So you accepted an offer for your house and are waiting for the sale to close. It’s all smooth sailing now, nothing can go wrong, right? 

Sadly, no. A lot can happen between now and closing to cancel the deal. Pending home sales fall through all the time. Residential real estate transactions can be fickle things. 

In this post, we’ll cover the most common reasons why pending sales fail. Along with some tips on how to deal with and prevent them, you’ll be better prepared for a successful home sale.

Disclaimer: This blog post and website provides general information on Maryland real estate. Maryland Estates, LLC, doing business as Creo Home Buyers, and its authors are not liable for the accuracy or use of this information; consult with a trusted real estate professional or attorney for guidance regarding your unique selling situation.

1. Lack of Proper Financing

Home buyers who are unable to secure financing is one of the common reasons pending property sales fail.  

This can even happen if your property buyer was pre-approved for a mortgage. Just because a buyer is pre-approved it doesn’t mean they will be able obtain a mortgage.

After you accept an offer the buyer needs to be careful with their money and finances. If they buyer makes a large purchase or has a hit on their credit score then all bets are off for obtaining traditional bank financing. This is a common reason for pending home sales that fail. 

Unfortunately, mortgage rates can be all over the place, changing from hour to hour. If the market makes a move against your buyer then your homebuyer could have a hard time securing a mortgage to buy the house.

Your buyer may get a pre-approval before making an offer, but it’s not an actual approval. You need buyers that are serious about buying and have patience. Hopefully the buyer’s real estate agent reminds them that major purchases can effect credit scores, mortgage rates, and their ability to secure financing for the home purchase.

2. Formal Inspection Issues

Problems discovered during an inspection are one of the most frequent reasons home sales fall through. This is why many home sellers decide to sell their property to companies that buy houses AS-IS so they can avoid inspection hassles.

After a deal is accepted it is likely that the buyer will want to have the home inspected. In fact, most mortgage lenders require formal inspections. Buyers and lenders want to make sure the home is in the condition it appears to be in. If the inspection turns up a few curveballs then the sale may fall through.

If issues are found during a home inspection, the buyer will likely want to lower the price or ask for compensation to cover the issues. However, depending on the issues, home buyers may want to walk away from the sale altogether. 

This is one of the reasons it’s so important to disclose known property issues about the home to the buyer. Be upfront and the inspection will be less likely to uncover any unwanted surprises. An upfront seller is a good seller more likely to have less difficulty selling their home. 

Now there is a chance the inspection uncovers something about the home that you didn’t know about. In this case you’ll want to work with the buyer to make sure the deal still goes through. You may have to re-negotiate and offer seller concessions, repair the issues, or sell for a lower price, to make sure all sides are satisfied with the deal. 

If it’s a serious issue, like foundation or electrical issues,  you could be looking at a serious discount in selling price. Or you might need to find yourself a new buyer because most traditional home lenders will not lend money for a house with such major issues. This is why most home sales include a home inspection contingency.

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3. Low Home Appraisal

A low home appraisal can negatively affect the closing ability of a real estate deal and is another reason pending sales fall through. 

Mose lenders will require a formal appraisal of the home before they’ll issue a loan or mortgage. Appraisals give lenders and all other involved parties an idea of the true value of the property. 

What the house is worth is important. Lenders compare the appraised value to the purchase price of the home. If the two numbers don’t line up this is called an appraisal gap

Appraisal gaps can happen in a hot seller’s market where multiple bids drive up the offer price. In such cases, the appraised value is likely to be lower than the buyer’s offer price. 

If the home is appraised for a lot less than the sale price the lender will want to make adjustments. They will either not grant the mortgage or ask for payment to make up the difference. The buyer will be the one asked to make up the difference. 

You may have to reenter negotiations to lower the selling price of your property in order to get the deal done or you may find your house back on the market.

4. Cancelling the Purchase Contract

As the home seller you are able to cancel the sale contract under certain conditions. 

A common time for this is during the attorney review period. During this time you can expect inspections, contract reviews, and negotiations. An attorney is able to cancel if the re-negotiations fall through. Or if there is an issue with the contract itself, like a missing signature. 

Canceling a home purchase and sale contract can also bring contingencies into play. You, as the seller, may have set conditions where the contract can be canceled if those conditions are not met. These are called home sale contingencies.

A very common contingency in the contract is a new move clause. This ensures that you can find a new residence or living arrangement before the sale of the current home is final. 

Remember in most cases that if you, the seller, back out of the deal, any earnest money deposit is refunded back to the buyer

5. Property Title Issues

Issues with the title might mean your home sale fails. 

Title companies research the property title before the sale of the home. They will look for any issues that could keep the home purchase from closing. Basically looking for any problems with the title. 

Common title issues

The title will need to get the all-clear before the sale can be finalized. Resolving these issues can be time-consuming and require a lot of communication back and forth with the title company. 

This can cause the home buyer to walk away without a deal as they loose patience waiting for title issues to be resolved. 

6. Buyer’s Remorse and “Cold Feet”

Strong emotions can also cause a home sale deal to fall apart. You’ve accepted an offer but now you are having second thoughts.

Do I really want to move? 

What if these new owners destroy the house?

Am I making a huge mistake? 

Your family members can disagree about selling the home or moving. Some may decide they don’t want to sell. This can be a huge issue, especially if they have to sign off on the sale. 

These emotions are completely normal. Many people are attached to their homes. To sell their existing home is to sell part of themselves, their history. 

Once an offer is accepted the sale the reality of the sale starts to sink in for both the buyer and seller. Buyers often start to feel that first hit of buyer’s remorse, especially if their offer was accepted right away.

Working with an experienced real estate agent can help you navigate these emotional waters. Hiring an agent that doesn’t have an emotional connection to your home can be a life-saver. Realtors can help you focus on remaining as objective as possible, especially in a challenging real estate market.

You likely had a good reason for wanting to sell the home and that hasn’t changed. Remember to listen to reason, not so much to your emotions. 

On the flip side, a buyer can get cold feet too. The financial commitment of owning a home might become scary after their offer is accepted. Maybe they are second-guessing if this home is the right one for them. 

Your particular agreement and your state will determine whether emotions are enough to stop the deal. And just because you can walk away, that doesn’t mean it will be without penalty.

There may be some type of financial compensation due if the deal falls through. This goes for the buyer and seller unless it is a mutually agreed upon cancelation where neither is requesting compensation. 

7. Unexpected Life Events

Life has a way of throwing things at you at the best possible times. Just because an offer on a home has been accepted, it doesn’t stop life from happening. So many things can happen to get in the way of the pending sale closing. 

There’s not much you can do in these circumstances. You have to press forward and sell when the time is right.

Sometimes these events can just delay a sale and the deal will still go through eventually. Stick with it and do the best you can with the cards you are dealt in order to get to that closing table. 

Final Thoughts About Home Sale Fails

Sometimes deals fall through and there might be little you can do. But. . . 

Proactive communication and problem-solving can go a long way in preventing home sales from falling through. Most buyers are not looking for their dream home. They are hoping to find a home they love for a good, honest deal. 

Include a home sale contingency to make sure your needs are met. Keep the lines of communication open. Be honest. And think of solutions and try not to dwell on the problems. This is how you will close the deal.

Working with a professional cash home buyer is another option…

If you are having difficulty selling your home, no matter the reason, consider requesting a fast and free cash offer from Creo Home Buyers today! We offer no-obligation and no-hassle home offers to house sellers in Maryland, Washington DC, and Northern Virginia. Get started by filling in the offer form below. We look forward to speaking with you about selling your property!

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