Buying a House - 7 Reasons Why Real Estate Deals Fall Apart
Buying a House - 7 Reasons Why Real Estate Deals Fall Apart When Buying a House
Real estate agent and Realtor Matt Leighton talks about the seven main reasons that real estate deals fall apart.
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Buying a House for the First Time - 7 Reasons Why Real Estate Deals Fall Through
0:40 - 1. Home inspection issues. The buyer could ask for an unreasonable amount of items or the seller could refuse to fix or provide a credit for home inspection items.
2:26 - 2. The buyer's financing gets rejected. If the buyer adds a lot of new debt or loses their job or their DTI (debt-to-income ratio) increases above a certain level, the buyer may get rejected for the loan.
3:17 - 3. Low appraisal. The bank will send out an appraiser to confirm the property's value. If the appraiser tells the bank the property is actually worth less than the contract price, the buyer and seller have to renegotiate. If the buyer and seller do not come to an agreement, the buyer could back out of the contract.
5:10 - 4. The buyer gets cold feet. The buyer changes their mind and backs out of the deal.
6:21 - 5. Title issues. It is the seller's responsibility to transfer a good an marketable title. If there are liens or judgements against the seller, it is possible that the seller is not able to transfer the property until those judgements or liens are paid off. And if the amount owed is higher than what the seller would receive when selling the property, the seller might not be able to sell unless they "bring money to the table" to satisfy any outstanding judgements or debts owed.
7:51 - 6. The buyer doesn't have enough money for closing costs. This happens when the buyer is tight on finances or an unexpected cost like a hospital bill came up right before closing. If you don't have money for closing costs, you could ask relatives for gift funds (where they give you money for settlement), you could negotiate in buyer closing costs paid for by the seller, or maybe you should wait until you have money to pay for closing costs before purchasing a home. Especially if you're a first time home buyer, it's wise to save for unexpected costs and expenses.
9:25 - 7. Buyer's house does not sell. If the buyer needs the funds from their house to purchase their next property and their current house is not selling, then the deal could fall apart. We're not really seeing Home of Sale Contingencies as much these days since the market is so competitive. But if a buyer's house isn't selling, it may cause their purchase deal to fall apart.
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Matt Leighton - Arlington VA Real Estate Agent
Matt [at] Orange Line Condo dot com
Century 21 Redwood Realty
1934 Wilson Blvd
Arlington, VA 22201
• Buying a House - 7 Rea...
Пікірлер: 56
Always great info, thank you
Ultra useful. Thanks!
@TheMattLeighton
4 жыл бұрын
Thank you MJ!
Always great video, script and gold information
@TheMattLeighton
4 жыл бұрын
Thank you so much! 🙏
Solid content
Thank you so much for these amazing tips👍
@TheMattLeighton
4 жыл бұрын
Thanks Max! I appreciate you watching 🤙
@MaxKito2
4 жыл бұрын
@@TheMattLeighton Actually thank you... I always appreciate your videos and very useful information. Keep up the great work. 👍
I've "turned" an appraisal but it's hard & uncommon. In one case I prepared comparables for the appraiser to lead them where they should be looking. Appraisers have to use Sold comps which can create difficulties in a competitive market where prices are rising quickly & sold comps can't quite keep up with that. There's a month or two of lag time.
Thank you , Before I put my first listing in the market I watch your video to get more information, its very helpful and understanding , thank you Matt
@TheMattLeighton
4 жыл бұрын
Thank you for watching! Best of luck with your listing!
Some of these problems can be overcome with creative finance or owner finance and that is what I learned as a real estate investor. Often if there was no equity, too many repairs, or credit issues I would structure a lease-purchase deal with the buyer putting down at least $10K and we would temporarily finance the deal for 3-5 years. This would allow the buyer time to fix their credit issues, property repairs and the property to appreciate.
@TheMattLeighton
4 жыл бұрын
Very creative! And a great way to save the deal
nice video!
@TheMattLeighton
4 жыл бұрын
Thank you Mr. Z!
@shawnbattle
4 жыл бұрын
Great video Matt! We are going through a low appraisal right now :-) the right lenders are key, make sure if you were buying that you are using a local lender With local appraisers that know the market.
@TheMattLeighton
4 жыл бұрын
@@shawnbattle local lenders make all the difference!
I am on a backup clause in case the first offer doesn't get the finance approved. These are good tips.
@TheMattLeighton
3 жыл бұрын
Thank you!
