Top 3 Reasons Why Home Sales Fall Apart and How To Stop It From Happening

Your home for sale is under contract and you are looking forwards to closing your escrow as the agreed date in the purchase and sale agreement. You are excited about that. However, after a long waiting, there are only 2 to 3 days away from the closing, there is some bad news. You get a call from your agent, or your buyer (if you are doing for sale by owner), telling you that the deal is not going to be closed and the agreement is falling apart.

It is very bad news for you because you have pulled off your home for sale from the market for several weeks and could have lost the opportunity to sell to other homebuyers. Worse of all, you  may not only have to refund the earnest money to the homebuyer, but also have to put the home back on market for sale again. You just wonder why this happens and what you should do to prevent it from happening at the beginning.

The top 3 reasons why most home sales fall apart , or the top 3 deal-stoppers are:

1. You have a contract with an unqualified buyer 

Most of the time, home sellers accepted offers  without asking the question if the homebuyer  is qualified or not. Then, the home seller only found out several weeks later that the homebuyer couldn’t get the mortgage loan . In this case, you not only have to let the buyer back off, but also have to refund the earnest money  to the homebuyer.

Always ask a lender pre-approved letter  accompanying with any offer. Although you cannot be 100% sure, at least, you know that most of your potential homebuyers are capable buyers. It could decrease the chance of this kind of falling apart.

2. Homebuyer receives negative information about your home

Homebuyer receives negative information about your home from a home inspector . The home inspector found out something negative about your home and it was not disclosed in your seller disclosure form .

Disclosure laws vary from state to state. If you didn’t disclose something required by law, buyer can back off the contract and you have to let the contract off and release the earnest money to the buyer.

Make sure disclose everything required by law about your home. If you think there is something negative about your house and can be fixed, you may want to fix it first before you put it on the market and disclose it as the problem fixed.

Sometimes, ordering a pre-inspection may make sense for some aged houses as a proactive measure.
3. You have a contract with a qualified buyer . But something happens, which makes the homebuyer unable to buy anymore

If you have a contract with a qualified buyer  on the term of three months to close, the chance to fall apart may be much higher than a contract with a term of one month to close. Nobody can predict what could happen to the homebuyer during this 3 months period.

The way to stop possible falling apart of the deal is to avoid a long close of escrow. The shorter the escrow is, the better it is for you from this standpoint. But, it has to be reasonable and acceptable by both parties.

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