There are property liens or a title issue. Usually, the sale cannot take place until lien or title issues are resolved, and this can take a long time. A buyer can decide that they don't want to wait and let the pending sale not take place. Perhaps the biggest contributor to the drop in outstanding home sales revolves around financing.
Loan approval may simply fail, or the money the buyer needs for a down payment may not materialize. There is no way to know for sure if any of these problems are likely to occur. But sellers can take the proactive step of contacting the buyer's lender to check their financial soundness. There's nothing wrong with seeing what the likelihood of a buyer being approved is.
Sellers can also protect themselves when it comes to buyer financing by knowing the difference between pre-qualified and pre-approved. A pre-approval letter does not guarantee funding, but it presents a much greater possibility than a prequalification letter. Avoid buyers who only bring a prequalification, or who don't have any financing letters, to the table. This is a special stage in the homebuying process where financing can fail.
Most lenders require an appraisal of the home in question to be made for purchase. If your home is valued for less than the sale price of the home, the lender may refuse the mortgage. Then, you will return to the topic of non-funding. This change in financial status can once again affect a mortgage.
Even if the buyer already has financing, there is usually a contingency that their situation will remain the same. Changes like this and the consequent loss of future income can lead to a rejection by the lender and the end of the home purchase agreement. Often, a buyer requests a home sale contingency, which states that the purchase of this home depends on the sale of their current home. There is no guarantee that the buyer will sell their current home within the approved time frame, and then they will have to abandon the sale.
If you, as a seller, have the same contingency for the home you want to buy, you will also lose your new home. The trick is not to be seduced by the idea of a cash offer without financing obstacles. It is best to avoid, or at least closely monitor, buyers who live abroad and want to buy their home without ever seeing it. When a homebuyer submits their financial information or a cashier's check for a down payment or as security, take the time to ask your agent or lawyer to verify that all information is legitimate before doing anything else.
Never give money to your buyer and never sign the deed before the closing has taken place in a legal environment. This content was created in collaboration with Dr. Sell with Sundae to get the best price for your home. It's as simple as these 5 steps.
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