You have just negotiated a deal with a buyer and have signed a sales contract. The good news is that you are almost there. The bad news is that the finish line is still not as close as you think. Even though you and the buyer have agreed on a price, there is still room for the deal to fail. Two large parts of the transaction still lay ahead: the inspection and the buyer’s mortgage.

home inspection

With most standard sales contracts, the buyer will request to be allowed to perform a home inspection. If this inspection is not satisfactory to the buyer, the deal could die right there. There are three main types of inspections that the buyer may have completed.

• Termite inspection. Depending on your state laws, you or the buyer may be responsible for termite inspection. If it is your responsibility as the seller, then you should have a letter from a licensed pest control company stating that your home is termite-free. Whether you or the buyer pay for the inspection, it is your duty to fix the problem before closing.
• Roof inspection. If the roof inspection results in the repairs being completed, you must cover the repairs.
• General inspection. This is an inspection of major appliances, air conditioning, heating, plumbing, and electrical systems. As the seller, you must repair or replace any of these items that fail inspection.

Avoid inspection problems by completing your own inspection before putting your home on the market. That way, you’ll have time to make the repairs before the buyer’s inspector catches them.

Alternatively, you could sell your home “as is.” Such a stipulation must be included in the sales contract and lets the buyer know that you will not fix any problems that may arise from any inspection.

The biggest drawback to selling your house “as is” is that any potential buyer will assume that you know of problems in your house that are too expensive for you to fix, making them extremely reluctant to even want to make an offer. If they do, don’t be surprised if it’s significantly lower than their asking price.

Mortgage Pit Falls

Your buyer’s ability to purchase your home depends on your approval for a mortgage. If the buyer is not approved for a mortgage large enough to buy your home, the deal will fail unless he is willing to lower the purchase price. Without financing, it is impossible for the buyer to acquire your house.

What can you do to avoid this problem? Make sure all buyers are pre-qualified before beginning negotiations. Ask prospective buyers for a pre-approval letter from a lender. Serious buyers will already have gotten pre-approved for a mortgage. Make sure the amount the buyer has been pre-approved for covers the sale price of your home.

You can also work with the buyer to obtain financing. If you are working with a real estate attorney, he or she could be a resource that can help a buyer communicate with a lender or mortgage broker. Alternatively, you can contact a local real estate agency for recommendations on lenders or brokers.

Just because you’ve been turned down by one lender doesn’t mean another won’t approve you for a loan. Be patient and keep working.

As a real estate agent, I have seen a good chunk of home sales drop due to failed inspections and lack of financing.

As the owner, you are in control of the inspection. You can choose to fix any and all issues an inspector finds.

Financing, on the other hand, requires a significant amount of faith and often hope. So, while you wait for the buyer’s financing to be approved, he keeps his house on the market and continues to look for offers in the hope that he may end up with a secondary offer that he can fall back on if the original offer falls through. .