You just listed your house on the market, and you couldn’t be more excited.
You spruced the place up
Did everything your agent said
And now you await the flood of offers
It only takes a few days until you receive an offer you’re happy with, and you accept it.
But is it a done deal? Not quite.
Even after getting your house under contract, several things may cause the sale to fall through.
Let’s discuss exactly what they are and what you can do to prevent them from happening to you.
The Buyer Orders An Inspection And Doesn’t Like The Results
A common reason pending home sales fall through is because of the inspection.
Almost every traditional buyer will order a home inspection, and they should. It helps ensure they’re buying a safe and reliable house for their family.
Inspection reports are designed to cite everything the inspector sees as a potential issue.
Potential code violations
Issues with critical systems like plumbing and electrical
Or roofing and structural concerns
An inspection report can be over 20 pages worth of things wrong with a property.
Let’s remember that every home is going to have issues turn up on the inspection report.
No house is perfect.
It’s up to the buyer to decide what, if any, repairs they want you to make to the house before closing, or they can pull out of the deal if they have an inspection contingency included in the contract.
Should buyers want to move forward despite the inspection results, they have three options.
Request you perform some repairs
Ask you for a price reduction/concession based on the inspection report
Maybe they won’t ask for anything. But asking for nothing is unlikely
Depending on what the buyers want, you’ll have to make sure you negotiate with them, so they are happy and comfortable moving forward.
What Can You Do? Get a pre-home inspection and ask your realtor what you should address.
Then share the pre-inspection with your buyers, along with any documentation that proves what you’ve fixed.
Your house Doesn’t Appraise For The Contract Price
Another reason your house might not sell is if it fails to appraise at or above the contract price.
In an ideal world, everyone would be rational and set their property’s price to match the current market.
Except we don’t live in an ideal world, and sometimes one of two things can happen.
You have a listing price in mind and insist your agent lists at that particular price despite their warnings
Your listing agent isn’t familiar with the market and lists your house too high
In a scenario where your house has been listed above the market, you may have to deal with an appraisal coming back below the contract price.
Let’s say, based on the market, your house is worth no more than $500,000, but you or your agent insisted on listing it at $525,000.
Every buyer using a lender to finance a property is required to get an appraisal, and banks will not lend out more than the appraised value of a home.
In our hypothetical scenario, the bank orders an appraisal, and it comes back at $500,000.
$25,000 short of your contract price.
At this point, you’ve got a few options:
Reduce the price to match the appraised value
The buyer can make up the difference with their down payment
You could carry a second mortgage for the difference
The home sale could fall through entirely
At this point, it’s up to you and your buyer to decide how to move forward.
What can you do? Do your research into what comparable properties have sold for in your neighborhood.
Make sure you’re working with an experienced agent who can give you an accurate price.
Last but not least, you can pay for an appraisal before listing the house.
Your Buyer’s Financing Falls Through
Unfortunately, your buyer’s financing may fall through when it comes time for them to move forward with securing a mortgage.
Your buyer's financing could fall through for several reasons:
Maybe their credit dropped
They may have suffered a loss of income
Or maybe they made a large purchase since going under contract and shredded their debt to income ratio
Hopefully, your buyers will be sensitive to their financial picture while buying a house, but life happens.
What You Can Do: Make sure your buyers are pre-qualified before accepting their offer.
You can also call the lender to discuss their pre-qualification if you want to be extra cautious.
You Reject All of The Offers, Despite Them Being Reasonable
For this point, the ball is totally in your court. So far, we’ve discussed what could happen based on your buyer, but now the tables have turned.
You may have a set price in your mind that you want to get, but sometimes, based on the market, it may be a pipe dream.
It’s important to remember that the market will always decide how much a house sells for.
You’ll never get $1,000,0000 for a house worth $100,000
A house worth $1,000,000 will never sell for $100,000
Revisiting our hypothetical house from above, let’s say your house is listed at $525,000, but every agent and buyer knows it’s not worth a penny more than $500,000.
You receive five solid offers, all between $490,000 and $500,000.
You reject them all.
In this scenario, the market has offered you the most amount of money it could for your house, but you declined.
What you can do: Make sure you have realistic expectations for what your house can sell for.
You don’t want to get in your way.
You Have Liens On The Property
If a property has liens attached to it, they have to be remedied first before the property can sell.
Liens can be attached to a property for a variety of reasons:
A mechanics lien can be placed on a property when a contractor performs work, and they are not paid
A lien may be placed on the property if you owe the city fees for code violations
Liens can even be attached to a property for failing to pay child support
Before you can sell a property, you’ll need to have the liens released from the property.
To have the liens released, all you should have to do is pay them.
A Buyer Includes A Home Contingency Sale, But Their House Doesn’t Sell
Home contingency sales can be useful for buyers, but terrible for sellers.
A home contingency sale simply states that a buyer’s offer is contingent on their house selling. If their house doesn’t sell by a certain date, they can back out of the contract.
Home sale contingencies are risky to sellers for so many reasons:
Your buyers may have priced their house incorrectly (too high)
It’s possible their house needs a lot of work, and many buyers will be scared away
Their home may sell, but it could be contingent on someone else’s house selling. It’s like house inception!
If you have multiple offers, I always feel it’s safe to accept an offer that does not include a home contingency clause, but sometimes that’s the best offer you have.
What you can do: Don’t accept offers with home contingency clauses if you can help it.
The Buyers Simply Get Cold Feet
No consumer industry and no product is free of buyer’s remorse.
Buyers are making a substantial financial commitment when buying a house. It’s a purchase that will affect their lives for years to come. Possibly even the rest of their lives.
Occasionally, buyers will simply get cold feet.
Maybe they’ll decide the schools aren’t the best choice for their kids
Perhaps they’ll realize they wanted a larger kitchen
Maybe they decided they want five kids instead of two, and now they need extra bedrooms
Unfortunately, there’s nothing you can do about this except hope they don’t get cold feet.
What you can do: Hope and pray.
You Decide To Pull Your House off The Market
Last but not least, maybe you decide you no longer wish to sell the property.
Selling your house may have become an enormous headache, and you no longer want to deal with it.
Or maybe you decided you’d prefer to turn the property into a rental.
If you decide to pull the property off the market because the whole process is nothing but a hassle, you should consider selling the property to a direct home buyer.
Consider Selling To A Direct Home Buyer Like Contenza Properties
Sometimes the best option to sell your property is to sell to a direct home buyer like Contenza Properties.
We buy houses in their as-is condition, so you never have to:
Do any repairs or maintenance
Stage the property
Pay us any fees or commissions
Deal with the other typical hassles of listing a property
If you’re ready to sell your house without the hassle, contact Contenza Properties using the simple form below.
About The Author
Jordan Reid founded Contenza Properties in April of 2018 to help homeowners solve their real estate problems quickly.
Since then, Jordan has helped multiple homeowners facing difficult situations such as divorce, property liens, and unwanted property inheritance.
Jordan believes in putting people first, and numbers second, which helps him reach the best possible solutions for the homeowners he works with.
Currently, Jordan and his team at Contenza Properties offer their professional home buying services in the San Francisco Bay Area, and Knoxville, Tennessee.
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