Three ways your real estate transaction can get iced
It’s something that is more common than you may think with home sales. The Buyer makes an offer, the seller accepts, real estate agents blast out on social media SOLD 123 Elm Street! Then everyone starts packing. Something comes along that feels like getting Checked from behind in a hockey game and the deal melts away like ice in springtime. With a little preparation and homework you can avoid getting checked in your real estate deal or having your deal thrown into the penalty box never to emerge.
Although there are many interesting and creative ways to get a real estate deals done there are as many if not more ways to see a deal totally melt away. Although any one of these can kill a deal there are ways to avoid them altogether when properly prepared.
Here are the top three ways that your real estate deal can melt away and how to avoid them using Hockey analogies.
Getting Checked or you never saw this one coming
Cross Checking or the home loan is denied or suspended. Because
The Buyers Credit Situation changed – Missed Payment or large Purchase or the Lender did not Underwrite the Pre-Approval. You can avoid being Cross Checked or Checked from behind if you insist your have a fully underwritten Pre-Approval not a pre-qualification.
- As the Seller, read that pre-approval and see if the mortgage company has not just looked at the credit and the loan application but Verified it. Has the mortgage company actually looked at the Tax Returns, Pay Stubs, Credit report and Verified employment in writing? If not you may be about to get Checked from behind!
- As the Buyer, make sure you have a fully underwritten pre-approval. Many times lenders don’t take the time and request adequate information so it can be submitted to an Underwriter and obtain a underwritten pre-Approval. If it’s not pre-approved by an underwriter the “pre-Approval” may not be worth the printed on.
Results of home inspection stop the deal cold
Kneeing or the home inspection. The results of a home inspection can stop a real estate purchase dead in it’s tracks just as kneeing can stop a big hockey player! A home inspection can turn up some “surprises” that need to be dealt with that may give a buyer pause when purchasing a home. There can be a foundation problem, the property is not up to code and the law requires it to be brought up to code. A handy person adds an addition that is not permitted or on the tax rolls. While you may be able to save a few bucks and live with some items they may come back to haunt you requiring you to pay thousands to fix, repair, change or bring up to code at a future date.
Appraisal Results cause Interference
Tripping or the Appraisal. The appraisal is one if the trickiest part of real estate and one that can cause endless amounts of interference in your real estate transaction. Just because the Buyer and Seller have come up with an agreed price that doesn’t mean that’s what the appraisal will come in at. A few recent sales near the home in question can result in the value coming in not as expected. The same goes if the properties that have sold recently are farther out. The underwriter may devalue the home that is being purchased leaving the buyer to come up with more money or the seller having to pay to sell the home. The reason for a lender being so cautious with an appraisal is that if the case of a buyer default they want to know they can resell the house and recoup the legal costs of foreclosure and any repairs that may need to be done.
Time is finite and precious
Yes this is number four, but how often you got so wrapped up in a hockey game you forgot about the clock?! So we’ll call this the Sudden Death Overtime or just taking too much time. The majority of home sales go through in a timely manner. However, some turn out into long drawn out affairs and the cause can be on the buyer and seller side of the deal. There is a maddening amount of activity that both the buyers and sellers have to deal with such as inspections, appraisals, loan documentation & disclosures, title work and repairs. All of these have deadlines and if one is missed it can delay the process. So in this case keep your eye on the puck and shoot quickly and true.
Keeping your Eyes on the Prize When Purchasing a home
In closing many of the above real estate penalties can be avoided with some careful preparation and planning.
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