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The hurdles you will need to overcome, if any, come during the closing process within the due diligence period. This is a timeframe that has been agreed upon by the seller and the buyer once an offer is made on a home. This is the point at which the buyer can decide to buy or not buy the home without fear of losing any earnest money.
Might there be some complications? Why, yes. Here are brief descriptions of four such hurdles. For more in-depth information, make sure you have the best realtor as part of your team whether you are buying or selling.
Inspections: Before putting in a purchase order, the buyer will be sure to have their realtor write in any inspection contingencies. When the contract is signed, a home and pest inspection will be scheduled. This will expose if any, major defects, damages, and infestations that might affect the integrity of the home. Once the results are announced, the buyer is able to request repairs. If say, a termite inspection shows damage, the problem will have to be remedied before closing. If any of the issues are too serious or the seller won’t fix them, the option is now for the buyer to walk away because of the contingencies.
Title Issues: Securing title insurance protects the buyer and the lender from any future claims on the property. If there is a lien or claim against the home, the issue will need to be resolved before the transaction can go forward. The title company you choose will perform a title search that investigates all the public records to make certain that there isn’t anyone else that has a claim to the property other than the seller.
Financing: It’s paramount that as a buyer, there is a preapproval from a bank with a written loan commitment stating a mortgage will be provided for the amount of the home. Important to know: pre-qualified is not the same as preapproved! There are situations that might prevent the buyer’s loan from closing such as a false statement on the application, a lost job, an increase in interest rates, or the buyer’s credit score may have gone down. To avoid any of these problems, talk to the lender or even the realtor to learn what not to do during the due diligence period.
Insurance: If there has been any damage to the home, such as fire, mold, or water, it will show up on insurance records. Some homes are in unique exposures such as wildfire, hurricane, or tornado. Some insurance companies will refuse coverage because the home is considered too risky. Unless the buyer is paying for the home in full cash, an insurance policy is needed before a lender finances a home. It’s not over though. There are some insurance companies that will help to find creative solutions and work with the buyer to help find coverage. Talk to a seasoned realtor who has knowledge of who might be able to help.
The Bottom Line: There will always be struggles with anything in life, and for sure there will be hurdles in the home buying/selling process. The key is to have a good realtor to partner with to help smoothly across all these and any other hurdles that may come your way.