Nine (9) Hurtles You Must Get Over To Finish The Event (Successful Home Sale)

Nine (9) Hurtles You Must Get Over To Finish The Event (Successful Home Sale)
By Mike Durr

Few things induce anxiety and frustration more than having a home sale delayed, especially when your belongings have already been loaded onto the moving truck.

Yet few paths from contract to closing are without a hurtle or two. Experienced real estate agents are attuned to these potential hurtles that come up, but consumers should also be aware of potential problems and how to avoid or get over the potholes in the road.

"Purchasing a home is an intensely personal and emotional process," says Al Bendenberg, a Coldwell Banker agent in Spring. Texas "It is not uncommon for minor hiccups to become major issues due to the emotional nature of the transaction."

Here are 9 of the hurtles that show up regularly:

1. The buyer has an existing home to sell.

Even if thel buyer have a mortgage preapproval and claim they can buy without selling their current home, when the deadline nears some of these buyers bale. In some cases, the mortgage approval disappears, says Don Wilmox, a agent with Century 21 in Sugar Land.

To protect your seller against a dilemma like this, and spare sellers the loss of valuable days on market, Wilmox specifies a mortgage contingency requiring the buyer to apply to two mortgage banks. A refund of the ernest money would only be given if the buyer is declined by both lenders.


2. The lender is unknown to the real estate agents.

Delays in approvals or last minute changes in terms can disrupt a deal. Savvy agents suggest having the buyers be pre-approved by a second lender, one both real estate agents work with and know can complete the work in a timely fashion. Then if a glitch comes up there will be a fallback. There is no downside to the buyer, and this will also give a good comparison of rates and fees to the buyer.

3. Phone calls or e-mails are not returned.

Good communication can speed up negotiations. When title companies don't respond or when an agent dodges calls, it can slow down the process or be an indication of a brewing problem. Although there is no absolute solution, the best precaution is to be proactive.

If the seller is a bank, or the owner needs the bank's approval (because the home is selling for less than the mortgage), the process can take much longer than a typical sale, and there is little real estate agents or buyers can do to hurry the process.

4. A property disclosure statement was left unsigned.

The property disclosure informs buyers about any known problems or defects of the property and explains what sellers have done to repair or resolve them. The price offered by buyers should take the disclosure into account. Experienced real estate agents won't allow sellers to agree to an offer until the buyer signs the statement.

5. Out of town appraiser.

Appraisers who are unfamiliar with a type of property, price bracket or area are a caution flag for real estate agents. Even if there have been multiple bids on a home, banks and mortgage companies will not go above the appraised value. Buyers can still complete the purchase but will have to close the gap between appraised value and sale price with additional cash.

Sellers should ensure agents can back up the list price with recent comparable sales. Although they can't influence appraisers, real estate agents can give them this information.

6. Garages turned into rooms and other additions.

Often the necessary permits were not obtained, have been lost or the municipality can't locate the records. Usually this occurs when the owners have been in the home a long time. Real estate agents should be on the lookout for potential problems like this. Many will do the research to locate lost documents.

7. Inspection opens the door to new price negotiation.

Home inspections are performed to uncover hidden defects that are not easily observable to consumers and real estate agents. Sellers should be proactive and repair everything they can and/or get estimates for any work they know needs to be done, because even minor issues can have buyers questioning the price.

Also, rather than have any repair items deducted from the price, and possibly delay the mortgage approval, some agents suggest sellers make a separate payment to the buyers.

Belinda Beadreaux with Keller Williams in Humble, Tx., says she troubleshoots potential defects ahead of time, such as a roof repairs which might be a deal breaker. Most of her first-time buyer clients have limited funds and cannot afford to waste money inspecting a home if there are obvious and expensive near-term repairs.

8. A change in the terms of a mortgage.

Suddenly payments on a 15-year mortgage seem too high or high fees offset a low interest rate. Changing terms can restart the clock and delay a deal. By law, a lender is required to provide a good faith estimate of fees and rates within three days of receiving a mortgage application. Even if they are only being prequalified for a mortgage, potential buyers should ask for a good faith estimate so they understand fees and rates.

9. An unknown lien is uncovered.

Old paid-off mortgages that have not been registered are the most typical title issue uncovered. In rural areas, water rights, property lines or other easements can cloud the chain of ownership and they are often not uncovered until the title is researched. Experienced attorneys who specialize in real estate can often find a solution so the sale proceeds on time.

So, as you go into a transaction and your mission is to get to the finish line, serving your client well, earning their referrals, and making a living, be aware that it is not a sprint, it is more like a obstacle course. Knowing where the hurtles and potholes are will ensure that you have consistent success.