It’s common for questions to arise whenever a house goes back onto the market after having been listed as a pending sale. These questions may be asked by neighbours and local real estate agents alike. They will wonder why the sale didn’t go through, and if it was due to the seller suddenly having a sentimental change of heart. In most cases, a change of heart is not the reason for a property sale to fall through.
As you start the property selling process, you’ll want to work with a local real estate agent who has an eye on sales like this in your own neighbourhood. A thorough understanding of the local market can help increase your chances of a sale going through to fruition. Compare your options by choosing to register your details at LocalAgentFinder. This free, no-obligation service matches real estate agents with sellers and landlords across Australia. If you’re selling in a buyer’s market, you may notice a “pending” sticker on local “for sale” signs in your local neighbourhood after two to three months of them being on the market. It takes longer for a sale to go through in a cold market, because the supply of houses outstrips demand from buyers.
However, you may have also noticed this pending sticker removed from the original “for sale” sign after some time. In these cases, it’s natural to wonder what went wrong.
There are many reasons why property sales may fall over, including the following.
Buying property is a huge commitment, and it’s natural for individuals making one of the largest purchases of their lifetimes to suddenly get cold feet. This is known as “buyer’s remorse,” and unfortunately it can happen quite suddenly. There are standard clauses which can be written into a contract of sale which give the buyer the chance to cancel their contract within a predetermined time period, without any real reason.
This is inconvenient for the seller, to say the least. What was formerly a smooth real estate transaction can suddenly dissolve before your eyes, even right before settlement day. The buyer may never give you a real reason. They can simply opt not to go through with signing the loan paperwork, although they will usually lose their deposit as a penalty. Studies show that many buyers often regret this type of decision, but buyer’s remorse is still a fairly common phenomenon.
Fortunately, most buyers these days choose to work with an experienced real estate agent, who can help assuage fears and make sure that they don’t back out of what should be a positive buying experience. Many estate agents are experts at working with first-time homebuyers, and can help them go through with the transaction to best suit the needs of all parties involved.
Property Sale Doesn’t Go Through after a House Inspection
Before a transaction can be completed, the property must be inspected. Professional property inspectors have expertly trained eyes which allow them to spot any potential issues in a home that could spell trouble for the future buyer. This could include leaking roofs, wet spots on the ceiling, cracks in the walls or foundation, and faulty heating systems. The professional home inspector will compile these observations into a report. If they manage to find a few faults, the buyer may panic. However, it’s important to remember that all homes have a few flaws, even those which have just been built. With this report in hand, the buyer may wish to have certain repairs completed before they will agree to sign the contract.
This could include something as simple as repairing an old appliance. The buyer may also ask for a discounted price as a means of compensation for the money they will need to repair these issues. If the seller doesn’t wish to agree to these terms, then the pending sale could be cancelled and the property put back onto the market.
Even though it’s frustrating to find your home back on the market, don’t fall prey to buyers who have unreasonable demands. Pay attention to any issues that the qualified home inspector discovers, and make repairs that are necessary. However, there’s no need to go beyond this to suit the demands of an overbearing buyer. When in doubt, it’s a good idea to speak to your own real estate agent about whether the demands are worth your time and money. You can find a local real estate agent with experience negotiating sales by comparing your options at LocalAgentFinder. This will help you find an individual who knows the local market well.
Property Sale Fails Due to a Low Valuation
Along with a property inspection, many buyers will want to get a professional valuation of your house. This may be due to their bank or mortgage lender, which often makes this a mandatory requirement. The lender doesn’t want to lose money on their end of the financial transaction. If the professional appraisal comes in below the sale price, this could lead to a variety of outcomes. The buyer will have the option of:
- Paying the difference with their own savings
- Finding a second opinion using a different professional valuer
- Providing the mortgage lender with sales information to support the current sale price
- Ask the seller for a second mortgage to help compensate for the difference
- Ask the seller to reduce the property’s sale price
This final option is the most common. If none of the options mentioned above are suitable to both parties, then the property sale will fall over.
Property Sale Doesn’t Go Through Due to Mortgage Loan Being Rejected
The buyer’s own financial standing is important in the success of a transaction. It may not be until the buyer’s history has been researched by a title company or conveyancer that liens or judgments against them are found. Should these not be removed, the lender won’t go through with issuing a mortgage. This will eliminate the buyer’s means for purchasing your property. If the buyer makes a large purchase using a line of credit at the same time that they are waiting for their pending home loan, this will upset their debt ratio. This could lead to your property being put back on the market for another buyer. The lender could also refuse to go forward with the mortgage if the buyer has made financial charges that differ from the original application.
Buyer is Unable to Sell their Own Home
In some cases, a pending sale can fall through if the contract depends on whether or not the buyer is also able to sell his or her own home within the specified time period. If the buyer is unable to make a sale, they may not be able to afford two mortgage payments and will therefore need to drop out of the contract.
A bridging loan or line of credit tied to their home’s equity could be options to prevent this from happening. However, to help protect your own rights it’s best to add clauses into the contract of sale allowing you to break the contract with a contingent buyer should a different, approved buyer come along.
These are just a few of the main reasons why a property sale could fall over at the last minute. This could vary according to your individual circumstances. To prevent any trouble when it comes to selling your home, you’ll want to work with an experienced real estate agent. Sellers and real estate agents have been using LocalAgentFinder to connect since 2007. Find out how it works and start comparing agents today.