Those shopping for a new home may not have a clear idea of what to do if a promising home sale falls through. This is a potential problem for anyone buying a home, although first-time buyers may have a more difficult time with this type of event.
A real estate agent can help buyers prioritize following such a situation, as well as guide them through additional real estate listings to discover prospective homes to check out. Typically, both home buyers and sellers deal in good faith, but even when that is the case, unforeseen circumstances can prevent a deal from concluding successfully.
When a Deal Fails
The first matter for most buyers to handle is to get back their earnest-money deposit, although the reason the deal is called off may determine their ability to do so. Buyers may change their mind about buying a home due to facts revealed in a home inspection or appraisal. If there is a contingency in the contract that allows the buyer to cancel the deal based on such an event, then the deposit will typically be returned.
If not, however, then the buyer’s decision to cancel the deal may mean writing off the deposit. Deals commonly have a provision allowing the buyer to back out if a final inspection reveals some previously unknown problem with a home, or at least allowing the details of a deal to be renegotiated.
For example, buyers may wish to negotiate a different price if it becomes apparent that a home’s insulation is lacking, since they will have to pay for new insulation in order to restore the home to reasonable condition. It is important to ensure a contract has provisions for these circumstances.
Preparing for Purchase
A different possibility is that the buyers may not be able to get as much financing as they expected or need for the purchase. Another common issue that may arise is that a lender’s appraisal may affect the financing they are willing to provide based on the estimated worth of the home. One real estate professional told Bankrate that another point that may not come up until the end of a deal is the approval of a homeowners association or similar organization.
Additionally, buyers may find that state and local real estate laws and practices affect who holds deposits and how contracts are typically constructed. When continuing the home buying process after a failed deal, one expert told Bankrate, buyers with financing trouble may need to wait a while or reconsider their price range before moving on.
If you have questions about the home buying process tweet to us at @Coldwellbanker.
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