One would think in a real estate market beginning to pick up with sales increasing, more contracts would make it to a successful closing. Not true, according to Capital Economics 18% of signed purchase contracts on existing homes were cancelled from May through July of 2012 in the US. Although the rate is not as high for Key West real estate, an 8% increase from September, 2011 to September 2012, it is still a significant trend.
There have traditionally been a number of reasons that contracts don't close. There are repair issues revealed during the inspection period, inability to get insurance coverage due to condition of the property, appraisals not coming in at value and the most problematic, loan approval. These issues are still with us with two changes, lending requirements are stricter than ever. Many buyers find as they inch towards closing they are unable to get approval or major delays occur. Secondly because of limited inventory on the market many buyers jump on properties, get involved in "bidding wars”, win the bid and when the dust settles feel that they are paying too much for a house they are not really in love with. If you are selling a property, don't start packing until these issues are resolved and if you are buying make a clear plan of what suits your needs and falls within your budget before you hastily make an offer.
Comments(1)