5 Reasons Why Deals Fall Apart
It’s now a common fact that 29% of all signed contracts do not ever reach the closing table. Almost 3 out of 10 deals wherein an agreement has already been reached by the buyer and
seller fall apart. In a typical market place, the normal closing rate should be 90% of deals. If you want to increase your chances of closing a deal, then you should be aware of the reasons why deals fall apart.
1. Short Sales
Short sales seem great on the surface since the buyer can haggle for a lower price with little resistance from the seller (the seller won’t bother resisting since they won’t profit from the
deal anyway). But then again, the present lender won’t just settle for any offer. Appraisals are performed and closely examined. Lenders usually won’t agree to big price reductions. On top of that, lenders will usually take months to decide, resulting in impatient buyers withdrawing their offers (and looking for another home).
2. Appraisal Concerns
Presently, much more appraisals are coming in short than in any other time in history . A home’s market value has been generally considered as “what a reasonable buyer would be willing to pay to a reasonable seller”. But “unreasonable” sellers are plentiful in today’s market (short sales, foreclosed properties, distressed circumstances, etc.), most of the comparables utilized for an appraisal tend to pull the figures below normal.
3. Title Issues
The evaluation of Permits and Certificates of Occupancy are at a record high. Judgments and liens are more commonplace among buyers and sellers. The issues regarding title are breaking up and stalling deals.
4. Lousy Pre-Qualifications
Lots of deals never should have passed as deals in the first place. Lending officers should be more careful in analyzing contracts, tax statements, bank statements, pay stubs, and other
contracts prior to giving pre-approvals and receiving applications. A simple slip-up such as overlooking expenses that were not reimbursed on the tax returns can ruin a loan.
5. Unexpected Problems
Expect lots of unusual and unpleasant circumstances to come up – buyers getting fired from their jobs, problems with credit as a loan being processed, damage to property, buyer’s
remorse, and the list goes on.
Several of these issues could be easily detected early on if only people closely look at them. The issues that can be easily detected are usually seen by seasoned real estate agents, loan
officials and lawyers. Most of these issues can easily be resolved if addressed early on. This is the reason why it is of utmost importance to look for and deal with only the best professionals in the industry.