Mooers Realty Maine Real Estate Blog
Top 10 Reasons Real Estate Sales Don't Close.
Off to a good start or doomed from the beginning, the top ten reasons real estate sales don't happen.
In any transfer of property, people are involved. Their life events, emotions, timing, current economic condition, personal health, marital relations, employment atmosphere, the local economy all can factor into the reasons a current listing becomes a sold comparable or not.
The contingencies of a real estate sale can make or break the chances of a real estate sale ever getting to a sit down or through the mails closing.
It is way easier to buy a home when you are not selling your old one. That saddles you with another house obligation and heavy mortgage debt.
What is the number reason for a property listing sale not happening? Over pricing the place.
Seller's expectation of way way too much money needed to make them agree to a sale. If the agent or broker studies the property's positive and negatives, checks the supply of anything like it on the current market competing for the same buyer. And eye balls the list of what has sold and for how much like this place in the last six months to a year. Then the what the seller should expect today for a sale price either is agreed to or rejected upfront.
If the seller gets red faced, starts to holler and screams "I'm not going to give it away", the agent or broker should back away from the listing. It won't sell. The seller does not really want to sell unless he could get above what is market value.
Some sellers will say if I can get two, three times the real value, I will think about a property sale. Even at this inflated, you got to be dreaming stage of contemplating a sale, it is not realistic. Don't list the property giving this kind of seller that it will sell. You are giving him the wrong expectation, you are wasting time and valuable resources that should be spent on listings that have a snowball's change of selling in you know where.
The number two reason real estate does not sell? Legal issues.
Title problem... a big one, not just an old undischarged tax lien that is more like a hang nail not a mortal gunshot wound that effectively kills a perfectly good real estate sale. Can't find the lender lien holder to release an undischarged open ended mortgage of a bank now defunct or merged or just MIA.
Sure it's been over thirty years since the mortgage on the home was written up and recorded at the registry of deeds.
But nothing showing up in the title search indexing to prove the debt was satisfied, that the property is squeaky clean and paid in full, free and clear.
The other tie for number two reasons real estate listings don't sell or take longer than they should to wait for a buyer is lackluster marketing. Lousy and limited images, no video, skimpy write ups with not important property and area details but buzz words and tired expressions.
Your whatever kind of real estate buyer is very busy and on a limited time frame to search for properties to find "the one" that fits best. They want more properties available to see and hear about right now with easy filtering out of what they "gotta have" along with the "don't want" sorted and culled out. They need to see all in their price bracket and best location quickly, completely on a variety of device options. No matter what time of day or nigh, no matter what weather here where the property is or their own current location that could be near or far.
Make it all happen without delay or they will find another real estate professional who will.
I find on our Maine real estate video channel the peak show and tell time is 10 to 10:30 at night. Right. Night. It's not 9 AM -5 PM , Monday through Friday any more.
The number three reason real estate does not sell is what is not disclosed, or lurky murky.
It might have if the buyer had known upfront about the power line easement, the right of way two other people have to cross your land, use your roadway to access their property. It is not a title issue but more of a legal existing easement that never was explained up front. Usually because the owner may have not known, but often because the original deed legal description that spells it out as an excepted and reserved condition of the sale was not copied, shared, understood by all the parties involved in the real estate sale. Heirs that are missing, did not sign off or want boatloads of money to do so come under the title problem heading too.
Number four reason real estate did not get to the sit down, pass the papers to sign here, here and only fourteen more places. Lack of skill or collected experiences to know what is happening. To create the abilty to see the red flags and to avoid the real estate quick sand.
Hand tired yet because standard closings have a lot of paperwork to sign? You may never know as a buyer or seller. If inexperienced agents or brokers are asleep at the wheel and do not cattle prod to navigate the listing that should turn into a potential sale. There is a life clock ticking loudly behind most real estate sales. It does matter when this baby closes. Especially when one home sale is tied to another, and even more houses are lined up like train cars all hooked together. Being sold in the domino line up of "gotta sell first" situations.
Number five reason a real estate sale just did not make it off the operating table, repairs needed. Inspections. The turn your head and cough.
Inspection of the major operating systems shows something is wrong. In my small rural area of the state of Maine, it seems everyone has a brother who is a carpenter, an uncle who is called Sparky, an electrician and the buyer has building skills. Knows how to use the business end of a hammer. Grew up around metal staging, power tools and roof jacks.
But when a building inspection is done, the items on it can derail a sale. Or family members nix the desire to buy this one for junior. Environmental problems like black mold, peeling and flaking lead base paint, damage from old or ongoing leaks from roof, chimney flashing. Or plumbing or improper foundation drainage all come under the same property heading deficiency list that an eagle eyed house inspector or clip board valuation appraiser will duly note on their housing report.
The building inspector can make too long a list for the buyer and seller to swallow before a closing date deadline to correct.
Or it is just the wrong time of year to do the repairs but the bank won't allow an escrow kitty to be set up to assure it will be done.
Or just no one has any money to correct the deficiencies.
It is why the house for sale in the $30,000 price bracket won't pass muster for a secondary mortgage market sale where the ones that do are $50,000 or more in price.
Contingencies of a real estate sale, whatever a bank appraiser outlines as needed if the sale is not cash or owner financed, someone has to do the updates or repairs. And the appraiser will return to make sure, sign off that all is done properly for the clear to close memo to circulate.
Number six reason a real estate sale peters out and fails involves the galloping gimmees over personal property treasure.
