105 Things That Could Go Wrong During Your Real Estate Transaction
Many times people don't realize there is so much more that goes into selling or buying a home than just sticking a sign in the yard or finding the right home, and writing an offer.
Knowing how to handle the many obstacles that can arise makes the difference in whether you make it to the closing table or not. This is where a great agent can be worth their weight in gold!
We've put together a list of 105 things that could go wrong during your real estate transaction. And honestly, this isn't even an exhaustive list since every transaction is different.
1. Does not tell the truth on loan application. (Did not go through the Pre-Approval process to get fully approved with a reputable lender to see any discrepancies.)
2. Has recent late payments on credit report.
3. Finds out about additional debt after loan application.
4. Borrower loses job.
5. Co-borrower loses job.
6. Income verification lower than what was stated on loan application.
7. Overtime income not allowed by underwriter for qualifying.
8. Applicant makes large purchase on credit before closing.
9. Illness, injury, divorce or other financial setback during escrow.
10. Lacks motivation (gets 'cold feet').
11. Gift donor changes mind.
12. Cannot locate divorce decree.
13. Cannot locate petition or discharge of bankruptcy.
14. Cannot locate tax returns.
15. Cannot locate bank statements.
16. Difficulty in obtaining verification of rent.
17. Interest rate increases and borrower no longer qualifies.
18. Loan program changes with higher rates, points and fees.
19. Child support not disclosed on application.
20. Bankruptcy within the last two years.
21. Mortgage payment is double the previous housing payment.
22. Borrower/co-borrower does not have steady two-year employment history.
23. Borrower brings in handwritten pay stubs.
24. Borrower switches to job with a probation period.
25. Borrower switches from job with salary to 100% commission income.
26. Borrower/co-borrower/seller dies.
27. Buyer is too picky about property in price range they can afford and gets in contract with a house they can't afford.
28. Buyer feels the house is misrepresented.
29. Veterans DD214 form not available.
30. Buyer comes up short of money at closing.
31. Buyer does not properly “paper trail” additional money that comes from gifts, loans, etc.
32. Buyer does not bring cashier’s check to title company for closing costs and down payment.
33. Buyer changes their mind and doesn't want to buy the house.
34. Buyer does not have cash to cover any appraisal shortage.
35. Goes MIA and won't respond to any communication.
36. Loses motivation to sell (job transfer does not go through, reconciles marriage, etc.).
37. Cannot find a suitable replacement property.
38. Will not allow appraiser inside home.
39. Will not allow inspectors inside home in a timely manner.
40. Removes property from the premises the buyer believed was included.
41. Cannot clear up liens – is short on cash to close.
42. Did not own 100% of property as previously disclosed.
43. Encounters problems getting partners’ signatures.
44. Leaves town without giving anyone Power of Attorney.
45. Delays the projected move-out date.
46. Did not complete the repairs agreed to in contract.
47. Seller’s home goes into foreclosure during escrow.
48. Misrepresents information about home and neighborhood.
49. Does not disclose all hidden or unknown defects and they are subsequently discovered.
50. Refuses to fix any lender-required repairs and lender won't approve loan for the property.
51. Refuses to pay for any lender-required fees for buyer loan.
The Realtor (s):
52. Has no client control over buyers or sellers.
53. Delays access to property for inspection and appraisals.
54. Does not get completed paperwork to the Lender in time.
55. Inexperienced in this type of property transaction and/or does not know how to solve problems to get to closing.
56. Takes unexpected time off during transaction and can’t be reached.
57. Misleads other parties to the transaction – has huge ego.
58. Does not do sufficient homework on their clients or the property and wastes everyone’s time.
59. Does not communicate with buyer/seller/title/inspector/appraiser/agent during transaction and delays closing or causes closing to fail.
60. Does not know how/what to negotiate different items during the transaction.
61. Does not have a working knowledge of contracts and forms to properly guide and protect the buyer/seller.
The Lender (s):
62. Does not properly pre-approve the borrower.
63. Wants property repaired prior to closing.
64. The market raises rates, points or costs.
65. Borrower does not qualify because of a late addition of information.
66. Lender requires a last-minute second appraisal or other documents.
67. Lender loses a form or misplaces entire file.
68. Lender doesn’t simultaneously ask for all needed information.
69. Lender doesn’t fund loan in time for closing.
70. Will not approve septic system or well.
71. Termite report reveals substantial damage and seller is not willing to fix.
72. Home was misrepresented as to size and condition.
73. Home is destroyed prior to closing.
74. Home is not structurally sound.
75. Home is uninsurable for homeowner’s insurance.
76. Property incorrectly zoned.
77. Portion of home sits on neighbor's property.
78. Unique home and comparable properties for appraisal difficult to find (won't appraise for sales price).
79. Survey is not approved by title/lender.
80. Incorrect square footage, which can affect pricing and appraisal.
81. Mineral rights are not properly retained.
82. Excluded items in home were not written in contract.
The Title Company:
83. Fails to notify lender/agents of unsigned or unreturned documents.
84. Fails to obtain information from beneficiaries, lien holders, insurance companies or lenders in a timely manner.
85. Lets principals leave town without getting all necessary signatures.
86. Loses or incorrectly prepares paperwork.
87. Does not pass on valuable information quickly enough.
88. Does not coordinate well, so that many items can be done simultaneously.
89. Does not have experience in how to handle specific problems that can hinder closing.
90. Finds liens or other title problems at the last minute.
91. Fails to order HOA documents or property survey in a timely manner or at all.
92. Is not local and misunderstands the market.
93. Is too busy to complete the appraisal on schedule.
94. No comparable sales are available.
95. Is not on the Lender’s “approved list.”
96. Makes important mistakes on appraisal and brings in value too low.
97. Lender requires a second or “review” appraisal.
98. Refuses to work with agents in using comparable like-properties and property upgrades that would bring the value up to the sales price.
99. Property does not appraise for sales price.
The Inspector (s):
100. Home inspector not available when needed.
101. Home inspector too picky about condition of property.
102. Home inspector goes beyond their general scope of expertise and misinterprets problem areas (i.e. foundation/roof).
103. Inspection reports alarm buyer and sale is cancelled.
104. Inspector does not get reports to buyer/agent in required time needed.
105. Buyer and seller cannot come to an agreement on repairs and sale is cancelled.