All offers are not created equally.
It cannot be stated enough just how important it is for homeowners to choose the right offer when selling their home, not just the one with the highest price. The right offer is one that actually closes and allows you to move on from the transaction. The wrong offer has an unexpected problem at the 11th hour that forces the deal to fall out, leaving you back at square one.
If your buyer’s financing fell through at the last moment, it’s likely due to an obstable encountered along the way, but by anticipating those fallbacks, you can hopefully identify a solution. In this post, we’ll cover the main contingencies lender-financed offers typically have and the main drawbacks of such offers..
Here are five potential drawbacks of a lender-financed offer.
Buyer’s financing fell through? 5 Common Reasons
The most common contingency issue when dealing with “financed” buyers is getting final mortgage approval from the buyer’s lender. Although the process has greatly improved over the last decade, there are still many hoops to jump through to get to the closing table. A full-priced offer with a 60-day mortgage contingency sounds attractive on the surface, but this may not always be the case. Here are some of the most common reasons financing falls through when you need it most.
Closing Period
Regardless of how qualified a buyer may be, they still need lender approval to purchase your property. Getting from the loan application to closing has multiple steps, including the appraisal, application review, title search, homeowner’s insurance, condition review, and closing document distribution. Just one snag at any one of these checkpoints can tack on days (if not weeks) to the closing.
While your financed buyer is going through this process, you’re still expected to pay your mortgage, taxes, insurance, and utilities for the property until the deed is transferred. These can often be expenses that are not budgeted for and can eat into your available funds for the transition to your next property.