6 Common Reasons Real Estate Deals Fall Through

Acquiring the real estate contract for a property doesn’t mean that the deal is already done and successful. Of course, it is definitely something that can be celebrated after all that you have gone through in the process. But you need to remind yourself that there are still many things that can happen between the contract date and the closing date. There are possible problems that may arise. It can be an issue with the real estate agent, the buyer, the mortgage, the seller, or a combination of all. To ensure the success of your real estate deal, it is best to know the common reasons real estate deals fall through.

Here are the things that you should watch out for:

1. Home inspection issues

The home inspection is an important part of the homebuying process. It is where you can assess whether or not there are issues or repairs that need to be done in the home. In most cases wherein major issues are found during the inspection, real estate deals fall through. These major issues can include molds, pests, foundation or structural issues, electrical issues, water pressure issues, roof damage, and building code issues.

If you are a home seller, it is best to have your home inspected even before listing your property on the market. This will give you a chance to address possible issues before a potential buyer knows about them. It will help you avoid problems that could cause your buyer to withdraw their offer.

2. Buyer’s failure to sell their current home

Another common reason real estate deals fall through is when a buyer fails to sell their current home on time. When buyers purchase a new home while still waiting to sell their current home, they submit an offer with a home sale contingency. This means that they can withdraw their offer if they aren’t able to sell their current home within a certain period. Some homes take a longer time to sell than other homes. If this happens, the real estate deal has a high chance to fall through.

3. Rejection of mortgage application

Getting pre-approved for a mortgage is a must when buying a home. However, a pre-approval doesn’t necessarily mean that you will be approved for the mortgage. While lenders do their best to ensure that the pre-approvals reach the closing date, sometimes, there are just some things that the lender has no control over. Some of the reasons that make the mortgage rejected are the buyer’s loss of job or sudden health issue.

4. Bank appraisal issues

If there are issues with the bank appraisal, a real estate deal can fall through. Real estate deals that involve obtaining a mortgage will need to undergo a satisfactory bank appraisal. If a bank appraiser determines that the value of the property is less than the sale price, it can be a problem. The buyer and the seller can negotiate and come to terms depending on the difference of the amount. So if the value of the property is much lesser than its sale price, the real estate deal will most probably fall through.

5. Problems with closing documents

Before closing a real estate deal, there are various documents that need to be reviewed. Common problems usually involve problems with the title of the property such as outstanding liens, public record errors, past bankruptcies, or missing heirs. For both the buyer and seller, it would be best to prepare the needed documents early so you will have enough time to address possible issues. Ask your real estate agent for the documents that you need to prepare.

6. Closing costs

Another reason that causes a real estate deal to fall through is when a buyer fails to foresee and prepare enough money for closing costs. Closing costs include attorney fees, appraisal fees, escrow fee, homeowners’ insurance, transfer fees, and property taxes among others. The amount of the closing costs can be significant and failure to set aside money for it can cause your real estate deal to fall through.

A competent real estate agent is essential

It is not just about finding the perfect home and looking for the right deal. It is important to have a trusted real estate agent who will guide you throughout the whole process and prepare you for any issue that could arise during the real estate deal. With a competent and knowledgeable real estate agent, you are guaranteed that there is someone who will efficiently help you address all possible concerns.

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OTTAWA — The number of homes sold nationally rose 11.3 per cent in November compared with a year ago but the picture varies significantly by region, said the Canadian Real Estate Association.

By: Canadian Press

OTTAWA — The number of homes sold nationally rose 11.3 per cent in November compared with a year ago but the picture varies significantly by region, said the Canadian Real Estate Association.

A major rebound in sales in the Greater Vancouver Area and continued growth in the Greater Toronto and Montreal regions propped up sales, while the Prairie cities of Calgary, Edmonton, and Regina saw declines.

Overall, there were 37,213 homes sold through CREA's MLS system, up from 33,437 in November 2018.

