Sellers How To Stop Your Deals Falling Apart

An interesting article posted by the Real Deal an online real estate focuses magazine reports that June saw an increasing number of deals falling out of contract.

What’s going on here? Lawrence Yun, the chief economist of NAR, said the sudden spike is surprising and worrisome, and that there are no hard statistics available on the causes. The most likely suspects, Yun said, are lowball appraisals and tough mortgage underwriting rules that knock buyers out of contracts through mortgage contingency clauses.

Full article here.

It can be extremely frustrating for a seller to have their home go under contract and then fall out because of something out of their control. Here are some tips to avoid it happening to you.

Get An Appraisal Done independently before deciding to list you home. Homes are falling out of contract because banks will not lend at more than the appraised value. As a seller if you have an appraisal done you will know roughly what a bank lending money to a new buyer would be advised of it’s value. This allows you to price it fairly.

Get An Inspection Done before listing your home. Buyers still feel like they have the upper hand in this market. If you a long list of repairs comes back from the home inspection they often come back with significant demands. To avoid your home falling out of contract due to inspection items get all the minor issues fixed before listing for sale. AN inspection report is often very long and intimidating but many of the issues on it can be cleared up by a handyman in under an hour.

Pick well qualified buyers. Mortgage underwriting is super, super stringent at the moment. While you can’t know the full financial history of someone putting an offer on your home you can verify one thing. How much money they are putting down and where that money sits right now. It’s not always possible to look for an all cash buyer for every property but if you look for a buyer who has 15% or more down and also you can verify that those funds are fully liquid. Buyers can be over confident of passing the underwriting requirements of a mortgage company causing the home they are attempting to buy to fall out of contract.

As a seller the more obstacles to closing a sale smoothly you can remove gives more power to you. Spending a little money in advance of a listing can mean a more profitable transaction in total. If a property does drop out of contract it adds to the total days on the market when the property is under offer and not being considered by other buyers. Also be sure to know all subsequent buyers will enquire as to exactly why the property dropped out of contract first time round.