You may have found the ideal buyer but don’t rejoice just yet. Property experts point out that one out of four property deals tend to fall through at the last minute.
When “X” put his home on the market, he found an interested buyer almost instantly. However, the buyer backed out of the deal just days before it was to close, citing personal reasons. While this took “X” by surprise, it is not unusual for property sales to fall through at the last moment. The reasons for the same can be numerous, but unsuccessful inspection and financial woes are believed to be the most common. No matter the cause, failure of a deal is something every seller wants to avoid. Understanding the market and being aware of common selling mistakes can help a seller increase the chances of successfully sealing a transaction.
Proplistings has made a list of the top four reasons for last minute failures of real estate deals:
Faults are discovered during inspection
In a large number of cases, during site visit or inspection, a buyer cancels the deal because he discovers hitherto unknown defects in the property. Poor design aesthetics, leakages, seepages, mold or pest infestation, and faulty installations are some of the oft quoted reasons for a buyer’s visit ending unsuccessfully. Undertaking regular maintenance and carrying out repair activities before a buyer’s visit will help ensure that the property leaves a lasting impression on the homebuyer’s mind.
Finance arrangements fall through
Majority of Indians depend on external financing for big-ticket purchases such as a home. This makes rejection of loan application a major reason for property sales falling through at the last minute. The reasons for a bank rejecting a loan application may vary from a poor track record to incorrect details. Further, if a buyer intended to fund the purchase through savings, contingencies such as a family emergency can ruin his plans. Sellers are advised to discuss with a prospective buyer if he has a pre-approved loan and how he plans to finance the purchase if he fails to secure a loan or gets a reduced amount of loan sanctioned.
Buyer finds a better property
It is quite common for a buyer to come across a better option after committing to buy another property at the same budget. In this scenario, the seller may offer a lower price or additional benefits to the buyer. This is why sellers are advised to not decline other prospective buyers until paperwork has been done.
Unforeseen circumstances arise
Job transfers, an unplanned divorce, and sudden medical emergencies are some of the circumstances that can cause buyers to change their mind about the purchase. It is also possible that a buyer’s requirements from the property changes due to a change in lifestyle or family composition. Further, a first-time buyer might get cold feet about the responsibilities that come with owning a property.