5 Different Ways Real Estate Deals Fall Apart

Buying and selling real estate can be complicated and there are a lot of opportunities along the way for transactions to fall apart. Here are the primary reasons that real estate deals fall apart based on our experience:

1. Pre-contract deal-killers. The first stage of a transaction occurs before an offer is even made. On the side of the seller, a few things could keep them from going through with a deal. They might change their mind after a lowball appraisal, a low offer, or a repair list that’s much too long. Overall, most of these pre-contract deal killers come from the buyer, though.

2. Post-contract deal-killers. After there is an accepted purchase contract that’s signed, there is another list of potential problems that could arise and kill the deal. Most revolve around money, repairs, and who is going to fix or pay for them. Sometimes, however, buyers simply get cold feet because they didn’t do their homework up front. Maybe they weren’t prepared for a big to-do list or there were some larger issues uncovered during a home inspection.

3. Buyers who made a contingent offer but were unable to sell. Every home is sellable. However, some homes take longer to sell for a variety of reasons. One of the most common reasons a real estate deal falls through is that a potential buyer can’t sell their current home or buy their new home without selling it first. If you’re selling your home and receive a contingent offer, you should not count on that particular buyer shaking your hand at the closing table. Home sale contingent offers in real estate have a much higher risk of failing than offers that don’t have home sale contingencies.

4. The buyer is denied their financing or loan. In a perfect world, every potential homebuyer with a pre-approval would get to the closing table, but this simply isn’t the case. Having a pre-approval letter is important for a buyer, but it doesn’t guarantee your mortgage will be fully funded. Until the closing occurs, a buyer isn’t guaranteed to receive a loan. There are situations, such as the buyer losing their job or experiencing health issues, that no loan officer can control.

5. Pre-settlement walk-throughs. The biggest issues here have to do with things being left behind, not being left behind, or fixtures or window coverings that should have been taken. Unknown utility liens and property taxes can pop up, too. For most of these problems, a bit of money or making a small change to the contract’s terms will fix the problem.

Finally, you should know that about one in four real estate contracts that are accepted end up failing. That’s a rather high number. This is why it’s important to work with a highly experienced real estate agent when navigating the home buying and selling process. Be aware of the common pitfalls of failed transactions, because that increases the odds that your deal won’t fall through.

If you have any questions for us in the meantime, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.