Successfully completing a real estate transaction takes a lot of effort to complete, but can take only one person to drop the ball and grind things to a halt.

 

Today, we’re looking at 4 Reasons Why Home Buyers Back Out.

 

The reason that we’re taking a look at this issue today is so we can avoid having our real estate transactions cancelled by being much better prepared.

 

 

 

1. Financial issues

 

Many people get pre-qualified, which means having a financial lender do a really basic review of your credit report and take some notes on your employment, income and assets.

 

Basic review of your credit report, employment, income & assets.

 

But pre-qualification isn’t detailed enough to guarantee how creditworthy you are in the eyes of the lender; it’s really just a snapshot.

 

Pre-approval on the other hand, involves a lender performing a full assessment of your financial situation, full credit checks and provides a specific loan amount.

 

Since pre-qualified buyers can have mistakenly believe they are able to afford more than they can, this can lead to transactions falling through. 

 

The solution then is to make sure your buyers are pre-approved before proceeding.

 

  

 

 

2. Conditions resulting from home inspections

 

Home inspections are meant to find any and all problems in a home. There can be dozens of issues discovered by home inspectors in their reports.

 

But this can make buyers add many more conditions than the sellers had anticipated. After all, home inspections often uncover issues not even the homeowner was aware of.

 

Sellers usually have no issues doing minor repairs, but costly repairs can jeopardize the deal.

 

When buyers receive the report from their home inspector, they need to see whether or not the cost of repairs is accurately reflected in the price.

 

 

 

 

3. Better alternatives

 

Even if a buyer seems infatuated with your home there is actually a high chance that they’ve put out multiple offers on different properties at the same time.

 

What some buyers can do is actually use their contractual contingencies or lack of financing to allow them to back out of deals while not breaking their contract.

 

 

 

4. Buyers getting cold feet

 

Sometimes just the idea of making a big commitment to buying a home is overwhelming. Home buying is the largest buying decision most people make. 

 

And considering how much work goes into making a real estate transaction happen, it's not hard to see why people get cold feet.

 

There is plenty of paperwork and documentation, and it can be emotional leaving your current home for somewhere new.

 

And now in pandemic times, there’s even more uncertainty regarding unemployment. 

 

Interest rates right now are at an all time low, but even so people can become nervous about being on the hook for payments for the next 25 years.

 

With times of uncertainty and high stress, buyers can become cautious of commitment and obligation and choose to revoke their offer and cancel the deal.

 

Until the closing paperwork is signed nothing is official and the buyers can try, sometimes unethically, to get off the hook.

 

This is why we really need to make sure we look at the strength of offer terms and make sure that we look at each buyer’s track record, as opposed to just choosing the highest price.