You are in the homestretch of your real estate transaction and you get that fateful call from your REALTOR® that things have gone awry and your deal might fall through. As a Lake Tahoe home seller, you can’t help but think of the open houses, all the times you fled for a last minute showing, the staging, the photos and all the negotiations once you got an offer. As a buyer, you think of all the Lake Tahoe homes you looked at, the excitement you felt when you finally made an offer on “the one”, and all the budgeting and bidding you did to make it work. Luckily, this is not a common happening in real estate, however, you have probably heard of it happening before. This aspect is one of the most important reasons you should work with a REALTOR®. They can not only help you understand where things went sour, but they will know all the ways to try and make it work last second. Here are a few scenarios that can contribute to this undesirable real estate misfortune.
The last minute back out.
One of the most common reasons a sale falls apart last second is because the buyer or seller has remorse and decides to step away from the transaction.
The buyer could be experiencing second thoughts on the price, closing costs being too high, worrying about repairs or renovations, expensive mortgage payments and all the possibilities that come with new home owner ship. The seller can save this one by lowering the asking price, covering the cost on some repairs or chipping in more money on the closing costs. On the other side, the seller could back out because they decide they want more money for the house or they are feeling the financial pressure of paying for the closing costs, repairs, etc. In this situation, the buyer could increase the money with a counter offer or pay for a bigger portion of the closing costs. For the best way to handle this scenario as a seller, consult your Lake Tahoe REALTOR® and they can best advise based on local market conditions.
The bank rejects the loan last second
This is where getting pre-qualified instead of pre-approved comes in handy. The most promising sale can fall apart due to financing at the last second. If this happens, check your credit report for any errors or items that have been paid off and not properly reported. Also, a buyer should refrain from taking out any big loans leading up to a home purchase as these can harm the loan qualification process. Another fix if possible is to offer a larger down payment which will not only reassure a lender, but it reduces the mortgage amount.
Contingencies
Contingencies can also be a cause for a deal to fall apart in the last hour. A real estate transaction typically has numerous contingencies such as obtaining the loan (which will include obtaining insurance and a satisfactory appraisal,) inspections, discovery and more. Whatever the reason, as long as both parties are committed to completing the transaction, there can be a number of “fixes.” For example, If the contingency is based on the success of another real estate transaction (the domino effect), either party can attempt to negotiate an extension. Whoever is the reason for the delay can give back a little cash or cover the cost of accommodations if necessary. If the contingency is due to a structural inspection, the seller could look into their insurance to see if it covers the cost of repairs or negotiate the money or terms to fix needed repairs.
As we have stated in other blogs, the use of a REALTOR® in buying or selling a home is extremely important due to the variables that can not only arise but threaten the success of a deal. Not only does a REALTOR® represent you from start to finish, but they protect you and your best interest by advising how to respond to some of these scenarios. If you have experienced one of these situations in the past and are hesitant to buy or sell again, be sure to call me at 888-827-8957 as I am well versed in all aspects of the local Lake Tahoe real estate market.
