Sunday, October 7, 2007

Three Reasons Your Contract Might Fall Apart

You did it....after a few months of having your home on the market, you now have it under contract and you are on your way to closing...or are you?

This article for Zillow Wiki explains the three reasons why your contract might fall apart before closing. Here are the reasons:

1. You have a contract with an unqualified buyer.

Most of the time, home sellers accept offers without asking if the homebuyer is qualified or not. Then, the home seller finds out several weeks later that the homebuyer couldn’t get the mortgage loan. In this case, you not only have to let the buyer back off, but also have to refund the earnest money to the homebuyer. Always ask for a lender pre-approved letter accompanying any offer. Although you cannot be 100% sure, at least, you know that most of your potential homebuyers are capable buyers. This move could decrease the chance of the offer falling apart.

2. Homebuyer receives negative information about your home.

The home inspector found out something negative about your home and it was not disclosed in your seller disclosure form. Disclosure laws vary from state-to-state. If you didn’t disclose something required by law, a buyer can back out of the contract and you have to release the earnest money to the buyer.Make sure you disclose everything required by law about your home. If you think there is something negative about your house and can be fixed, you may want to fix it first before you put it on the market and disclose it as the problem fixed.Sometimes, ordering a pre-inspection may make sense for some older houses as a proactive measure.

3. You have a contract with a qualified buyer, but the closing terms are too long.

If you have a contract with a qualified buyer, but there are three months to close, the chances of the deal falling apart may be much higher than a contract with a term of one month to close. Nobody can predict what could happen to the homebuyer during this 3-month period.The way to stop possible falling apart of the deal is to avoid a long close of escrow. The shorter the escrow is, the better it is for you from this standpoint. But, it has to be reasonable and acceptable by both parties.

Working with qualified real estate professionals like the Hamilton & Co. Group of Keller Williams Realty will help you avoid these nasty pitfalls as you get your home sold.

No comments:

Clicky Web Analytics