Create a FREE account and access new features!   →

9 Reasons Why Your Contract May Not Close



Getting a signed contract is only half the home buying battle. See what agents say are the top reasons why contracts fall through & how to avoid them.

Congratulations, your offer has been accepted and you're now under contract. The hard part of the home buying process is behind you, right?

Wrong. Finding the right home and getting under contract is just half the battle. There are plenty of things left on your plate before you can start signing the final papers. Unfortunately, many issues can arise along the way which could keep your contract from getting to the closing table.

Recently, real estate professional gave us insight on the top reasons that real estate contracts fall through and how buyers can avoid these issues before they happen.


Top Reasons for a Contract to Fall Through

Appraisals

"Nowadays appraisals are a common villain. Declining markets make appraisers very conservative.
Then there are the new regulations enacted a couple of years ago which has resulted in unqualified appraisers producing lousy appraisals. The best way to avoid this problem is to pick a good local lender who utilizes a good local appraiser. And, of course, understand the value of the property you're
buying to be sure you're not overpaying."

Michael Byrd
Broker
SLO Home Store

 

"Appraisals - appraisers are taken into areas they know nothing about, therefore, the appraisal is not realistic."

Jim Fite
President/CEO
CENTURY 21 Judge Fite Company


"The top current reason contracts fall through are appraisals. To avoid this, make sure you are buying on true market value and not emotion. Inspections are also key."

Melissa Rubin
Broker
Platinum Properties International 

 

Paperwork Problems

Contracts fall through because, "buyers often don't have their paperwork ready. Sometimes they look for a home to purchase, find the "perfect" home, but are not in a position to make an offer because they didn't take the time to prepare and get a pre-approval. Sometimes they have the pre-approval but do not have all their tax returns and other documents ready. When they make their offer, delays then occur because the lender cannot obtain underwriting approval pending receipt of the paperwork."

Monique Bryher
Broker-associate/Realtor®
Pinnacle Estate Properties


"One big reason is lack of documentation and verification at the start. Many deals go into contract even before credit, assets or source of funds are checked."

Dan Desmond
Broker, Owner
Help-U-Sell Bay Beach Realty

 

Nickel and Diming in Negotiations

"Even though this is a "buyer's market," some buyers get overly confident and kill their own transaction. This is by either low-balling the seller or making excessive and/or puffed-up estimates for repairs or repair credits. The best strategy to make a sale work is to take the position of being fair to the seller and act in good faith."

Monique Bryher
Broker-associate/Realtor®
Pinnacle Estate Properties

 

"In a buyers’ market where the buyers truly have the luxury of choice, if something less than desirable arises during the inspection process and they attempt without success to get the seller to agree to concessions or repair allowances etc., they simply cancel the contract and seek another home."  

Dameon V. Russell
Dir. Business Systems
MAE Capital Mortgage

 

"Because it is a buyer's market, the buyer wants more from sellers than in the past - buyers and sellers reach an impasse and the transaction terminates."

Jim Fite
President/CEO 
CENTURY 21 Judge Fite Company

 

"I have seen contracts fall through for a number of reasons. First, sellers are emotionally attached to their home - they do not see the sale as a business transaction in which they are selling a "thing." So can be inflexible (and take it personally) to adjust the selling price even by a small amount."

Craig Delsack, Esq
Law Offices of Craig Delsack, LLC

 

"Contracts often fall through when buyers and sellers, "Nickle and dime each other- I always tell my buyer to put their best foot forward. The more back and forth there is with price, the greater the chances are for the deal to fall apart.

Changing terms in the middle of contract- This is a turn off for both parties of any transaction when it happens to them. Sellers may say, they would rather not sell their home to buyers and pull out; or buyers will say, they will be able to find a better home somewhere else."

Jennifer A. Chiongbian
SVP/ Licensed Associate Broker
Rutenberg Realty

 

Continue to Page 2