What happens when you agree to buy a house only to learn that it has serious issues? Should you rethink the purchase of the home? Cancel the closing? Although there are numerous problems that can surface after you’ve made an offer on a home and before closing, you can depend on your real estate agent to look out for your best interests. Let’s look at some homebuying issues that may result in walking away from the purchase of a home.
When you buy a home you’re also buying into the neighborhood. Walk around the neighborhood at various times of the day and get a feel for the energy, interactions among neighbors, traffic, etc. You might even introduce yourself to the neighbors. This is especially important if homes are in close proximity to one another. You might want to rethink purchasing a home if the neighborhood doesn’t give you a good vibe.
Your real estate agent will encourage you to schedule a home inspection once your offer has been accepted. The inspection report provides invaluable information, including the possibility of major problems with the home. Issues with the foundation, electrical, plumbing, water intrusion, and the roof are big dollar fixes which may lead you to terminate the buy-sell agreement. Before doing so, sit down with your agent to go over the severity of the problem and work with your inspector to see what it will take to remedy the issue.
Quality of The Home
The thought of buying a newly constructed home makes many people smile. No one has ever used the appliances, bathrooms, fireplaces, etc. What could possibly be wrong with a home that has just been built? Sometimes new construction can be rushed resulting in uneven surfaces, poorly aligned trimwork, offset drawer handles, etc. I witnessed some of this firsthand when I worked as an administrator for a contractor who was building a subdivision. A minor but recurring work order involved porch pillar trim that either needed to be replaced or re-caulked. A more serious problem included crawl spaces flooding due to drainage issues. Find out what your options are when buying new construction and what's covered, should issues start to crop up.
Other people fall in love with the charm of older homes. Original banisters, amazing lighting sconces, original plumbing fixtures in the bathrooms, etc.. Unfortunately, older homes can be susceptible to expensive repairs. Imagine learning that the home has knob and tube electrical wiring that would have to be replaced to bring it up to code (expensive!). This is the type of issue a home inspector will find and share with you in their report. You and your agent can discuss if this is enough to make you want to walk away from purchasing an older home.
Price: Too Good To Be True
Ever look at the price of a home and think it’s too good to be true? You might be right. Sometimes homeowners price their home well below market value to entice more buyers. This can result in a bidding war which may drive the price above its appraised value. Talk to your agent about the price of the home and how it compares to similar homes that have sold in the neighborhood. Then determine a fair offer and, if your offer is accepted, make sure you get an appraisal and an inspection. If you’re getting a loan to purchase the home, your lender will require an appraisal. Both the inspection and the appraisal will help determine if you’re paying a fair price for the home.
If you run into sellers who are unwilling to compromise, you may want to talk to your real estate agent about backing out of the offer. Maybe there’s an issue with the HVAC system, revealed by the inspector, and you ask to have it replaced before closing. Your agent goes back and forth but can’t seem to come to an agreement with the sellers. If you can’t find middle ground, you may want to move on from the sellers and the house.
Issues With Closing
Even though the closing has been scheduled, things can go wrong and the closing could be delayed or possibly terminated.
An issue with the title is one of the top concerns for delaying or terminating the closing. The title company will research the home to ensure the title is clear and ready to be transferred into your name. If there are issues, like an illegal title, the title company will not be able to issue the title and you will not be able to close on the house.
Typically, the title company will require title insurance for both the seller and buyer to protect them from fraud. If the title company you’re working with is hesitant to provide title insurance, you might want to talk to your agent about using a different company.
If the home you’re buying is in a high-risk area or uninsurable, these issues can also lead to delays or the termination of the closing process.
There are a variety of issues that can surface as you prepare to close on the house of your dreams. Having an experienced real estate agent in your corner will help you navigate and avoid many pitfalls that come with homebuying. Your agent will work with the seller’s agent to get you to closing on time but issues can arise that derail your plans. Don’t feel rushed to close on a house and don’t skip the inspection. Checking off all of the boxes, before signing the contract at closing, will help you avoid costly repairs and legal issues in the future.