Burnet Texas Homes: Why Real Estate Deals Fail – Part 1
June 8, 2014 | Tom Ashworth
Most buyers and sellers of Burnet Texas homes are usually surprised when their real estate deal falls through, but the reasons this happens is often predictable for an experienced agent.
Here are a few of the most common causes:
If you are selling your home, you should never take your home off the market and put it to a pending status unless you a firm loan commitment from a lender. This does not mean “pre-qualified”, this means “pre-approved”.
A “pre-qualified” letter means nothing. It just says that they have an OK credit rating and according to what they told the lender, they should be able to get a loan. These letters usually contain a list of conditions that must be achieved before the lender will approve the buyers’ loan.
Many times you have to negotiate twice on every real estate transaction. Once with you negotiate the initial contract to sell your home and then you have to negotiate if your home has defects that fail home inspection.
If you can’t get both parties in the transaction to agree the deal will fail.
Buyer’s Changed Their Minds
A home buyer (especially in declining markets) realizes that they offered more than they should have for the home. They could just forfeit the earnest money and walk away or try and find something wrong in home inspection, just to get out of the contract. Since there are many contingencies in real estate contracts, buyers usually have no problem getting out of the contract and getting the earnest money returned.
It is a good idea to get a high earnest money deposit with the offer if you are a seller. 1% to 1.5% or $1000 whichever is greater is usually what I recommend.
If I am representing a buyer, I usually try to offer as little earnest money as possible. I suggest my clients start at 1% or $500 whichever is lower.
Seller’s Changed Their Minds
This can be very tricky. It is very hard for a seller to get out of a deal on a real estate contract than it is for a buyer. Usually the only way is for this to be handled in a court of law or by an arbitrator.
Attorneys reviewing the contract can recommend that the buyer get out. Parents can influence their children (First Time Home Buyer) to back out of the deal for many different reasons. I once lost a transaction once because the father did not like the fact the home was more than 5 miles away from where he lived.