As a seller, accepting an offer on your property is only the next step in the process, not the end of the home sale procedure. After all, numerous issues can arise between when you notify the buyer’s agent that you have accepted their offer and when you schedule the closing to sign the actual deeds and mortgage paperwork.
While you should move forward with the transaction in good faith, assuming that it will close as it should, you also need to protect yourself to minimize any hardship or financial losses you might incur if the closing does not go through as planned. What are some of the top reasons that people cancel real estate transactions after making a successful offer?
Issues with the inspection
You may not even know about a defect that turns up in the inspection because you have never looked closely at the foundation of your home or didn’t realize that the wiring in your HVAC system is outdated and dangerous.
Buyers may sometimes try to leverage inspection issues to demand either that the seller make repairs to the property or accept a lower sale price. When sellers and buyers can’t work out a solution for unexpected issues during the inspection, the closing may not occur.
Problems with financing
Maybe the buyer unexpectedly lost their job, or perhaps they made an offer that was at the upper end of their mortgage, and the lender has now only approved them for less than that amount. Financing issues can completely derail a real estate transaction, as the average buyer is not capable of completing a transaction without financing.
Changes in the market
The real estate market constantly adjusts to social and economic factors. Prices go up, and then they come back down. Although they tend to trend upward over time, sometimes the market can soften significantly with little warning. When an appraisal comes in low for the property or when the local market sees a correction before closing, the buyer or their lender may no longer want to move forward with the transaction.
Many of these potential issues can force you to relist the property and start the process over again. If there are contingencies in the offer, you may not have the right to retain the earnest money despite the property not going forward to closing. Understanding and preparing for possible pre-closing challenges can help those trying to complete a residential real estate transaction.