In an ideal world, every real estate agent would be like a Fairy Godmother of home selling. Their industry expertise would take care of every hurdle, from repairs and staging to finding the perfect new family that is eager to buy your house. But in the real world, things aren’t always so easy or nice.
As someone motivated to sell a particular house, you are expected to trust your real estate agent completely. They are supposed to guide you through the complicated and obstacle-ridden path to a successful sale. They are supposed to fully grasp the logistical, legal, and marketing requirements to complete the sale and. And part of the reason you pay them a portion of the profit is because a real estate agent, supposedly, can save you from the headaches and setbacks of trying to handle the process on your own.
But it doesn’t always go as smoothly as we’d hope. Sometimes, your luck just turns and your agent did their level best to help. And sometimes the agent themselves fails to come through. But they still want their commission whether the sale was easier or harder with their help.
Today, we’re here to talk about some of the most common ways that a home sale can go downhill, even when a professional real estate agent is supposedly arranging everything for success.
Buyers Can’t Back Their Bid
By far the most common reason that a home sale falls through is inexperienced buyers combined with less-than-thorough real estate agents. Remember there are two agents involved in every sale, and technically both of them should ensure that a buyer is financially capable of completing a home purchase before entering the negotiation stage. But it often gets missed.
First-time buyers usually don’t fully understand how the finances work when buying a house, and will make a bid based on what they think their personal finances can afford. However, if they have not had this amount pre-qualified recently buy an available bank, then their bid means nothing. Some sellers see months wasted to negotiating with a buyer who, in the end, can’t get a bank to actually provide the mortgage to them. So the sale falls through and your back marketing for potential buyers again.
Competitive Bidding vs Bank Appraisal
But even if a bank has pre-qualified a home purchase within the buyer’s bid range, the bank might not actually approve the purchase of your house. Why? Because they only back mortgages for homes they feel are worth the buying amount. Before approving the mortgage, the bank will likely send an appraiser, someone who estimates what your house is really worth, not just what your buyer is willing to pay.
If the appraiser decides that the house is not worth the amount of the mortgage, the bank won’t feel that ‘owning’ the house is reasonable collateral for the amount of money they are putting up. And, in effect, the buyer will be denied a mortgage and your sale will fall through.
Buyers Back Out After the Inspection
A home bid with an inspection contingency is a lot like a job offer with a reference-check contingency. It’s like saying “I like everything about this house and will take up your time with negotiations and final-sale preparations. But if my inspector sees a spider, I’m out.”
In other words, inspection contingencies have a huge potential to waste your time. If you are going to sell through the usual channels, your real estate agent needs to make sure that buyers get their inspection before negotiations even start. If they fail to enact this step and inspection becomes a sale contingency in the contract, this is a great way to waste months and see a sale fall through when a known maintenance issue is ‘discovered’.
Simple Cold Feet
And some buyers just plain back out of a deal. This is often known as cold feet, or buyer’s remorse. Most home sale deals allow buyers to back out within the first week or two after the final papers are signed. This is to ensure that if there really are shady issues that are revealed or their finances suddenly take a turn for the worse, that buyers are not trapped in a purchase that will financially ruin them.
However, most of the time when buyers back out, the reason is just emotional. It turns out, after a month or more of negotiations and financial preparation, that they’re not really ready to commit. A good real estate agent can save you from this wishy-washy kind of sale failure, but it takes a real expert to predict when seemingly good buyers are going to bail at the last minute.
Home Sale Contingency
Another really serious problem with home sales, even ones that seem to be a sure thing, is the buyer’s home sale contingency. It’s not uncommon for people to plan on buying a house with the profits of the house they’re about to sell. This is a complicated financial and logistical maneuver and, in theory, it’s not a bad idea.
But no good real estate agent is going to put a home sale contingency into your selling contract. What this means is that no matter how motivated and ready the buyers are, they won’t be buying until their seller’s agent gets their home sold. So your entire process is now held up on someone else’s dubiously successful home sale. And you can’t even find new faster buyer because now you’re contractually bound to wait.
Negotiations Keep Falling Through
With a truly bad real estate agent (and there are a few out there) you may not even reach the contract phase for things to fall through at the last minute. Some agents can’t even get through the negotiation phase where everyone agrees on a price, terms, and a few reasonable contingencies.
You know you’re in a bad spot if your selling process keeps getting to the negotiation phase and falling through because you may never actually see closing documentation at all.
Property Title Complications
And even if you get to the closing paperwork with banks on board and everyone ready to sign, things can still go wrong! If your agent hasn’t done their job, there could be unknown liens or other restrictions on the property itself. Your agent should have either checked the title status for you or walked you through the process of doing it yourself
Title complications are especially common when you inherit a house that you didn’t buy and haven’t been managing financially. So it’s easy to officially own a house that also has liens on it that you had no idea about. Interestingly, buyers can also be stopped by this phase in the process. If they have outstanding debts or court orders that put liens on their finances and prevent the completion of the sale. Which their agent should have known about.
Real Estate Agent Wants a Bigger Cut
Finally, even if a sale goes all the way through, it might not be as profitable as you’ve been hoping for. Traditionally, your seller’s agent will want about 5% of the final selling price as their commission for helping. And if they really have facilitated a fast, profitable sale, most sellers don’t mind paying the cut. But 5% isn’t mandated by any agent or broker regulations, it’s just standard.
There is always a possibility that your agent will ask for even more than the traditional cut, even if they weren’t helpful and allowed obstacles to cause problems at every turn. You might even find that that bigger cut has been in their contract the entire time, unmentioned in small print, to catch you at exactly this moment.
Selling a house through the usual agent-run channels is not always the best choice for a homeowner eager to get a house off their hands. Especially if you don’t want to invest in repairing, repainting, and staging the house the way real estate agents usually recommend.
If you really just want to get an unwanted house sold with no delays, hassles, or unexpected fall-throughs then we have the answer for you. Here at Seller’s Advantage, we will be happy to buy that troublesome house quickly and for cash. No drama over mortgage approvals, no buyers with cold feet. And you won’t have to pay utilities or property tax for every month it sits on the market.
For a no-obligation inspection and consultation on the house you want to sell, contact us today! We’re ready to check out your house and give you a cash offer. No setbacks. No problem.