The summer market has been awesome so far in Brooklyn. Condo Inventory is fairly low, and interest rates are stellar. However, today we are going to be talking about some potential deal breakers that may occur in our market, and how you can fix them. The new market has brought some potential challenges to us, but we want to share with you the problems we’ve been seeing, so you know what to do if faced with any of these potential issues.
Here they are:
1. Bad Appraisals
The market has improved, and we want nothing more for our sellers than to have them experience the benefits of an improving market condition. When you go under contract and have your home sold, everyone is clearly happy. However, when the bank comes in to do the appraisal, and it comes back lower than the purchase price, it’s always disappointing. When this happens, you will have to renegotiate the price, or the deal will fall apart. We recommend that sellers make sure their agent is doing a thorough, detailed market analysis of their home to avoid any potential appraisal issues.
2. Credit Mistakes
Nothing is more frustrating than when a buyer who has a pre-approval letter goes out and makes large, expensive purchases before the deal closes. If you are a buyer, don’t make any big purchases until your loan clears. It will affect your debt-to-income ratio and could delay the closing of your loan for quite some time.
3. Bad Home Inspections
These tend to happen during the due diligence period. When home inspections are done, the inspector does their best to do a thorough job and go through every nook and cranny in the house looking for any defects. Sometimes, they aren’t able to uncover things because you haven’t done the due diligence as a seller to fully inspect the entire home. Bad home inspections can kill a transaction, and create a lot of unexpected expenses.
4. Bank Delays
Lending is taking longer nowadays, and loans are getting extended. If the seller is not prepared to have a conversation with the bank, that’s frustrating. You have got to have good communication between your bank, your agent, and your lenders. If there’s an indicator it’s not going to close, the seller should be in a position to back out of that contract. Understand that when you decide to enter the market.
5. Intense Negotiations
When it comes down to the negotiation table, look at the big picture. A few thousand dollars is not a good enough reason to abandon the transaction. Try to find some common ground and consider what your alternatives are. If you went back on the market, are you going to end up regretting it?
These are just a few of the ways that a transaction can fall apart, but hopefully if you find yourself in any of these situations, you’ll know what to do. If you have any questions for us, feel free to give us a call or send us an email.
Check our prefeRred vendors' page if you are looking to hire a Home Inspector, a Mortgage Banker, an Appraiser, an Attorney or someone else to help you with your home goals.
We look forward to speaking with you soon!
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