Date Posted: 2012-05-24 02:44:40
Site Posted: Myproperty.ph
Picture this: your finances are all set and you’re ready to look for a home. You find a property that seems custom-made for you, and the owners have chosen you among all the other buyers to sell their home to. All that’s left is to sign the deed, hand over the keys and you’re the proud owner of a new house. Perfect, right?
Don’t be so sure. These days, a lot of things can go wrong in a real estate deal and, worse comes to worst, you’ll be spending time and money before finding out that you can’t even buy the home you want. Here are some possible scenarios that can kill your deal, and what you can do to stop them.
The house (or the seller) has secrets
Some sellers may neglect to reveal some facts about the house that will keep you from buying it. In some cases, it’s only when a title search is done that problems with issues such as ownership and finances are revealed. For instance, it may turn out that the seller is not the only person who can lay claim on the property, especially the owner had filed for bankruptcy and he is up to his ears in creditors.
Protect yourself: Get title insurance, which safeguards your claim to the home.
The lender retracts your mortgage pre-approval
Although a mortgage pre-approval is a promise from the lender that they will give you a loan for a house, this doesn’t mean that the deal is set in stone. If a lender sees something that can classify your chosen property as a high-risk investment, they will back out. Some of the things that can cause lenders to take back your pre-approval are disputes with the neighbors, legal issues and boundary problems.
Protect yourself: When securing a mortgage pre-approval, find out how solid the pre-approval is, and ask them what conditions there may be that will cause your pre-approval to be withdrawn.
The home receives a low appraisal
A home appraisal is conducted to determine the actual value of a home. Normally, the lender chooses the appraiser; after all, they want to make sure that you’re not paying too much for a certain property. The trouble with this is that if an appraiser comes back with too low a price, even if you and the seller have already agreed to a certain amount, the lender won’t agree to give you the loan. What’s worse is that the home itself is not the only issue; if the appraiser is inexperienced or doesn’t know the neighborhood very well, a low appraisal is almost always a guarantee.
Protect yourself: If you have a choice, pick a highly experienced appraiser who knows the neighborhood to get a fair appraisal.
Many real estate deals go south if you overlook certain aspects of the transaction. Finding out what they are early on before sealing a deal will ensure that your purchase will go as smoothly as possible.
Jillian Cariola, Writer
(cover image from freestockphotos.es)
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