You have accepted an offer on your home and the sale is pending, but you’re not quite out of the woods yet. To avoid getting yourself into a sticky situation, here are 4 things that could cause the sale of your East Hanover and Morris County house to fall through.
Your Buyer Lacks Financing
The first big hurdle when finalizing the details of your home sale is both parties making sure the buyer has obtained the proper financing to fulfill their offer on your home.
The buyer’s financing failing could be due to their home loan application being denied or approved for a lesser amount than they requested. Even if the buyer provided a letter of pre-approval from their lender with their offer, that does not mean they have secured the loan to finance the purchase of your home.
Oftentimes, buyers and sellers will be caught up in all of the details of what’s happening in negotiations and fail to recognize pre-approval for what it is, and this can certainly cause issues for both groups down the line.
Inspection and Appraisal Issues
More often than not, the buyer will require both a home inspection and appraisal. Even if a buyer is willing to forego these important steps, their mortgage lender will typically require them before they will approve financing for the buyer.
A home inspection is a thorough examination of anything and everything on the property in order to make sure everything is up to code and will not pose an immediate danger to the buyer. Sometimes an inspection will reveal major issues, such as mold or foundation or roof damage.
Coming away from an inspection with problems like these can cause a mortgage lender to put a hold on financing or even a buyer to walk away from the deal entirely.
Next, an appraisal is a normal request by a mortgage lender to ensure the value of the property is not less than what the buyer is offering you. The reason for this is, if the value of the property is lower than the agreed price, the loan becomes high-risk if the buyer fails to pay their mortgage. The lender is then left with a home worth less than what they allowed the buyer to borrow.
Ultimately, this means the lender would lose money having provided financing to the buyer. If either the inspection or the appraisal comes back unfavorable, it can cause the sale of your house to fall through.
Contingencies Are Not Fulfilled
When it comes down to closing on your home sale, the buyer isn’t the only one doing the work.
After an inspection is done, and some possible unsavory details may be revealed, the buyer may request repairs done prior to closing on the home to guarantee these issues are remedied properly. Some buyers may prefer that they deal with them on their own and may instead request a change in their offered price for your home.
If you find yourself in this situation, it’s up to you what you feel needs to be done in your best interest. Do keep in mind that if a property is going in and out of pending status a few times, buyers will take notice and be wary, and it can cause the sale of your house to fall through even down the line.
Property Liens and Title Issues
The last big roadblock that can cause issues during a home sale is if there are any issues with property liens or the title.
A lien includes any unpaid bills or taxes related to the property itself. An example of a title issue would be anyone on the title who has not been represented throughout the sale, such as a previous spouse, roommate, or heir. As a seller, keeping your bills paid goes a long way to ensure this will not cause you issues.