By far the biggest reason that offers fail is that buyers don't get mortgage approval. This can happen for a variety of reasons. Maybe your credit score was too low, or maybe your debt-to-income ratio is too high. Whatever the reason, it means you won't be able to get the loan and you'll have to cancel the offer.
There's nothing more disappointing than thinking that the sale of your home is a done deal, only to have it fall apart in the final stages of the process. A closing can fail for many reasons, such as surprise title insurance, rejection of financing by buyers, failed inspections, and low appraisals. Even buyer's remorse can ruin a deal. During the time your home is pending, a lot happens, such as the buyer and seller working together with their real estate agents to resolve any contingencies.
If you see the word “dependent” in your ad, it means that the buyer is looking at any contingency that will be part of their offer, such as a financial contingency, a home inspection contingency, or a contingency of the sale of the home by the buyer. We'll talk more about them below. Once a prospective homebuyer finds a home they love, they'll typically order a property inspection to make sure everything is working properly. A home inspection contingency allows potential buyers to renegotiate the price or leave because of the worrying elements contained in the inspection report.
One of the most common reasons why a transaction doesn't go under collateral is that the buyer's financing fails. In general, if a buyer has received prior approval, a change in their situation, such as a difference in employment, a new negative credit problem, the accumulation of additional debts, or a change in the lender's guidelines, can cause the lender to cancel the financing. In cases where a buyer needs to sell their current home before they can buy a new one, they will submit an offer with a contingency of selling the home. This means that they can withdraw their offer if their current home doesn't sell within a certain period of time.
And while it may not completely ruin an offer, a contingency with the sale of a home by the buyer can cause the sale to be pending for a long time.