What to Do When a Home Sale Falls Through
Selling your home can be a challenging experience under the best of circumstances. But the last thing you want is to almost close on a sale only to have it fall through at the last minute. Not only can this interfere with your best-laid plans, but it can also be profoundly defeating and take time away from other potential sales.
At Bill Buys Houses, we buy houses from homeowners and property owners who need to make a sale fast. In this post, we’re breaking down some of the challenges you can face when your sale falls through and offering advice on how to proceed next.
Give us a call if you’re ready to sell your house fast for cash and find out what we can do for you!
When Home Sales Fall Through: 8 Common Causes
When you list your home, it might seem like finding a buyer is the hard part. But unfortunately, a sale can start off as promising and not pan out, leaving you back at square one.
Here are some common reasons home sales can fall through.
1. Financing Issues
Any homeowner with a mortgage understands the challenges that face anyone applying for financing on a home. Any problems that arise with the lender’s specific qualifiers can create a hitch in the sale, and unfortunately, this happens far too often.
Additionally, a lot can happen during the time it takes to complete the approval process. For example, your buyer’s debt ratio could suddenly jump, or your credit score could take a hit sometime after the initial prequalification.
2. Appraisal Problems
Appraisals by the lender can be another tricky aspect when dealing with a home sale, especially if the buyer is going through the VA, FHA, or a similar program. When your lender uses a loan through one of these programs, the appraisal process has to be completed using a certified appraiser.
Similarly, the appraisal on a conventional loan can also be unexpectedly off from your asking price. Since no lenders will loan more than the policy’s ratio guidelines, problems with the appraisal can cause the sale to fall through.
3. Title Problems
Selling your home comes with its share of paperwork, not the least of which is the all-important title report. A title report is a legal trail that demonstrates the home’s history and shows the title is clear.
Unanticipated problems with the title can occur. These issues can range from missing heirs to unexpected easements.
In most cases, title problems can be eventually cleared up, but the time it takes to complete the process can end up costing you the sale.
4. Significant Repairs Are Needed
During the sale, your house will need to be inspected. If you haven’t had your home inspected before selling, this can lead to problems preventing you from closing on a sale.
While it may not be hard to find a buyer willing to address a few minor repairs, more significant problems can interfere with your ability to sell the home and leave it on the market longer than anticipated.
There’s also the danger that the home isn’t insurable. In order to get a home loan, you have to be able to insure the home. If a home is uninhabitable, it will be uninsurable. It could need significant repairs or has major damage. Not many companies will insure an unsafe home. So if your home is uninsurable, then the deal might fall through.
5. Personal Reasons
Life can be full of unexpected changes and challenges, even during a pending home sale. Maybe that job didn’t work out, or the buyer’s own sale didn’t go through.
Unfortunately, there’s always a chance that your potential buyers could experience an unexpected life change at the last minute that causes them to have to back out of a sale.
6. Cold Feet
The human component is the one aspect of homeownership that can’t always be planned for. Even if a sale is going perfectly smoothly and your buyers get approved on a loan, the decision to sit at the closing table is weighty.
And unfortunately, nothing is final until everything has been signed. It is always a possibility that your buyers could change their minds at the last minute due to concerns about the impact of such a lifelong decision.
7. The Buyer Is Struggling to Sell Their Old House
Your home sale could fall through if the buyer has problems selling their old home. They could undergo a host of issues like the appraisal not coming out in their favor or inspection problems.
If the buyer has major repairs or damage that they’re responsible for, it could also cause them to struggle to sell their house or make buying yours impossible.
8. Missed Details
If you notice that details are missed, or things don’t seem to be running smoothly, it could indicate a problem with the deal. There are different reasons why the process could be rocky, but if you have a gut feeling that something is wrong, make sure you ask your agent.
When you get a document to sign, make sure you read the entire document and understand everything before signing. Pay attention to deadlines that are proposed and missed. It could indicate a problem.
Warning Signs That Your Home Sale Is in Danger
Going through the closing process is scary, and some red flags might indicate that the deal will fall through. Watch out for the following signs.
As previously mentioned, missed deadlines can indicate a problem. Sometimes, missed deadlines are out of anyone’s control, but when something needs to be done within a set timeline and those dates are missed, it could be a problem. This can apply to reviewing disclosures or signing documents as well.
If the buying agent goes quiet, your deal might be in danger. This can make it challenging to move forward and could mean that deal could fall through.
Requests for More Time
An indication that the buyer might be having financial difficulties is when they ask for more time. While that may not always be the case, it’s still something to keep in mind as you go through the process.
Changes and revisions can stack up, and if these changes seem to be out of control, it could be a sign that the deal isn’t holding up. It could also indicate that the buyer isn’t quite sure about their decision.
What Can a Seller Do If the Homebuyer Backs Out?
If the homebuyer backs out of the deal, you might wonder what you can do as a seller. A homebuyer can back out of a purchase after they sign the purchase and sale agreement (PSA), particularly if contingencies were not met.
However, if contingencies were met and the buyer backed out, then there is the possibility that the seller would have the right to keep the earnest money. If the homebuyer canceled because they got cold feet, then it would be difficult for them to get the deposit back.
Buyers may also back out of escrow, which is more difficult. However, if they choose to back out at this stage, then they can face consequences for defaulting on the contract so late.
If there are no outstanding contingencies, then it’s possible that the seller has some recourse to sue. If all of the buyer’s deadlines have expired, then the buyer is considered in default of the contract. At this point, the seller can elect to keep the earnest money as damages and cancel the contract, or they can sue.
How to Sell Your House Fast in Minnesota
If you’re one of the unfortunate souls whose sale doesn’t work out, it can completely disrupt your life and your plans. Fortunately, when you need to sell your house fast, there is an alternative to get fast cash and move on with your life.
At Bill Buys Houses, we buy houses for cash without the hassle of listing your home on the market or waiting for a sale to go through.
These are just a few of the situations we can help with:
● Clients are moving and need to sell their old home now.
● Clients need to liquidate assets fast due to divorce or other circumstances.
● An elderly parent is moving out of their home.
● The repairs needed on a home are too much time and expense to be worth the process.
● Clients need to get out of a mortgage or investment property.
Get Started Today With a No-Obligation Walkthrough
When you work with Bill Buys Houses, the last thing we want to do is add to the pressure of selling your home. That’s why we offer a completely obligation-free walkthrough before we make any arrangements.
Once we’ve checked out your property, we’ll get back to you as soon as possible with a cash offer.
Besides houses, we also purchase all of these types of properties:
● Multi-family housing
● Commercial property
Sell Your Twin Cities Home “As Is” & Fast!
Are you a Minnesota homeowner who needs to sell your house fast? Give us a call at Bill Buys Houses today! You’ll love our caring, friendly service and attentive advice.
We’re more than just a company– we’re real people who understand the challenges you face. There are no situations we haven’t seen, and we will make sure this process is smooth and agreeable for both parties. Let us help you out!
Contact us online or call to request an offer on your home at 651-270-9191 and learn how we buy houses. We can’t wait to work with you!