“Time and tide wait for no man” (or woman) and that old saying goes for house sales too. The most upsetting call a seller can get is when they are told, “Sorry, the buyer walked away.” Apart from the disappointment, the plans crashing down, and the loss of immediate and depended-on money, the whole process of advertising, holding open houses, and keeping everything ready for showings has to start all over again. And some sellers even have that happen twice. Time really is the enemy. Time can kill homes sales for two common reasons:
- The buyer gets what people call “buyer’s remorse.”
- One of the professionals involved in the post-contract process discovers a problem. For example, one of the home inspectors discovers an unknown and unexpected problem. The appraisal may come in low or the mortgage lender discovers a problem caused by the buyer. The title company may discover a problem that, at first sight, does not seem to have anything to do with the property, itself.
Let’s look at each one, and see how “time” allowed the problem to happen.
Many buyers walk into a house and it “speaks” to them. They make a spur-of-the-moment decision, and their real estate agent sees dollar signs, says the right things and the offer is written up and presented.
Let’s break that down. Many people love their new home, and all goes smoothly. The little hiccups that inspectors discover are accepted or ignored. But, and it is a big but, the second most common reason a property goes on the market is that the owner bought the “wrong” house. Real estate professionals know that, but most buyers do not because they do not buy homes often enough. That statistic would be even higher if buyers realized their mistake sooner. After buyers write the offer and it is accepted, things happen. The buyer feels good about choosing their new home, then:
- They speak to someone who pours cold water on the idea. An elderly relative worries that it may be too far away if they need help in time to come. The children speak to their friends and worry they will lose them or have to go to a new school.
- The buyer recalculates commute time or how much more after-school time they will spend ferrying children to sports games and practices (so they can keep playing for their old teams.)
- One of the buyers loses their job so cannot get a mortgage, or gets a promotion, so they decide they can buy a bigger property, or they get transferred to a new job and must leave town. Or the other thing happens and new job falls through so they can’t move to the new town and buy this home.
- The buyers just see another house they prefer.
- The buyers realize what a big decision they have just made, and perhaps they should rethink it for a while.
As many as one house sale in ten falls through just because the buyer slept on it, met someone, had a change in circumstances, or they saw a different property that had just come on the market or that their agent hadn’t shown them before.
Every one of these examples is real and almost every one (genuine emotional remorse being the exception) happens after more than a week of signing the contract. The more time they have the more likely time will kill the sale.
A Professional Finds a Problem
The Home Inspector
Most buyers have at least one home inspection to check the safety and functionality of the property. Older properties have more problems than newer ones, especially to do with things most owners never check. The roof, the HVAC system or the electrical system being three obvious examples.
A buyer may, as well as a mechanical inspection, have a wood destroying organism (WDO) inspection, that most people just call a termite inspection. The inspection includes more than termites, hence the name – anything that destroys wood. They may also have a radon inspection and a mold inspection. Some buyers, or the mortgage lender, may want lead paint or “Chinese drywall” inspections done just in case dangerous materials were used at some time.
On top of that many buyers get an FHA or a VA mortgage. Both of them require the property appraiser to carry out a safety and mechanical inspection, to meet government guidelines. Few sellers understand these government guidelines, so cannot prepare for them ahead of time.
All inspections take time and they can all throw up a problem which results in the buyer either wanting to drop the price or get the seller to pay for repairs and replacements. Or they just walk away because this problem may just be the last straw.
The Appraisal is Low
Lenders agree to lend a certain percentage value of the property, so they have an appraisal done. Many real estate agents know that to get the listing, the seller will go with the agent who gives them the highest listing price based on the comparative market analysis (CMA.) The appraiser does not care what the agent did, they have their own software to do a very detailed market value calculation based on actual, recent home sales and predetermined features.
Sometimes, in a short space of time, markets do collapse because of an unexpected neighborhood event, but sometimes the appraiser just comes up with a true and fair valuation that kills the sale because it kills the mortgage.
Lenders and buyers want title insurance to cover themselves against unseen and unknown problems of ownership. The title agent carries out detailed searches that go back to when the land on which the house is built was first acquired. Most negative discoveries can be fixed (and may take more time than anyone expected) but some cannot be fixed in time to meet the buyer’s move-in requirements.
Time can kill a home sale in a different way. Some homes have been owned for many years. Today’s title searches are computer- and internet-based so they are often more detailed than before. As a result, they can expose an error dating back to the early chain of title. These errors must be corrected and may take a long time, especially if, the error concerns an owner who has died or cannot be found.
The mortgage lender has the property appraised, and also double-checks on the borrower. If the seller insisted on a high price but the house doesn’t appraise, as mentioned above, then the sale collapses. If the buyer is pre-approved for the mortgage, then has time to go and max out their credit card, or starts buying furniture on credit, that can affect their credit score or the pre-approved income-to-expenditure ratio, so the lender can cancel the mortgage, and the sale falls through.
In summary, then, time gives buyers a chance to think and rethink, sometimes they just need “one more little problem” to help them change their minds. sometimes time gives the professionals time to do their jobs properly, and they discover problems that kill a sale.
The best solution is to cut out the “time problem.” One way to do that is to work with a professional who can handle everything quickly, simply and get you to the closing table ASAP. If you would like to learn more, then please click this link to contact Seller’s Advantage online or call us at 1-800-208-3243 to get a no-cost, no-obligation quote on your home. We purchase homes in AS-IS condition and can give you a cash offer in as little as 24 hours.