The increase in sales came as the national average price for a home sold in November was about $529,000, up 8.4 per cent compared with a year ago. Excluding Greater Toronto and Greater Vancouver, the average price was around $404,000, up 6.9 per cent compared with last year. The MLS home price index rose 2.6 per cent year over year to $638,300.

Price gains also saw regional variances, with the Greater Vancouver benchmark price down 4.59 per cent from a year ago and Prairie home prices also down, while Greater Toronto saw gains of 6.52 per cent, Greater Montreal had gains of 8.72 per cent, and Ottawa registered gains of 11.45 per cent.

"Sales continue to improve in some regions and not so much in others," said Jason Stephen, president of CREA in the release.

In its updated outlook, the association says it expects home sales this year to total 486,800, while it says the national average price is on track to rise 2.3 per cent.

That compared with an earlier forecast for 482,000 home sales for 2019 and a 0.5 per cent increase in the national average price.

Prices rose as the number of newly listed homes slid 2.7 per cent, driven primarily by fewer new listings in the GTA.

Nationally there is 4.2 months of inventory, the lowest recorded since the summer of 2007. The inventory, which represents how long it would take to liquidate current inventories at the current rate of sales activity, is well below the long-term average of 5.3 months.

For 2020, CREA says it expects home sales to rise 8.9 per cent next year to 530,000. The national average price is forecast to rise 6.2 per cent to $531,000.

TD economist Rishi Sondhi said he also expects rising sales in 2020 from job growth, population gains and a mild boost from government programs for first-time home buyers, though he notes there is some room for caution.

"This view rests on financial conditions remaining accommodative. The backup in bond yields since September, if sustained, could offer some downside risk to our forecast."

He said the recovery in home sales, especially helped by the Greater Vancouver Area's 55.9 per cent jump, would yet again support fourth quarter economic growth.



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When you think of the best timing of selling your home, winter might not be the first season that comes to mind! Aside from the freezing temperature outside, people are often preoccupied with the holiday season! However, there are many reasons why you should consider selling your home during the winter.

If you want to sell your home during the winter but are hesitant, here are five reasons to do it!

1. The buyers are serious.

Unlike popular belief, demand does not really go that low during winter. And while it is not the peak buying season, the buyers that will encounter are much more serious and motivated. The buyers you will encounter during winter are often in a rush, are ready to make offers, and plan on moving in before or after the new year. This is a great advantage for sellers because you don’t have to waste your time with buyers who are just looking.

2. There Is less competition.

You won’t have that much competition if you sell your home during winter. Many people decide against listing their homes during winter and wait for Spring instead. With less competition, it will be easier for your listing to stand out. You’ll be able to have a higher chance at attracting buyers and selling your home much quicker and at a better deal for you.

3. Loans are processed quicker.

For lenders, winter is a time when the inventory is smaller and they have more time to process loans. Since loans can be processed more quickly than other seasons, your selling process will be much smoother and your road to closing will be faster. If you or your buyer is in a rush to close the home before the new year, your buyers will not have s problem processing their loans.

4. You can get better deals.

Since there is less competition and buyers are much more motivated during this season, you can definitely negotiate better deals with your buyers. According to Redfin, listings during winter actually sell faster and for more money. Make sure to stage your home, create a good and sound contract, and have it inspected so you can put a premium on its price. You can take advantage of serious buyers and try to sell your property at a higher price and better payment terms.

5. It’s a great way to start the year.

If you’ve been wanting to sell your home or if there’s an inevitable reason to do it, doing it before the start of the year is definitely the best time. The end of the year is the perfect time to let go of your property. It is the perfect timing for Spring where you’ll be able to move on and start anew without carrying any pieces of baggage from the year before.

Selling your home during the winter, whether it’s because of financial reasons, relocation, or if it’s an investment property you’ve been holding on to, is a decision that you will be thankful for when Springtime comes.

If you think that it’s best for you to wait for Spring or Fall to sell your home, you better think again. While there are many factors that can contribute to your listing being sold, winter can definitely be a good time to sell it if you give it a chance. Keep these five reasons in mind the next time you hesitate on selling a home during winter!

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