When home purchase contracts are not settled on time, a total of 22% are delayed, but are eventually closed. Only 5% of contracts are terminated, and the most common reason is that buyers are unable to obtain financing. Sometimes, a pending sale has contingencies. This means that the buyer or seller has specific requests as part of their offer that must be fulfilled.
For example, a buyer could include a home inspection contingency, which would allow them to backtrack on the deal if they feel that a major repair is needed. Another common contingency relates to buyer financing, which requires the buyer to be eligible to receive financing to complete the sale. As each of these elements is satisfied, the process moves closer to the finish line. A low valuation is common in a seller's market when home inventory is limited, USA Today reports.
Buyers often enter into a bidding war, raising the price beyond the value that the appraiser assigns. If the difference between the amount of the offer and the assessed value is substantial and the buyer cannot get more cash, he will likely use the financial contingency clause to leave. Before closing, the buyer's mortgage lender will require a title company to investigate the property to ensure that the title is clean. They are looking for outstanding liens or judgments, such as unpaid property taxes or unpaid work by a contractor.
Give them a list of the improvements you've made to your home, CNBC recommends. Make a list of all the repairs you've done since you bought the house, such as replacing the boiler or installing a new roof. Some of the improvements that could be overlooked in an appraisal include the installation of high-end appliances and custom built-in elements. Walkable communities rank high in the search criteria of many homebuyers because they want to live in areas with easy access to public transportation, schools, shopping and entertainment, reports the Washington Post.
You also have more control over the chronology. You can choose to close in as little as 14 days and up to 60 days. Learn more about how we value your home and how the process compares to a traditional sale. You read earlier that 3.9 percent of residential property transactions fail.
And, when the closing table is in sight, your possibilities are already much greater. However, some things can prevent a loan from being closed. You may have lied on the application, that interest rates will rise significantly, your employment situation may change, or your credit rating may go down. Ask your lender how you can avoid problems like these.
In addition, potential lenders owe you an explanation in case the funding fails. Race, religion, and national origin should never delay anyone's dream of homeownership. In the case of homes in good condition, the percentage of contingencies that are not met is around 75%. In the case of houses in poor condition, the percentage of contingencies that are not met is approximately 90%.