3 Hurdles To Closing On A Home

    Pixabay
    Pixabay

    Talk to enough homeowners and you will inevitably hear various stories about things that have gone wrong during a home closing. Somewhere between the offer and the actual closing date, something happened to delay or end the whole process. The truth is, these experiences don’t happen every time a house is bought or sold. However, hiccups do occur, and it’s always best for home buyers to be aware of the potential problems that could take place.  So, here are 3 hurdles to closing on a home that homebuyers should know about and some tips for how to handle them.

    Hurdle 1: Financing Falls Through

     

    In Nashville’s current real estate market, financing issues are still the main reason home closings fall through. With tighter loan underwriting standards, most homebuyers aren’t making offers on a home until they are pre-approved, which means they have a written loan commitment from a bank. This is still not the same as pre-qualified though and underwriting and closing costs could prevent homebuyers from qualifying. Home sellers should look for buyers who have already gone through this process.

    Tip: In certain areas of Nashville, the sellers can be more choosey because they’re likely to have multiple offers. If you’re looking for a home in East Nashville, Franklin, Murfreesboro, or any other hot market, it’s best to get pre-qualified for an exact amount so you know what you can offer. The pre-approval may be the difference between your offer being accepted or rejected.

    Hurdle 2: Inspection Issues

     

    Another common hurdle to closing on a home? When the home inspection report reveals large issues and homebuyers and sellers are unable to reach a resolution. Usually, the homebuyer is able to back out of the offer when major defects are revealed since most offers are contingent upon the inspection. Unfortunately, these issues can catch everyone unaware, including the seller who must decide if they are willing to negotiate a lower price or if they plan to fix the issue themselves. Occasionally homeowners will hire out an inspection prior to listing a house for sale, in an effort to avoid problems at closing.

     Hurdle 3: Home Doesn’t Appraise

     

    So, you just found an adorable house in Nashville, made your offer and are all ready to move. Except that the bank doesn’t see the home in the same light and the home doesn’t appraise for the amount you need for the loan. This can be one of the toughest hurdles to closing on a home. The bank needs the home to appraise for what you are willing to pay for it, so that IF foreclosure were ever to take place the bank could recoup the loan amount. This can be an issue in rising markets where the comps don’t support the increased real estate market just yet. Options here are for the home seller to reduce the asking price, challenge the appraisal, or to keep the asking price the same and require the buyer to pay the difference in cash. Obviously, any of these could cause potential home buyers to walk away from the house for sale. To avoid appraisal issues, work with an experienced REALTOR who can provide insight on the appropriate pricing on a home for sale.

    Although hurdles to closing on a home aren’t part of each homebuyer’s experience, they do happen. However, these 3 hurdles are the most common and a strong real estate agent can help guide you right through these hiccups should you encounter one.

    Thinking about listing your Nashville home? Call us today to discuss the right approach to selling your house and we can help you avoid these hurdles!

    Interested in seeing what’s currently available in the Nashville real estate market? Call DeSelms Real Estate today at 615.550.5565!

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