Consumer Guide: Overcoming Roadblocks to a Sale or Purchase

Pitfall: The appraisal doesn’t match the sales price.

Sometimes the appraisal comes back lower than the purchase agreement amount. The lender will only provide a mortgage based on the appraised value. 

Solution: Sellers should work with their agent to price the property properly. During the appraisal process, your agent should have a good line of communication with the appraiser, providing information on the property and comparable properties that support the price. (However, never pressure the appraiser to meet the sales price.) If the appraisal comes in lower than the contract price, the sellers may choose to lower the price, or the buyers may choose to make up the difference in cash. If they believe it’s strongly warranted, buyers may want to ask the lender for a reconsideration of value.

Pitfall: The title is clouded.

Unresolved liens or encumbrances on the property, or legal disputes regarding ownership, will need to be resolved before the home sale can continue. 

Solution: Sellers should clear the title before listing the property. A title search will verify the property’s chain of ownership and uncover any potential liens or encumbrances. Buyers typically pay for lender title insurance, which protects the lender from any losses from claims; some buyers also choose to get an owner’s title policy to protect them from undiscovered liens, errors or fraud.

Pitfall: Buyer’s home doesn’t sell.

This could be an issue if the sellers have accepted a home-sale contingency in the contract. 

Solution: Sellers should talk with their agent upfront about how flexible they can be on the closing date. Buyers may want to look into bridge financing to fund the closing before their old home sells.

There are also human reasons a deal may fall through. Buyers may realize they don’t love the home as much as they initially thought, or another home may come on the market that they love more. Sellers’ circumstances may change, and they may no longer want to move. One party may find the other side too difficult to deal with. During the attorney-approval-and-inspection period, either side can cancel the deal without penalty. But with an open mind and a willingness to negotiate, parties can often resolve differences. A real estate agent who’s a REALTOR® can help you keep the transaction on track.

Shared with permission from the National Association of REALTORS®.