In a seller’s market, it’s rare to see a deal go South, but it does happen. Many of the reasons are unknowns but all of them are painful…for both the client and the Broker.
It may be that you have a deal ‘flip’ on you the day before closing due to something like a foundation issue that caused the Lender to refuse to fund the buyers loan. It is not the buyers fault; they wanted the house. It is not the sellers fault either…and it certainly would not be the agents fault.
Why do real estate deals die?
The reality of this business is there are many folks that have to be involved in the successful closing of a real estate transaction. To many moving pieces.
From start to finish, you can potentially deal with dozens of people who are either directly or indirectly connected to your deal. And each of them directly or indirectly have a say in whether that deal can come off the tracks.
A typical real estate transaction
Let’s take a look at a typical transaction and some of the cast of characters involvement in whether your deal closes or not.
Aside from the buyer and seller, both of whom have a decided effect on whether a deal closes or not, you have a bunch of third-party participants…
No doubt this is the main culprit in how most deals dies. Don’t get me wrong I am not blaming those hard-working folks whom most do a great job. The amount of paperwork and red tape that they have to go through to get a deal closed is mind-boggling. It’s a surprise that any deals close at all given the mountain of crappolla they deal with.
Although they don’t have a direct effect on whether a deal closes or not, they do have a lot of power when it comes to addressing mountains or mole hills. I’ve worked with inspectors who are awesome and very helpful in explaining any issues the home may have to my buyers.
There are also those inspectors who take great pride in finding everything wrong with a house and letting the buyers know the sky is falling and they should run for their lives.
Again, they don’t have a direct result on the successful closing of a deal. However, if the home does not appraise at value or there are issues noted on their report, the lender sees these. The lender can demand certain things be addressed before they will fund the deal.
Title and Escrow
If there is a cloud on title or something that will identify a problem with the quiet enjoyment of the property, this can derail a deal. Always a good idea to have a very good title officer at your avail to walk you through these pit falls.
Contingencies and Conditions
Fun little bits that are written into real estate purchase and sale agreements that can allow a potential buyer to get out of a deal. These can be any number of things so it’s wise to have an experienced real estate broker representing you…at all times.
Real Estate deals die…that’s part of the game. Having the forethought to see potential issues is often times not enough when things like foundations or other issues arise that are not seen by the naked eye.
It’s not the end of the world, just the end of that transaction. My advice, shake it off and move on.