Here are the primary reasons home sales fall through.
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How often do real estate transactions fall through? Not very often, but it has been happening more frequently as of late than in past years, and there are three reasons why.
First, buyers have been acting too quickly. Inventory is tight, so they feel the pressure to get a home under contract quickly, but they end up changing their mind just a couple days later. To prevent this from happening to your home sale, here are some helpful questions to ask potential buyers to get an idea of whether they can make it all the way to closing:
1. Have they just started looking at homes?
2. Is this the first house they’ve made an offer on?
3. Have they missed out on other houses?
Second, appraisals are coming up short. While we may be seeing record prices for homes and buyers more than willing to pay those prices, appraisals occasionally come back below the agreed-upon sale price. If you don’t want to get caught with a low appraisal, look at what other homes in your area have sold for the type of mortgage loan the buyer is using. A VA loan appraisal, for example, has different requirements than a conventional loan appraisal. Check to see whether you have the comps to support your asking price. Even though a buyer may be willing to pay that price, it might be hard for the home to appraise at that value. You need to really evaluate each offer and weigh its benefits; the one with the highest price isn’t necessarily the best.
Third, emotions are running high. It’s not unusual for emotions to run high when people buy a home. After all, it’s probably the largest investment they’ll ever make. This means that sometimes buyers pull the plug at the very end of the contract period just because the situation has become so stressful.
As a seller, do the best you can to be ready for these kinds of obstacles to pop up. At Shannon Rollings Real Estate, we do our best to ensure buyers and sellers are on the same page and prevent problems from arising down the road. If you have any questions about buying or selling a home, my team and I are on standby seven days a week, 9 a.m., to 8 p.m., ready to assist you!