It can be discouraging when a home sale doesn’t go through as planned. You might get ready to pop open the champagne as soon as you receive an offer. But, an offer doesn’t always become a sale. According to Realtor.com, the average time from offer to close is around 50 days, and a lot can happen while you wait.
This post walks you through the top reasons why a home sale doesn’t go through as planned. We also share strategies that help you stay entirely prepared to avoid any possible mishaps and complete the sale as planned.
Top Reasons Why Home Sales Fail
The Buyer’s Mortgage Fails to Go Through
Most homebuyers contact a lender to get pre-approval for a mortgage before they start house hunting. However, pre-approval doesn’t mean they are guaranteed a loan. For example, if the buyer’s financial situation changes and they lose their job or acquire more debt, the mortgage loan may not go through.
How to prevent this: To avoid this situation, ensure that you vet the buyer thoroughly before you accept their offer. Look at their financial situation and evaluate whether they have strong finances to complete it.
Issues Uncovered During Home Inspection
Generally, buyers do a professional home inspection before completing the sale. If any significant issues are uncovered during the home inspection, the buyer is likely to renegotiate the offer or even withdraw the offer altogether.
How to prevent this: The best option is to disclose all issues to the buyer upfront to avoid last-minute withdrawals of buyer offers. This way, the buyer knows what they are in for and are not likely to pull out at the last minute.
Inexperienced Buyer
First-time buyers run through several challenges. They’re likely to have a short credit history, and their mortgage application goes through additional scrutiny. First-time buyers are also more likely to have second thoughts, and they usually overestimate how much they can afford.
How to avoid this: As mentioned above, you must evaluate buyer offers carefully to avoid ending up with buyers who aren’t serious about the sale.
Low Appraisal
Before lenders approve the buyer’s mortgage, they usually appraise the home to ensure its value is consistent with the sale price. If the appraised value is lower than the selling price, the bank denies the mortgage.
How to prevent this: Low appraisals usually occur in a seller’s market where the inventory is low, driving up selling prices. If this happens, you need to ensure that the buyer has sufficient cash reserves to pay up the difference using cash.
The Buyer Gets Cold Feet
Buying a home is a big decision, and sometimes buyers back out at the last minute. Generally, most buyer offers have a contingency period to withdraw their offer without facing any penalties. Usually, inexperienced buyers or those simultaneously courting multiple properties are likely to cancel their bids at the last minute.
How to prevent this: You can avoid this by requesting earnest money from buyers. If the buyer walks out of the sale at the last minute, they lose their deposit. As a result, only serious buyers come up with offers.
Ensure That the Sale Is Complete
There’s no doubt that buying or selling a home is complicated. As a seller, you need to take all the steps possible to ensure that the sale goes through smoothly. If you’re looking to sell a house fast in Billings, MT, the easiest option is to sell it for cash. Cash home buyers in Billings, MT, evaluate your house and give a free cash offer. If the offer interests you, you can complete the sale within a month.