If you've got your sights set on a house listed among Tuscaloosa homes for sale, the good news is that most home sales go through without a problem. In fact, Trulia announced in 2016 that fewer than 4 percent of home sales hit a snag. However, first-time buyers often run into some rocky situations because of inexperience.
But regardless of whether you've bought a home before or you're a first-time buyer, getting a handle on why sales fall through can help you avoid the pitfalls.
Our real estate agents have compiled a list of reasons why home sales commonly don't through.
- The seller has a change of mind.
Sellers can change their minds for many reasons, but purchase contracts generally don't leave much room to back out -- not that you're going to want to spend time and money in court trying to enforce a sale. Most likely, your best option is to move on. Here's hoping you got something from the seller to cover expenses.
- Buyer has a change of mind.
You, as buyer, may change your mind after you've signed a home purchase contract. If you've got some contingencies in the contract, you may be able to back out. For instance, one contingency might be that you don't get financing; another could be the inspection report may not be satisfactory. Yet another contingency might be regarding the buyer's home not selling, a contingency, by the way, that sellers don't like, although it's rather common. These contingencies sometimes allow the seller to receive backup offers, so the buyer may have to release the contingency if a better offer for the home in question shows up.
- Home inspection turns up problems.
Most homes — even new ones — have some room for improvement. But if those improvements turn out to be serious, you can likely back out of a home purchase by invoking a contingency in the home purchase contract. You might also renegotiate the price.
- Sometimes, an appraisal comes up short.
If your lending institution's appraiser declares the property you want to buy to be worth less than the asking price, what to do? A seller may agree to the lower valuation, but if the home is really worth what the seller is asking, they probably won't budge. You might appeal the appraisal with your lender, but you'll likely have to pay for a second appraisal. Or, you may switch lenders. You'll still have to pay for that second appraisal. But, if the home is really overpriced, the financing contingency in the purchase contract is likely your way out. Thinking about an FHA loan? These require an appraisal contingency so that you can get out of the contract.
- The buyer isn't approved for a loan.
You should contact a lender to get pre-qualified or pre-approved for a mortgage, so you will know how much you can afford to pay for a house. While you'll get a letter from the lender that they are willing to loan the money, it's not a guarantee of a loan. Your situation could change from loss of a job, more debt, or a change in credit score, and that could result in the loan being refused.
- The title isn't clear.
Lenders want to be sure a home's title is clear of liens or judgments and that no one else has a right to the property. They may refuse the loan if there are other claims to the property or if back taxes are owed.
Enlisting the services of a qualified, knowledgeable real estate agent can help you avoid pitfalls in a home sale, whether buying or selling. Contact us today.