Selling a home can be stressful, especially if the buyer is unprepared or has unrealistic expectations. Fortunately, you can often identify these buyers from a distance, if you know the signs. If you're a homeowner who will soon be selling your home, watch out for these buyer red flags.
Contingencies are statements written into the home purchase contract that allow the buyer to cancel under certain circumstances. Some contingencies commonly appear in most home purchase contracts. The financing contingency allows the home buyer to cancel if their loan doesn't fund. This is a very common contingency to see among home buyers who are getting a mortgage to purchase a property.
Though home inspections are usually necessary and encouraged by real estate professionals, mst do come with a contingency. The inspection contingency is the contingency that allows the home buyer to negotiate repairs or walk away from the sale of a home if the home inspection reveals serious problems with the structure or maintenance of the house. Many buyers will insert the inspection contingency as a way of protecting themselves from what might be wrong with the house.
Finally, the appraisal contingency is a contingency that allows the home buyer to cancel if the home does not appraise for the purchase price of the house. It's common for home purchase contracts to have this language written into the document. However, there are other contingencies that home buyers can write into their home purchase agreement. Buyers who insert an excessive number of contingencies into their agreement may be having second thoughts about purchasing the property.
Pre-approval and pre-qualification are two different steps of the loan approval process. Pre-qualification is the first step. It's often easy to get pre-qualified by answering some questions over the phone. Pre-approval is the second step, and it requires the home buyer to submit a lot of documentation to the mortgage lender. This documentation supports the buyer's answers during the pre-qualification process. Often, during the pre-approval process, the lender will discover new information that changes the buyer's approval status.
Buyers who are able to get pre-approved are much more likely to qualify for a loan at the end of the escrow period. Buyers who are only pre-qualified may be facing a nasty surprise when the time comes to buy a house.
Requesting a Lot of Repairs
Unless a house is not in good condition, many buyers will not request a lot of repairs up front. This could be indicative that the buyer has unrealistically high expectations that could become a recurring theme throughout the home purchase process.
Low Earnest Money
The earnest money check is the deposit the home buyer puts down at the start of the escrow period. The earnest money check goes into an escrow account, and is held until the home purchase process ends. If the Northwest Calgary new home buyer backs out of the home purchase contract at a time when the purchase agreement does not allow, the buyer will lose the earnest money deposit.
Sometimes the size of the earnest money check is a sign of a buyer's commitment. Sellers should weigh the size of the earnest money check when considering which home to purchase.
Work With Your Real Estate Professional
If you're a homeowner who would like to sell your home soon, work with a reputable real estate agent in your area. Real estate agents are trained to identify red flags and can point out when a buyer may become a problem. Working with a good real estate professional can help you protect yourself throughout the home buying process.