DETROIT (WWJ) – You’ve been searching for the perfect home for months…spending weekends going through house after house until you finally find ‘the one’. Your offer has been accepted by the owner, but that’s really just the start of the home purchase. Be diligent because there are at least five things that can make your dream home purchase go bust.
LOAN APPROVAL: While you may have been pre-approved when you submitted your offer, after submitting all of your financial information for loan approval, you may not qualify for the mortgage desired. Your best bet is to be pre-approved before submitting an offer, not pre-qualified.
APPRAISAL: The house does not appraise out … which means the mortgage lender’s appraiser has determined that the home is not worth the amount that is being mortgaged. Note: this is different from the purchase price offered.
INSPECTION: A big-ticket item in the home comes up as needing repair or replacement. (Often, it’s a roof, furnace or structural). If the buyer and seller can’t come to an agreement on the issue, the deal may just go down.
CLEAN/CLEAR TITLE: The title on the home is not clear. If the title company should find that the title is not clear or clean (the title work shows previous liens not cleared) that can become a selling liability.
BUYER OR SELLER BACKS OUT: For whatever reason, the buyer or seller backs out of the deal. If an agreement can’t be made, several unpleasant things can happen among them: A court action for ‘specific performance’, and/or the buyer can lose their Earnest Money Deposit (EMD).
Hopefully, you’ll never run into any of these dramas on your home purchase, but it’s good to be aware and have a real estate attorney look over your Purchase Agreement before submitting your offer, giving you the best chance at a hassle free home buying experience.