It's only the real estate for sale but the trinkets, the boat and motor, the John Deere zero turn lawnmower, the Kobota four wheel drive utility tractor with all the attachments look good to the buyer. So does next years eight cords of wood cut, split, delivered that was spelled out as not conveying with the property sale.
Wouldn't it be nice if they were added to the house sale? Well aren't you just the Monty Hall let's make a deal clever buyer. (BUZZER SOUND). As the real estate broker, trying to get the focus kept on the real estate sticks and bricks can be like herding cats. The personal property that is not part of the deal can become something outside the closing. I tell the seller to make a list, what they want for each item and the buyer can buy some, none, all of it. But when a buyer thinks the seller should include his mother's antique writing desk, the leather sectional, tension can build and momentum can slow.
It is a good idea to remove and replace the stained glass or crystal ceiling light in the formal dining room before the show and tell starts in a property sale. Out of sight, out of mind removes the static and sharp edges of a real estate sale process.
Number seven reason a real estate deal goes south is inability to make the installment payments.
Loss of job that may be tied to health problems or just the economy when a plant shutters its windows and pink slips are handed out to all the valued employees. Banks like you in the same line of work and not to see job changes every twenty minutes too. Banks don't want to foreclose on your house, they don't want to see you lose it, honest. Just make the payments, borrow some more money for a new one, other items like cars, college, Christmas clubs and vacation properties.
Number eight reason a property sale peters out is I found another property I like better.
(Wolf whistle sound) Yes, the buyer still loves and is fond of your place but is in love with another one that caught their eye on the MLS merry go round. It just came on the market a week before the closing on what you own Mr Seller. Or the buyer wants to suddenly renegotiate on the sale price of your home because they could buy a different place pretty much just like it for way less money. Buyer and seller remorse happens more than you would think too.
You might think high up on the list for what messes up a real estate sale would be a low appraisal valuation figure. If over priced properties are not taken, this situation happens far less than the average bear would think. And if the appraisal figure is too low, it can be challenged. I have seen one property house sale where appraiser number one came in $45,000 below the figure of appraiser number two. It happens. PM me and I can tell you that story and the work around to preserve the sale for the buyer and seller.
And if the appraisal is off a couple thousand dollars, the buyer can belly up to the bar and add the difference or it can be absorbed by the seller or split as a compromise.
The best compromise is where neither party is hand stand happy but the real estate show must and does go on.
Some sales go easy peasy, others there is blood shed along the trail to the lawyer's or bank's conference room long table with all the chairs.
If the place is over priced and the market value shifted, the seller often accepts if this is all I can get, and I do really need to sell for the new job two states away, they can still say "do it". If we can still close by next Friday and keep all the juggling balls they are throwing up in the air. Time schedules, deadlines, everyone has them and that is why the contract dates are sacred and to be preserved if possible. The longer and greater the number of extensions to a purchase and sale agreement contract, the lower the changes this property is going to close with this current buyer.
Number nine reason for sorry Charlie, no sale because you are out of your credit limit comfort zone. Have none, bad or are a just over your head over extended credit report.
Credit items on your report that were taken care of but not removed and are still showing up. The credit problems go on fast, come off slowly, especially the ones under the term "judgements". The buyer's debt ratios may be fine, they have a steady job and been there for eons. The items on their credit need to be fixed before going out to tramp through house listings though. And when they are approved for a house loan a closing is right around the corner, there are rules to follow. Do whatever your loan arranger lender tells you too Tonto. Don't go out and buy lots of new furniture for the under contract to buy home.
Your debt ratios changed and yes you were approved for a house loan but not now because of all those household related purchases that will never get moved into this listing address. Don't get divorced, don't buy a new car, don't change jobs, "easy does it" on the sliding the plastic with the magnetic strip works best until AFTER the real estate closing.
Number ten making the list for my experience in this rural Maine real estate market sale failure reasons is a tenant that won't move or a seller dragging their feet on the vacating the premises.
It is not just the sale price bottom line that is the end all in a real estate sale. A tenant not paying the rent can cause foreclosure, damage, delay in a sale. A seller waiting for the perfect apartment and not willing to high tail it can cost a property sale.
The convenience to move in and rent before a closing can be huge for an elderly owner who does not want to move twice or more times. Or the ability to store the items from the last house sale in the attached garage can be a gesture that preserves a real estate sale.
There is nothing like an eviction to mess up a real estate sale because they can drag out for months the buyer does not have time for when they need to get landed in a place before snow starts falling from the sky.
The time of year can make a sale difficult when a seller continues to heat, plow, insure and pay property taxes on a place not closing.
Banks and good attorneys will not let a sale happen with a tenant in place unless the property is a rental apartment with units that are pumping in money monthly. A home with a seller or tenant in it that closes can mean the new buyer inherits the occupant that needs to be legally and forcible removed from the premises. Too much debris at a property can cost the sale when the buyer says I'm not loading up the dumpster with all those tires, old empty paint cans and dead water heaters in the cellar or up overhead the garage.
Ready to buy, sell, trade some Maine real estate? Here to help! We start by listening, working hard to form a quality experience from a solid relationship! In close to four decades of listing, marketing, selling Maine real estate, everything from buyer, seller remorse, death and disease or divorce and more has threatened a real estate sale. Like the weather, you "dress appropriately", pull up your collar and prepare for any kind of real estate weather that can help or hurt a sale.
MOOERS REALTY 69 North ST Houlton ME 04730 USA