A home sale falling through is an unfortunate occurrence when it comes to selling real estate. The seller’s been anticipating the ability to move on and the buyer is anxiously waiting to move into their new home. Then something happens that causes the deal to go south and the deal is off. Now the seller’s upset that they need to market their property again and the buyer (who’s probably upset) has to find another home. So what are some of the biggest reasons for these problems to arise?

1.  Home Inspection

If you look at the reasons coming out of the office, the highest percentage is occurring after the home inspection. The buyer and seller just can’t come to an agreement on what should be repaired or a dollar amount to make the buyer “whole”. A home inspection, despite what some people believe, is not a way for you to get a “second bite of the apple”. As a buyer, it’s a way for you to know what you’re getting with your new home and if a “major defect” is discovered, come to an agreement with the seller on getting it fixed. A major defect is a failed septic test or a a/c isn’t working. It’s not the little things that are considered normal household repairs when owning a home, like replacing a switch plate or a light bulb.

As a seller, one of the best ways to avoid this pitfall is to get a pre-listing inspection, so you can get these major items repaired before the house is listed.  Then give a copy of the summary pages to potential buyers along with a notation of items that were repaired.

2.  Mortgage

The next highest percentage, would be financing issues with the mortgage.  Buyer’s making offers they shouldn’t make because a mortgage broker gave them a “deal”, is one of the main causes for this.  As a buyer, make sure you are dealing with a reputable company. “Joe’s Garage and Mortgages” is probably someone you should avoid. Make sure you receive a full disclosure on fees (it’s required as part of “Truth in Lending”).  Look for fees regarding pre-payment penalties (avoid) or any other extra fees you’re unsure about.  Get clarification before you sign on the dotted line and/or get a second opinion from another lender.

As a seller require a pre-approval is from a legitimate lender.  You can ask the buyer to get their loan reviewed by another lender, especially if you’re not sure if the lender is legitimate.  Believe it or not, even with the turmoil and tightening in the lending industry, there are still lenders who will give financing options that can’t be realized.

3. Other

There are a myriad of reasons for this category.  You can lump home sale contingencies and buyer’s remorse to this category.  Home sale contingencies, unfortunately, don’t always work out.  There’s a lot happening in these situations.  You have two homes that need to sell in a row.  As a seller, you may not be in a position to accept a contingency like this (relocation or time), but if you can you’ll want to see that the buyer’s home is being marketed already and that it’s not sitting with no showings.  On the buyer side (as the seller), make sure your home is being marketed for the greatest exposure.  If you’re not getting showings, something is wrong.
Buyer’s remorse can occur for many reasons.  Some of them, just can’t be put into words.  After the initial shock that the buyer has come to an agreement, remorse from making a large purchase sometimes occurs.  Agents do what they can to allay these fears/questions, it just doesn’t always work out.  While, as a seller, you can (and probably should) hold these buyers to their decision, it may be too time-consuming and/or costly to go through mediation or legal means.

Another reason, for those sellers in a Home Owner’s or Condo association can find the buyer doesn’t like something in the documents.  They’re may be a provision that the buyer finds that they just can’t comply.  It could be the inablility to store certain vehicles, work on vehicles, or a myriad of other reasons contained in these sometimes large documents and the buyer has the right not to accept them.  As a seller, there’s not much you can do about this as some people just can’t meet the conditions in HOA’s and Condominiums.

Hopefully, there’s some pitfalls and workarounds contained in this post whether you’re buying or selling.  More questions?  Just add a comment below or use the contact information in the sidebar if you have a question of a more personal nature.

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