Property transactions are not easy. There are many variables like location, amenities and infrastructure that you must check and verify before taking a decision. Then, there is the legal and financial aspect of getting all the documents and approvals in order. Sometimes, we might think we have all aspects under control and yet, the deal might not go through.
Here are some things that can go wrong in a real estate deal and what you can do to avoid them.
- If one of the parties is inflexible on price. As a buyer, do make a fair offer – don’t lowball just for a bargain. If the price is well above market value and the seller is not flexible on the price, move on.
- If the home appraisal quotes house value under the market value. Sometimes, this can lead to lenders withholding approval on loans. Avoid such a situation by appraising the appraiser with comparable prices in the locality. You can also request a second appraisal.
- If there are errors on documents or some documents are missing. Make sure you review all paperwork for spellings, numbers, amounts and information provided before submitting. Even small errors can cost you days or weeks of delay.
- If your credit score is poor. You like the house, the amenities and the neighbourhood. But when you begin applying for your home loan, the bank or the financial institution informs that your credit score is too poor for loan approval. How to avoid this? Prepare, plan and work towards maintaining a healthy credit score for an easy home loan approval process.
- If hidden structural issues arise. There are times when we are so taken up by the house or the neighbourhood or the amenities that we do not look closely. The house could have issues like holes in walls; poorly done electrical fittings; drainage and water issues; unsafe swimming pools etc. Home inspections are a must especially so you can avoid such a scenario.
- If there is mold. This can be a deal breaker. Usually, mold growth is triggered by a water source nearby. Mold growth is possible even in areas with heavy seasonal rains. Look closely for any evidence of mold – it is advisable to commission a home inspection.
- If the seller backs out of a transaction. Once you have verified that the property and its attendant transactions are right for you, close the deal. Once the deal is accepted, the contract usually binds both parties and neither have the option to withdraw the offer without incurring legal penalties.
Buying a property requires a cool head – real estate agents have a saying that the side that is less emotional in a real estate deal will emerge the winner. One last advice: Don’t get too attached to a property. A property has to serve your interests and not vice versa.
Best of Luck!