5 Barriers to a House Closing Part 1
As experienced home investors, we buy houses for cash in Clarksville, TN, so we know how tedious and stress-inducing the home selling process can be. There are many hurdles to cross before keys switch hands. In order for a closing to be successful, all parties have to work together to ensure all documents are gathered and processed correctly. Unfortunately, many closings have been halted by unexpected delays and errors. Read this section and part two to learn about some of the common obstacles people experience when closing on a house.
Financing Falls Through
Although a buyer may be pre-approved, several things can go wrong and prevent the loan from closing at the last minute. If the buyer’s job situation changes, their credit score decreases, or discrepancies (i.e., inaccurate information or lies) are found on their loan application, this could prevent the loan from closing.
Your Appraisal Comes in Too Low
Lenders select reputable appraisers to determine the value of a home. The lender wants to ensure that the size of the loan isn’t greater than the value of the house needed for the loan. A low appraisal is frustrating for all parties. When dealing with a low appraisal, some of your options include challenging the appraisal, asking the buyer to make up the difference, split the difference with the buyer, or put the house back on the market. Worse case scenario, the buyer will walk away from the purchase and you’ll be back to square one wondering, “Who will buy my home in Clarksville, TN”?
Someone Gets Cold Feet
Real estate contracts must be signed cautiously, and there are risks involved if either party decides to back out of the contract. Depending on your contract, you or the buyer could walk away for different reasons. Sellers can back out of the contract due to certain contingencies not being met, if the contract hasn’t been signed by the buyer, or if the buyer doesn’t adhere to the contract terms. Buyers risk losing their deposit money if they back out or fail to meet the terms of the contract.
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