There are times and situations when a qualified potential homebuyer believes that they have discovered the ideal home, that they would love to live in and make a home of their own, but later recognize and realize that there could be reasons , to get away! While this can often be quite a challenging and difficult scenario and situation, it is better to make the right decision, which is best for you, rather than make a huge mistake. With that in mind, this article will attempt to examine, review, consider and briefly discuss 5 instances where it might make sense for a potential buyer to back out of the deal!
1. Does not “compensate”: There are times when the appraiser, from one’s lending institution, appraises a particular property, at a significantly lower price/value, than their offer. While these appraisals are sometimes invalid, other appraisals represent that you’ve overbid on a particular home. Banks use competitive market analysis (CMA) to guide this process and so a smart buyer would focus on that as well. Since a mortgage amount and/or interest rate can be based on this number, when it gets significantly lower, it could mean giving up on the deal!
two. Top issues found by the home inspector: One must make their offer contingent upon the results of a home inspection. While most of the time the issues encountered are minor and easy to address, in others, they can indicate major problems. Why would you want to buy a house, which is likely to become a money pit?
3. Seller will not sufficiently/adequately address, or adequately compensate: When major problems are discovered, the buyer should return to the seller, explain what they found, and ask the seller to fix the problem to their satisfaction. This could mean having a licensed contractor arrange for the home to be of the proper quality and standards, or compensating the buyer, either by lowering the price or by providing a seller’s concession, at closing. If the latter is the determination, it should be sufficient to address these issues. The other possibility is some combination of repair and compensation.
Four. Discover other relevant topics: During the due diligence process, other factors, such as title issues, liens, zoning, or unforeseen surprises, may be discovered that cause someone to reconsider.
5. Fear that it will become a money pit: While homebuyers will almost always need to put some money into any home they buy, if there are major issues, such as environmental, structural, etc., one risks getting into an undesirable financial situation. Nobody wants a money pit!
Home buyers should make their offers, contingent, at a minimum, on mortgage and inspection considerations. If you can’t get what you want and/or need, walk away!
