88 Types of Turbulence That Can Be Encountered in Your Real Estate Transaction

Every real estate transaction is a sophisticated and complicated financial maze that, if not managed properly, will crash and burn. Much like an airline pilot, your realtor must understand and anticipate the potential pitfalls that could keep you from reaching your destination in one piece. A successful transaction, much like a successful flight, will leave the passenger with the thought, “Well that was easy!”

An experienced realtor, like those at M3 Realty, know how to maneuver through the toughest situations and maintain control throughout your “flight”. Now fasten your seatbelt, relax and enjoy your trip!

The Buyer:

1. Does not tell the truth on loan application
2. Has recent late payments on credit report
3. Finds out about additional debt after loan application
4. Borrower loses job
5. Coborrower loses job
6. Income verification lower than what was stated on loan application
7. Overtime income not allowed by underwriter for qualifying
8. Applicant makes large purchase on credit before closing
9. Illness, injury, divorce or another financial setback during escrow
10. Lacks motivation
11. Gift donor changes mind
12. Cannot locate divorce decree
13. Cannot locate petition or discharge of bankruptcy
14. Cannot locate tax returns
15. Cannot locate bank statements
16. Difficulty in obtaining verification of rent
17. Interest rate increases and borrower no longer qualifies
18. Loan program changes with higher rates, points and fees
19. Child support not disclosed on application
20. Bankruptcy within the last two years
21. Mortgage payment is double the previous housing payment
22. Borrower / coborrower does not have steady two-year employment history
23. Borrower brings in handwritten pay stubs
24. Borrower switches to job with a probation period
25. Borrower switches from job with salary to 100% commission income
26. Borrower/coborrower/seller dies
27. Buyer is too picky about property in price range they can afford
28. Buyer feels the house is misrepresented
29. Veterans DD214 form not available
30. Buyer comes up short of money at closing
31. Buyer does not properly “paper trail” additional money that comes from gifts, loans, etc.
32. Buyer does not bring cashier’s check to title company for closing costs and down payment

The Seller:

33. Loses motivation to sell (job transfer does not go through, reconciles marriage, etc.)
34. Cannot find a suitable replacement property
35. Will not allow appraiser inside home
36. Will not allow inspectors inside home in a timely manner
37. Removes property from the premises the buyer believed was included
38. Cannot clear up liens – is short on cash to close
39. Did not own 100% of property as previously disclosed
40. Encounters problems getting partners’ signatures
41. Leaves town without giving anyone Power of Attorney
42. Delays the projected move-out date
43. Did not complete the repairs agreed to in contract
44. Seller’s home goes in foreclosure during escrow
45. Misrepresents information about home and neighborhood
46. Does not disclose all hidden or unknown defects that are subsequently discovered

The Realtor(s):

47. Has no client control over buyers or sellers
48. Delays access to property for inspection and appraisals
49. Does not get completed paperwork to the lender in time
50. Inexperienced in this type of property transaction
51. Takes unexpected time off during transaction and can’t be reached
52. Misleads other parties to the transaction
53. Does not do sufficient homework on their clients or the property and wastes everyone’s time

The Lender(s):

54. Does not properly pre-qualify the borrower
55. Wants property repaired prior to closing
56. The market raises rates, points or costs
57. Borrower does not qualify because of a late addition of information
58. Lender requires a last-minute second appraisal or other documents
59. Lender loses a form or misplaces entire file
60. Lender doesn’t simultaneously ask for all needed information
61. Lenders doesn’t fund loan in time for close

The Property:

62. County will not approve septic system or well
63. Termite report reveals substantial damage and seller is not willing to fix
64. Home was misrepresented as to size and condition
65. Home is destroyed prior to closing
66. Home is not structurally sound
67. Home is uninsurable for homeowner’s insurance
68. Property incorrectly zoned
69. Portion of home sits on neighbor’s property
70. Unique home and comparable properties for appraisal difficult to find

The Escrow/Title Company:

71. Fails to notify lender/agents of unsigned or unreturned documents
72. Fails to obtain information from beneficiaries, lien holders, insurance companies or lenders in a timely manner
73. Lets principal leave town without getting all necessary signatures
74. Loses or incorrectly prepares paperwork
75. Does not pass on valuable information quickly enough
76. Does not coordinate well so that many items can be done simultaneously
77. Does not bend the rules on small problems
78. Finds liens or other title problems at the last minute

The Appraiser:

79. Is not local and misunderstands the market
80. Is too busy to complete the appraisal on schedule
81. No comparable sales are available
82. Is not on the lender’s “approved” list
83. Makes important mistakes on appraisal and brings in value too low
84. Lender requires a second or “review” appraisal

Inspectors:

85. Pest inspector not available when needed
86. Pest inspector too picky about condition of property
87. Home inspector not available when needed
88. Inspection reports alarm buyer and sale is cancelled

When you are ready to take off, contact us!