Often times, contracts fall through on a home. To save everyone time and energy, the following tips can help avoid these situations. Through we can not prevent everything and things are not perfect, this list is helpful for both clients and realtors to check into at the beginning of a real estate transaction and before even going to look at homes.
- Beliefs - It is not uncommon for clients to have certain beliefs about houses. This includes the direction a home is facing, the aura, and Feng Shui. I once had a client that loved everything about a home, but the roof was shaped in an upside down V style and according to Feng Shui, this is a bad thing.
- Flood insurance - I've seen great homes in a beautiful location, but additional flood insurance per year will turn people away quickly and frighten them. Though some do not mind, it is important to put this information or ask about it upfront, so it doesn't come as a surprise at the end of a contract arrangement. Flood insurance can be a costly expense.
- Home Owner's Association documents - On occasion, a buyer may decline a purchase after reviewing the HOA docs. Some people are very "anti" when it comes to being told how many trees should be in the front yard, your roof tiles should be a certain color, or you can not have your boat in the drive way. The list goes on with HOA's. Some people just believe if they are going to own a house, then they want to be able to do whatever they can with it.
- Option periods - Another main reason a contract could be cancelled is during an option period. An example, a buyer can cancel a contract during an option period if the inspection shows too many problems. An option period can range as specified in a contract. But basically, if someone sneezes, the buyer can cancel it.
- Financing Issues - It is wise for both the buyer and the agent to get a pre-approval letter before you even start to look for homes. It is a waste of time for all to spend hours looking at homes and then you can not be pre-qualified. Some times agent do all the paperwork working as a liaison between the title company, mortgage people, and seller agent only to find out the client didn't get prequalified after all. There are a lot of people involved so it is important to do this first.
- Agent honesty - Disclosure is a very important part of real estate with all parties including an agent, buyer or seller. A contract can be cancelled if something was not disclosed to a buyer about a home. An agent may also cancel a contract if a client is not cooperating in an ethical manner.