If you ask a realtor the worst thing that happened to them when negotiating a home sale, they may have the odd amusing story. Yet, most of the issues will be relatively low-key.
Most real estates closing fail for mundane reasons, not because a meteor broke through the roof when people were about to sign the paperwork.
Contingency clauses allow you to retreat from a purchase if certain events pass
Knowing the common reasons for closing problems allows you to take preparatory steps to deal with them should they occur.
- Financial issues: Real estate is a big dollar purchase, so you may not have the cash sitting in your wallet. If a buyer for your current home pulls out last minute, that could leave you unable to buy the new one. If the mortgage lender retracts their offer, that could also leave you unable to fund the purchase.
- Ownership issues: It is crucial to carry out a thorough title search when buying property. The older the property, the more chance there are issues. Buying a restaurant Al Capone once owned may give you an exciting marketing angle, yet if the title is as murky as the source of his income, you may face issues.
- Structural or land issues: Buildings often have faults that you cannot see. These may be minor, or they might mean you need to knock the whole thing down. You need all the information to make an informed decision.
Closing on real estate can be satisfying when it goes to plan, but it can be expensive if it does not. By inserting the appropriate contingency clauses, you can ensure a swift retreat if last-minute evidence makes you change your mind.