If you wondering how often do contigent offers fall through, contingent offers are more common than you might realize. It’s essential to understand their risks and how they could impede a home sale transaction.
Creditors have financial goals that drive them to work out settlements quickly with borrowers, but they’re also people who may have experienced hardship themselves.
1. Unexpected Issues with the Buyer’s Financing
One of the key reasons a contingency offer can fall through is when financing isn’t obtained – this may happen for many reasons, such as missing deadlines or losing their mortgage pre-approval status.
Home inspectors may discover problems that cannot easily be remedied, such as water issues. If they discover such defects during an inspection, this may cause buyers to back out of the deal and cancel.
When buyers must sell their home prior to purchasing yours, this condition of the contract can prove challenging and could force them out if they can’t quickly find something else suitable.
Avoid this problem by selling to buyers who don’t rely on selling their existing home as part of their contingency agreement, to save yourself the trouble of having to relist in case their sale collapses; however, this may extend closing timeframe.
2. Delays in Inspections
Sellers don’t want their sale to collapse because the home inspection uncovered major issues that would thwart their sale, which is why many opt for pre-inspection prior to listing their property for sale.
If a buyer decides to revoke their offer after home inspector finds an issue, you can try to negotiate a new contract or make repairs immediately; however, delays in scheduling these repairs could put you at a disadvantage.
As COVID-19 spreads across construction workers across the nation, inspectors may experience delays. This could impact your ability to meet deadlines and keep projects on schedule while delaying receiving results of inspections back. Therefore, it’s crucial that you select an reputable inspection company with enough inspectors on staff that can accommodate all of your requests for inspections.
3. Unexpected Issues with the Title
Title issues can be an unexpectedly troubling reality that often goes undetected by people. If previous owners failed to maintain accurate records and pay their mortgage payments on time, you could end up with an unknown lien placed against your property by someone claiming ownership at any moment. Other unexpected issues could include encroachments and boundary disputes which require time and expense before resolution – another reason why buyers and sellers alike should purchase title insurance as protection for their investments.
4.. Delays in Closing
There are numerous moving parts involved with buying and selling homes. A misstep by any party involved could cause closing to be delayed or cause the sale to collapse altogether.
For instance, if a mortgage lender discovers errors in a buyer’s credit report or additional debt that was never listed in their application, this can delay loan closing. Furthermore, property title searches that uncover issues like unpaid taxes or liens that must be resolved before deed transfer can delay closing further still.
Closing may also be delayed if buyers encounter plumbing or electrical issues upon their final walk-through inspection of a home, prompting sellers to offer concessions or make repairs that will help facilitate their purchase of it, which in turn postpones closing, but these types of delays tend to be relatively infrequent.