What about the appraisal on new construction
I hit the like button
@TheMattLeighton
3 жыл бұрын
Thank you!
Could you do a video about buying a house that had modifications such as a DIY finished basement with no permits.
@TheMattLeighton
4 жыл бұрын
Good suggestion! I'll look into that
I’ve had just about all of these. Or the buyer wires their downpayment to a phishing scam which I’ve also had. Always get 2 step authentication...
@TheMattLeighton
4 жыл бұрын
Yeah I bet your list of why deals fall apart could be like 20 items long! You've seen some crazy deals go sideways
Aren't deal killer or independent inspectors good for buyers?
@TheMattLeighton
4 жыл бұрын
Yes and No. You definitely want an inspector who will tell you all the negative things about the property. I'm referring more towards inspectors that exaggerate, stretch the truth or just plain don't know what they're talking about.
Great Video! What about if a buyer finds out that the well collapsed in the condo building & the entire bld had no A/c & listing agent did not inform buyers agent. Buyer wanted for seller to pay for costs or assessments before closing. Seller said no & buyer backed out of contract?? Can buyer get their deposit back?
@TheMattLeighton
4 жыл бұрын
Buyer can get deposit back if the seller is in default of the contract or if the buyer backed out during a contingency period (home inspection, condo Doc review period, etc)
@carolinadiaz2239
4 жыл бұрын
Matt Leighton but this issue occurred a week before closing. The president of the board is also the listing agent & listing agent said she did not know how this was going to be paid. An addendum was given to seller for the expense to be taken care of before closing & seller refused to sign & buyer decided not to move forward with the closing. Can seller keep deposit? Or in this very special case buyer get deposit back?
@TheMattLeighton
4 жыл бұрын
Good question. The property has to be delivered in the same general condition as when the offer was written (check your contract to be sure). If the property is not in the same general condition, then the buyer can request the associated repairs. Seller doesn't have to fix it, but buyer doesnt have to sign either if the property is not what was advertised (i.e. AC not working) or property was damaged (i.e. well collapsed). Would look into getting a real estate attorney
@carolinadiaz2239
4 жыл бұрын
Matt Leighton thank you!!
Can you pay closing closet cash or credit card ?
@TheMattLeighton
Жыл бұрын
Straight cash
@sondersrn8061
Жыл бұрын
Your videos are outstanding, thank you 😊
I am buying my first home right now and it’s so stressful. We just had the appraisal but not having that definitive answer yet is killing me.
@hungrybeing
4 жыл бұрын
Step by step and it'll go smoothly 😊
@TheMattLeighton
4 жыл бұрын
The appraisal is one of the most stressful parts of the process. Did they tell you when you expect to receive it? It should come back within about a week of when the appraiser goes out to the property.
@AndyElliottrealtor
4 жыл бұрын
I am DYING to know! How'd things turn out?
@insomniareflection8569
3 жыл бұрын
One year later. Katie how did it go .
@ryanb.6498
Жыл бұрын
Good luck
Buyers need to get more creative when trying to buy houses
@TheMattLeighton
4 жыл бұрын
Say a little more about that
@hungrybeing
4 жыл бұрын
@@TheMattLeighton Doubling down on all the points you made like asking repair credits. That's a way of being creative with with the offer
@TheMattLeighton
4 жыл бұрын
@@hungrybeing I hear ya!
What if buyer starts new job in middle of closing you didn't cover that
@TheMattLeighton
3 жыл бұрын
That's a good point. And not advisable for the buyer to switch jobs in the middle of closing
@tfran235
3 жыл бұрын
@@TheMattLeighton why
@TheMattLeighton
3 жыл бұрын
Lenders approve you based on your current job and pay stubs that show you have been at that job for a steady period of time. If you switch jobs during the loan process, that may have a negative impact on getting approved. Further more, if you switch from a salaried position to a commison-based position, or if you go from being a W2 employee to being self employed or a 1099 contractor, that could causes issues as well. If you get a raise to a new position in your company or if you change to a similar position with a similar pay structure, you may be in the clear.
@tfran235
3 жыл бұрын
@@TheMattLeighton I've been struck in underwriting for over a month to no fault of my own. just got a great job offer making way over my current job salary I'm starting in a week. My life's been on pause waiting on this lender to move the needle to clear to close
@TheMattLeighton
3 жыл бұрын
Sorry to hear that. Hopefully your lender will be able to close soon