Buying or selling residential real estate can take months. Even in a competitive market, sellers have to wait for people to view their house, look over offers and then schedule a closing. Buyers may have to compete with dozens of other offers on homes before they make a successful offer on a property.
Reaching a purchase agreement does not necessarily mean that the transaction will go through without issue. Both buyers and sellers sometimes cancel real estate transactions before closing. What are some of the most common reasons real estate transactions fall through?
The seller can’t find a new home
Many people sell their current homes because they want to upgrade to a bigger space as their children grow or move into something smaller when they retire. If a seller cannot find the right property to buy after accepting an offer, they may seek to cancel or delay the closing on the property.
The appraisal comes back lowe
Buyers usually rely on mortgages for real estate purchases. As prices go up, getting a mortgage can be more difficult. Lenders expect the appraisal to show that the home is really worth the amount that they finance. If the appraisal comes in too low, the closing could fall through.
An inspection or walkthrough turns up significant issues
Buyers will usually have a professional inspector check out the various systems in the home before closing. Since the seller may continue to live in the house for weeks after they make the offer, the buyers may want to walk through the home right before the closing. If an inspector discovers undisclosed issues or if the seller causes major damage to the house before closing, the buyer may try to walk away.
Properly protecting yourself when attempting a real estate transaction will mean that you will only suffer frustration — not financial losses — if the transaction falls through.