Special offer

Why Do Deals Fall Apart?

By
Real Estate Agent with KW Elite

real estate deals

Keeping Current Matters had an interesting article (original post here) listing their top 5 resons real estate
deals fall apart. Deals not making it to closing is much more common these days and here is their list of why:

    1. Short Sales – In theory, they sound terrific because the buyer can low-ball an offer. They get little resistance from the seller (because the seller isn’t getting any money out of the deal anyway). However, the existing lender isn’t just accepting any offer. Appraisals are done and scrutinized. Lenders are not agreeing to deep discounts. Additionally, the lenders are still, in many cases, taking months to make decisions and many buyers are losing patience and withdrawing offers (and finding another house).
    2. Appraisal Issues – It seems that there are more appraisals coming in short than has been the case historically . Conceptually the value of a home has been loosely defined as “what a reasonable buyer would pay to a reasonable seller”. With the market including so many “unreasonable” sellers (short sales, foreclosures, distressed situations, etc.), many of the comparables used for an appraisal are dragging the numbers lower than they should be.
    3. Title Challenges -  The analysis of Permits and Certificates of Occupancy are at an all time high. Judgments and liens are more prevalent amongst buyers and sellers. The complications on title are messing up and delaying deals.
    4. Poor Pre-Qualifications – Many deals were never really deals to begin with. Loan officers need to take more care in reviewing tax returns, pay stubs, bank statements, contracts, and such before issuing pre-approvals and taking in applications. Simply not seeing unreimbursed expenses on the tax returns can kill a loan.
    5. Unforeseen Circumstances – It seems there is an inordinate amount of unusual stuff coming up- buyers losing a job, credit challenges arising as a loan is in process, property damage, buyer’s remorse. Everyday seems to bring a new one.
Has this been your experience lately? It's important in this market to make sure buyers and sellers know that the deal is not done until you walk away from the settlement table with keys/check in hand. Clients who assume they have a sure thing just because they have a signed agreement can be hugely disappointed if their realtor doesn't prepare them for possible pitfalls. 

Posted by

 

Michael J. Perry

KELLER WILLIAMS Elite

www.lancaster4sale.com  

 

1280 Plaza Blvd. , Lancaster, PA 17601

   facebook  Google me  Find us on Google+

Longtime West Lampeter resident and Lancaster County Realtor!

SUBSCRIBE TO MY BLOG VIA EMAIL

Enter your email address:

Delivered by FeedBurner

Comments (4)

Pat Champion
John Roberts Realty - Eustis, FL
Call the "CHAMPION" for all your real estate needs

Well written post; unfortunately, there are some things that can happen to a transcation and all parties need to be prepared.

Jun 12, 2012 05:03 AM
Ernie Steele
Lebanon, PA

All good points Michael...We have to keep track of everything just a little closer these days...Enjoy your day.

Jun 12, 2012 05:29 AM
Cal Yoder
Keller Williams Elite - Lititz, PA
Homes For Sale in Lancaster PA - 717.413.0744

Excellent points and thanks for sharing from an obviously informative article. Have a great evening.

Cal

Jun 12, 2012 11:24 AM
Joe Ulrich
Prudential Homesale Services Group - Elizabethtown, PA

Good article, thanks Mike.  #4 should not even be an issue today!!

Jun 13, 2012 02:59 AM