and up th....
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