Page 9 - FSBO _ Home Selling Guide (Ebook-Digital)

“A Few Possible Turbulences That Can Occur During The Real Estate Transaction”

Beware Of Deal BREAKERS!

The Buyer/Borrower: The Seller:
1. Incomplete/wrong information on loan application. 1. Loses motivation to sell (job transfer does not go through, reconciles marriage, etc.).
2. Borrower has recent late payments on credit report. 2. Cannot find a suitable replacement property.
3. Borrower incurs additional debt after loan application. 3. Will not allow appraiser inside home.
4. Mortgage Broker finds out about additional debt after 4. Will not allow inspectors inside home in a timely manner.
loan documents has been received. 5. Removes property from the premises the buyer believed was included.
5. Not honest with Realtor 6. Cannot clear up liens – is short on cash to close.
6. Does not trust Realtor / Lender /Inspector and does 7. 39. Did not own 100% of property as previously disclosed.
not cooperate. 8. Encounters problems getting partners’ signatures.
7. Borrower loses job. 9. Leaves town without giving anyone Power of Attorney.
8. Co-borrower loses job. 10. Delays the projected move-out date.
9. Income verification lower than what was stated on loan 11. Did not complete the repairs agreed to in contract.
application. 12. Seller’s home goes into foreclosure during escrow.
10. Overtime income not allowed by underwriter for 13. Misrepresents information about home and neighborhood.
qualifying. 14. Does not disclose all hidden or unknown defects and they are subsequently discovered.
11. Applicant makes large purchase on credit before 15. Stop caring or abandon property.
closing.
12. Illness, injury, divorce or other financial setback during The Realtor(s):
escrow. 1. Has no client control over buyers or sellers.
13. Buyer losses or lacks motivation. 2. Does not follow up with their clients to secure loan application in line with the purchase
14. Gift donor changes mind. 3. contract
Does not remind client to get required insurance for property.
15. Does not have legal divorce
16. Buyer cannot locate divorce decree. 4. Delays access to property for inspection and appraisals.
Does not get completed paperwork to the Lender in time.
5.
17. Cannot locate petition or discharge of bankruptcy, lien 6. Does not provide required paperwork to buyer / seller /title and other vendors in contract
or judgments. and/or statutory time frame.
18. Tax returns does not match government 4506-T tax 7. Inexperienced in property transaction.
returns. 8. Takes unexpected time off during transaction and can’t be reached.
19. Missing pages from bank statements. 9. Misleads other parties to the transaction – has huge ego.
20. Difficulty in obtaining verification of rent. 10. Does not do sufficient homework on their clients or the property.
21. Interest rate increases and borrower no longer qualifies. 11. Buyer/seller wants to rent back w/o paying market value rent.
22. Loan program changes with higher rates, points and
fees. The Lender(s):
23. Child support not disclosed on loan application. 1. Does not properly pre-qualify the borrower.
24. Bankruptcy within the last two years. 2. Wants property repaired prior to closing.
25. Short Sale or foreclosure within the last 2-3 years. 3. The market raises rates, points or costs.
26. Mortgage payment is double the previous housing 4. Borrower does not qualify because of a late addition of information.
payment shock to buyer 5. Lender requires a last-minute second appraisal or other documents.
27. Borrower/co-borrower does not have steady two-year 6. Lender loses a form or misplaces entire file.
employment history. 7. Lender doesn’t simultaneously ask for all needed information.
28. Borrower brings in handwritten pay stubs cannot verify 8. Lender doesn’t fund loan in time for close.
with accountant or third-party. 9. Lender goes out of business.
29. Borrower switches to job with a probation period. 10. Program borrower qualified for no longer available.
30. Borrower switches from job with salary to 100% The Property:
commission income. 1. County will not approve septic system or well.
31. Borrower/co-borrower/seller dies. 2. Liens on property that must be paid for prior to or at closing.
32. Buyer is too picky about property in price range they 3. Not recorded properly in court records.
can afford. 4. Termite report reveals substantial damage and seller is not willing to fix.
33. Buyer feels the house is misrepresented. 5. Home was misrepresented as to size and condition.
34. Veterans DD214 form not available. 6. Home is destroyed prior to closing.
35. Buyer comes up short of money at closing. 7. Home is not structurally sound.
36. Buyer does not properly “paper trail” additional money 8. Home is uninsurable for homeowner’s insurance.
that comes from gifts, loans, etc. 9. Property incorrectly zoned.
37. Buyer does not bring cashier’s check to title company 10. Portion of home sits on neighbor's property.
for closing costs and down payment. 11. Unique home and comparable properties for appraisal difficult to find.
12. Property previously bought by an investor and does not have proper seasoning of time for
the property to qualify for a loan. (The bank usually have a 90-day hold period requirement)
The Escrow/Title Company: The Appraiser: Inspectors:
1. Is not a local appraiser and misunderstands the 1. Home/Pest/Roof inspector
1. Fails to notify lender/agents of unsigned or unreturned market and undervalues the property on the not available when needed.
documents. appraisal report. 2. Pest inspector too picky
2. Fails to obtain information from beneficiaries, lien holders, 2. The Appraiser is too busy to initiate the appraisal about condition of property.
insurance companies or Lenders in a timely manner. inspection or to complete the appraisal report on 3. Home inspector not
3. Lets principals leave town without getting all necessary schedule. available when needed.
signatures. 3. No comparable sales are available in the 4. Inspection reports alarm
4. Loses or incorrectly prepares paperwork. subdivision/ community or area. buyer and sale is canceled.
5. Does not pass on valuable information pertaining to potential 4. Appraiser is not on the Lender’s “approved list.” 5. The property inspection
problems quickly enough. 5. Makes mistakes on appraisal report that negatively report is slow to return to
6. Does not coordinate well, so that many items can be done impact the property value. buyer to meet contract
simultaneously. 6. Appraisal report include required repair. deadline.
7. Does not cooperate on small problems. 7. Lender requires a second appraisal or “review” .
8. Finds liens or other title problems at the last minute. 8. Difficult or unreasonable appraiser
9. Wait at the last minute to order the lender payoff 9. Appraisal vendor backed-up & delays appraisal
10. Wait too long to order information from the association report.
regarding the sellers property and/or outstanding seller debt. 10. Appraisal Report takes a long time to go to lender.
to clear the loan for final approval.
Courtesy of Rema P. Lee | Marketing Strategist 9

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