Top Three Reasons Real Estate Deals Fall Through
Once real estate is under contract, many buyers and sellers make the mistake of assuming that the hard part is over. In reality, however, that’s when the work begins — and, unfortunately, real estate deals can fall through during the contract phase. When this happens, it leaves all parties stunned, as they are forced to start over the entire buying or selling process. While having a real estate deal unravel is stressful, it is not all that uncommon. Thus, by being aware of the main reasons that real estate deals fall through, you can prepare accordingly to avoid your real estate deal from failing before settlement.
Real Estate Title Problems
An issue with the title to a property can quickly derail a purchase, which leaves all parties dissatisfied and upset. Often times, title defects are not found until a title abstract is completed — which usually occurs shortly before closing. When this happens, buyers and sellers alike have little time to react. Finding out that a property has a judgment or lien against it, in most cases, will lead the lender to deny the buyer a loan until the title issue is resolved. And, depending upon the situation, it could take months or longer for the title issue to get resolved. In some instances, a lawsuit, known as a quiet title action, is required to “clear” a cloud on the title to property. A quiet title action, while unavoidable in some cases, can take time and cost money that no one anticipated.
Loan Denial
After being “prequalified” for a loan, many buyers assume that they will experience nothing but clear sailing going forward. Unfortunately, a preapproval does not mean that the lender cannot change its mind. If the buyer’s credit score drops between the preapproval and closing, then the bank may refuse to finance the purchase entirely — or, in other cases, will not approve the entire amount needed to complete the sale. Occasionally the buyer may pay the difference with cash, but if he or she is unable or unwilling to do this, then the entire transaction may fail.
Real Estate Inspection Problems
A property that looks wonderful on the outside may have a multitude of problems on the inside. Issues such as leaks, damaged roofs, moldy basements, and more, are usually revealed during a detailed home inspection completed by a professional. While some problems are easy to resolve, expensive repairs may make the buyer have second thoughts about the entire purchase. If a buyer is getting cold feet about the transaction in general, then even a minor cosmetic or appliance issue could turn into a major point of contention. If a seller is unwilling to make repairs or offer a credit, then the entire sale may come to a halt.
Getting the Legal Advice You Deserve – Contact Zwick Law
If you or someone close to you has recently experienced problems with buying or selling a property, consulting a real estate attorney can help you determine how to proceed. The attorneys and Real Estate Settlement Division at Zwick Law understand how stressful real estate transactions can be, and we are able to guide you through each stage of the process while providing you with the legal advice you deserve. With offices conveniently located in DuBois and Brookville, Pennsylvania, we are available to provide you with a private consultation to discuss your situation and individual needs.[1]
[1] Disclaimer: The use of the Internet, Facebook and/or any other form of social media communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Time-sensitive information should be directed immediately to the office of Zwick Law at (814) 371-6400.
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