In the HOT CRAZY Northern Virginia housing market as a home buyer or a home seller do you wonder Why the Real Estate Deals Fail? Why the home is back on the market? What went wrong with the real estate transaction that the house is back on the market.
Here are the top 5 reasons a Real Estate Deal Failed:
Buyer's Cold Feet: Considering the chaotic Fairfax, Loudoun & Prince William housing market many buyers are making decisions on the spot of buying a home. Sometimes a buyer will get cold feet and regret their impulsive buying decision. They may void the contract on HOA or condo documents.
Financing: Even though the interest rates are historically lowest we still have to face the facts of buyers' income, debt to income ratio, visa status, and other terms that could impact their loan qualification. Many of the lenders will generate a preliminary loan approval letter. Once the file goes through the underwriting lender may approve or add additional terms that may not favor buyers' decision to proceed with the contract. If financing contingency is in place buyers can void and a real estate deal will fail!
Appraisal: With the fast-moving market buyers are adding an escalation addendum to win that DREAM home! Sometimes the escalations are way over the market value of the home. If the appraisal comes in short the purchaser has to come up with the difference or if there is an appraisal contingency in place buyer & seller may renegotiate. In the current housing market place, we are seeing contract getting voided if the appraisal comes out short. Sellers do not want to renegotiate the contract price.
Buyer's Default: With COVID19 we have seen where buyers have done everything to keep the deal together however, life is too short. If the buyer's employment status changes or makes a major purchase or does anything that impacts the lender's decision to fund the loan the deal can fail at the closing table. Lenders will reconfirm their employment status prior to the day of the closing before they will fund the loan. If you are home Fairfax & Loudoun county home buyers don't do anything until you have keys to the home on the day of the closing.
Seller's Default: You would wonder why a seller would default on the home if they were on the market to sell. However, 17 years of my Northern Virginia real estate career I have seen a decent number of sellers default. A messy divorce situation has been my number one reason for the seller's default. Under the Northern Virginia sales contract, sellers have the least outs from the contract over the buyers. Sellers get cold feet or they think they have underpriced or undersold the home. They will do everything to retain the home and some extreme cases default at closing.
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