3 Reasons Homes Don't Make It To Closing
Buying a home can be a complex process, with multiple factors that can affect whether or not the sale goes through. While some home purchases go smoothly and close on time, others can hit roadblocks and fall through. Here are three common reasons why homes don't make it to closing.
1. Inspection Issues
One of the most common reasons that homes don't make it to closing is inspection issues. Before closing on a home, buyers will typically have an inspection conducted to identify any potential problems with the property. These issues could range from minor repairs that need to be made to major structural issues that could make the home unsafe to live in.
If the inspection uncovers problems with the home, the buyer may ask the seller to make repairs or to provide a credit so that the buyer can make the repairs themselves. If the seller refuses to address the issues or if the buyer feels that the repairs are too extensive or expensive, the sale may fall through.
2. Appraisal Challenges
Another reason that homes don't make it to closing is appraisal challenges. When a buyer applies for a mortgage to purchase a home, the lender will typically require an appraisal to determine the home's value. If the appraisal comes in lower than the purchase price, the buyer may be unable to secure financing for the full amount.
In this scenario, the buyer and seller can negotiate to lower the purchase price or the buyer may need to come up with additional funds to cover the difference. If the buyer is unable or unwilling to do so, the sale may not go through.
3. Change of Heart
Sometimes, homes don't make it to closing simply because the buyer has a change of heart. This could be for any number of reasons, such as a job relocation, a change in financial circumstances, or a desire to purchase a different property.
If the buyer decides not to move forward with the purchase, the seller will typically keep any earnest money that has been put down. This is a nonrefundable deposit that the buyer puts down to show that they are serious about purchasing the home. The amount of earnest money can vary, but it is typically around 1-2% of the purchase price.
In conclusion, there are several reasons why homes don't make it to closing. Inspection issues, appraisal challenges, and a change of heart are just a few of the factors that can affect whether or not a sale goes through. As a buyer or seller, it's important to be aware of these potential roadblocks and to work with your real estate agent to address any issues that arise. By doing so, you can increase your chances of a successful sale and a smooth closing process.