The Biggest Causes of Home Real Estate Delays and Contract Terminations
[et_pb_section][et_pb_row][et_pb_column type="1_4"][et_pb_image admin_label="Image" src="http://www.christinekipp.com/wp-content/uploads/2016/02/ck-side-pic.jpg" show_in_lightbox="off" url_new_window="off" animation="left" sticky="off" align="left" force_fullwidth="off" always_center_on_mobile="on" use_border_color="off" border_color="#ffffff" border_style="solid" /][/et_pb_column][et_pb_column type="3_4"][et_pb_text admin_label="Text" background_layout="light" text_orientation="left" use_border_color="off" border_color="#ffffff" border_style="solid"] Our PrePurchase Client meetings pinpoint the biggest causes of home real-estate delays and contract terminations. A young couple recently sought our help to purchase their first home. As they said they wanted someone who understands the Millennial point of view I knew the first order of business was to prepare them, provide information and get them involved. What a great meeting we had, two hours talking about contract law, fundamentals of real estate value, financing and inspections.
The big three issues discussed by the Seattle Times and in our client meeting were these: Buyer-financing setbacks, home-inspection issues and appraisals that diverge from the agreed upon contract price.
According to the study, of the 32 percent that experienced delays, 46 percent were triggered by “financing issues,” which is up from 40 percent during the first half of 2015.
Appraisal-related problems caused delays in 21 percent of transactions and home-inspection issues in 14 percent. Of the nearly one of every 16 (6 percent) of deals that turned into total disasters and fell through, home inspection and financing were the primary culprits. Sixteen percent went south because of the appraisal.
Here’s a quick look at each.
We know that financing falls apart for myriad reasons, some of them readily preventable. For example, credit scores can change between loan approval and closing — enough to render the would-be buyer ineligible for the mortgage. Our clients are warned not to incur any additional credit during this period — no new-car purchases, no new furniture on credit, no new credit activity whatsoever.
Debt-to-income ratios also can change when an underwriter discovers that a buyer failed to disclose continuing payment obligations such as child support and no longer has acceptable debt ratios. We advise our clients spend ample time to tell the loan officer everything at application, and avoid new debt or anything that could affect qualifying income like changing employer.
Home inspections are another quicksand pit. When an inspector finds defects in the property under contract, things can get tricky. Will the seller make the repairs before closing, cut the price or set aside escrowed funds to cover the costs? Are the problems found by the inspector as serious or expensive as the inspector alleges? Our reviewing these questions and other issues ahead of time will allow us to focus on the property when the time comes instead of the emotion and surprise that something is not perfect.
Our goal us always to make the real estate purchase as smooth and successful as possible as we anticipate possible pitfalls and advise around them.
Call is you are considering a purchase or if selling and you hope for a seamless transaction!