Whether you are selling or buying a house, you are not immune to possible pitfalls in real estate transactions including delays and contract terminations.
According to The Real Deal, about 2,643 agents conducted an internal survey in December and found out the biggest causes of delays and contract terminations in home real estate. In fact, 32 percent of all real estate transactions encountered delays as per the National Association of Realtors.
Yet, these pitfalls are something that you can get rid of when detected earlier. So, in order to prevent your real estate from these possible drawbacks, it's wiser to know and understand the causes.
The buyer's financial limitations
Of the 32 percent delays, 46 percent were due to "financing issues." This percentage has even become higher compared to the 40 percent in the first two quarters of 2015. Being transparent right from the start of the deal is a must to avoid any pitfalls along the way. Incurring any additional credit should be avoided, or at least inform the agent. Whitney Watson, a loan officer for First Heritage Mortgage in Glen Allen, Virginia, said real estate financing falls apart for a lot of reasons yet some of them are preventable.
"Tell your loan officer everything at application," and avoid new debt or anything that could affect your qualifying income like changing your employment," Watson advised.
The seller's lack of commitment
You cannot control the minds of the client or anyone in the real estate industry. Backing out happens. If there are justifiable reasons for backing out, contingencies can be waived to an extent. Yet, according to Investopedia, if the seller simply has a change of heart or has received another better offer, you have the legal right to let the seller pay for the damages.
Home inspection concerns
Some delays take place based on the results of home inspections. Of course, nobody wants to close a deal with a property that has some serious defects. According to The Real Deal, things can get tricky when the inspector finds defects in the property. The buyer may demand something, for example, major repairs, before he pursues your offer, which can surely cause a delay. But if you don't want to negotiate regarding repairs, your buyer might decide to just cancel the deal.