Ideally, the buying process should go smoothly, but that is not the reality. It is common to makes blunders that can only be overcome by the good guidance you receive and the willingness to cooperate with all the people involved in the sale i.e. the seller, the banks of both parties and the title company. Some of the most frequent situations that can affect the purchase of a property are as follows;
1 – Valuation is less than the selling price.
If you are buying with mortgage loan, the bank will only lend you the amount of valuation or the selling price, whichever is lower. If the property rates less, the buyer has to put that difference, which is usually not possible and making a successful sale is not achieved.
2 – Problems in Inspection
A certified inspector can see far beyond the simple sight of a buyer, therefore, he can find the defects or structural problems that affect the property. In many cases, the buyers decide to continue with the purchase, but in others of severe problems or very expensive repairs, they give up, requesting a refund of their deposit if that is established in the offer they made.
3 – Do not approve the mortgage loan!
When making an offer, you must have a qualification. Once accepted, the loan originates and the official qualification is received. If during the process there are changes in the credit such as request for new loans or arrears or employment such as loss or decrease in income, your loan application may be denied. Usually the offer indicates if the purchase is subject to credit approval.
4 – They ask for more money than planned.
When making the offer, you must have a clear idea of the money you will need. There you will know the price of the sale and the expenses that correspond to you as buyer. The bank you select will give you an ‘Estimated Good Faith’ with the expenses you will have at closing. That amount can vary by factors such as increase or decrease in interest, closing date and mandatory insurance. It is a good idea to have a reserve for contingencies.
5 – The time of the contract was exhausted.
Each contract includes a closing date. If the transaction is not ready by that date, all the parties involved must agree on an extension. If no notice of change is made and received, it is understood that there will be no sale and you, as a buyer, will lose your rights and deposit. This is why frequent communication among all parties is the key. In some cases, a penalty is established for the buyer, pending that clause when signing the offer.