Working with FSBO’s
THE BUYER DELAY:
- Did not tell the truth on loan application.
- Did not tell the truth to their agent.
- Submits incorrect tax returns to lender.
- Buyer floats Interest Rate with Lender & Rates Increase- Cancels Agreement
- Makes a Large Purchase during the Loan Process or day before Settlement. (Car, Furniture, etc.)
- Big change in credit score during Loan Process.
- Lacks motivation.
- Source of down payment changes. (Gift from family changes)
- Family members do not like purchase.
- Is too picky regarding condition.
- Not Happy with Home Inspection
- Finds another property that is a better deal
- They are “nibblers” (Always negotiating)
- The buyers bring in non-real estate attorney into the picture.
- They do not execute paperwork in a timely manner.
- They do not deliver their money in a “check cleared” fashion to the closing agent.
- Job change, illness, divorce, or other financial setback.
- Comes up short on money.
- Does not obtain insurance in a timely manner.
- Decides to Just Walk Away from the Purchase
- Buyer Purchases Items a day or two before Settlement.
- Changes to Credit Report run day Before Settlement
- Loses motivation (i.e. job transfer did not go through, etc.)
- Illness, divorce, etc.
- Has hidden defects that are subsequently discovered.
- Unknown defects are discovered.
- Home inspection reveals average amount of small defects that the seller is unwilling-willing to repair.
- Gets an attorney involved.
- Removes property from premises that buyer believed was included.
- Is unable to clear up problems or liens.
- Last minute solvable liens are discovered.
- Seller did not own 100% of property as previously disclosed.
- Estate or Executor problem. No Death Certificates.
- Seller thought partners’ signatures were “no problem” but they were!
- Seller leaves town without giving anyone power of attorney.
- Seller Declares Bankruptcy during the Sale Process.
- Seller is Underwater on their Mortgage, can’t bring Money to Settlement.
- The notary did not make a clear stamp when notarizing the seller’s signatures.
- Seller delays the projected move-out date. TITLE COMPANY DELAY
- Fails to notify agents of unsigned or unreturned documents so documents so that agents can cure the problems relating to same.
- Fails to obtain information from beneficiaries, lien holders, title, insurance co., or lenders in a timely manner.
- Docs not find liens or problems until last minute.
- Bankruptcy or Foreclosure Clouds Title.
- Error on Prior Deed Can’t close without preparation of a New Deed.
- Misses a Fax Lien.
- Prior Title was a “Quitclaim” Deed and is nor recognized in Pa.
- Power of Attorney was not Notorized and/or is the wrong form used. Original is Lost only a Copy
- Poor service.
- Loses paperwork
- TITLE CO, GOES BANKRUPT AND ALL CHECKS BOUNCE Happened to PFR Co./Agent
- County will not approve Septic system or well
- Termite report reveals substantial damage and Seller is not willing to fix
- Home /lot size are misrepresented to size and condition
- Home is destroyed prior to closing
- Home does not pass township U & 0
- Home is uninsurable do to past claims and Losses.
- Property is incorrectly zoned
- Portions of home site on neighbor’s property
- Unique home and comparable properties for appraisal difficult find.
ACTS OF GOD DELAY:
- Earthquake, tornado, fire, earth slides, 9/1 Terrorism, etc.
I appreciate the time you have spent to understand the challenging time between contract acceptance and close. I wanted you to understand these potential problems for the following reasons:
- A transaction cannot close until title company has cleared up any and all of the previously mentioned problems.
- To let you know that I have great experience in heading off these potential pitfalls and thus can hopefully make you feel more secure in that you chose the correct broker.
- To make these pitfalls clear to all the parties we are working with so that problems can be discovered early.
- To make you aware of these pitfalls so that you can warn me of any potential problems.
THE UN-COOPERATIVE AGENT:
- Won’t return phone calls.
- Transfers to another office.
- Did not pre-qualify the client for motivation.
- Goes on vacation and leaves no one to handle file.
- Does not understand or lacks experience in real estate.
- Poor people skills with buyer.
- Gets client upset over minor points.
- Does not communicate with their client.
INSPECTION COMPANY DELAY:
- Too picky.
- Inspection reports alarm buyer and sale is cancelled. 33. Inspection report infuriates seller.
- Makes mistakes
- Delays report
THE APPRAISAL DELAY:
- The appraiser is not local and misunderstands the market.
- No comparable sales available.
- Appraiser delays (too busy, etc.)
- Incorrect appraisal.
- Appraisal too low
- Second Appraisal is too Low.
- Not Enough Comps in 3 Month Time Frame.
- Appraisal requires too many repairs or Conditions Seller will nor Complete or Credit Buyer.
- Lender docs not properly pre-qualify borrower.
- Lender decides last minute they don’t like borrower.
- Lender decides last minute they don’t like the property.
- Lender wants property repaired or cleaned prior to close!
- Lender raises rates, points, or costs.
- Borrower does not qualify because of a late addition of information.
- Lender requires, last minute, a re-appraisal.
- The borrower does not like the fine print in the loan documents that we receive 3 days before close.
- Lender loses a form or misplaces the entire file.
- The lender does not simultaneously ask for information from the buyer, they ask or information in bits and pieces.
- Lender pulls a “bait & switch” on the buyer.
- Lender does not have the money, so makes up some excuse for rejecting the buyer or delaying the transaction.
- Lets principals leave town without getting all necessary signatures.
- Incorrect at interpreting or assuming aspects of the transaction and then passing these items on to related parties such as lenders, attorneys. buyers and sellers.
- Too busy with Refi’s to get Approval on Due Date.
- Loses paperwork. Incorrectly prepares paperwork.
- Does not pass on valuable information fast enough.
- Does not coordinate well so that many items can be done simultaneously.
- Condo is NOT Approved Building by Lender. (Too Many Rental Units – Not Enough Owner Occ. Units)
- BUYER’S LENDER GOES BANKRUPT THE DAY BEFORE CLOSING. – Three Times last years
Deborah Ann Spence, CRS, e-PRO, GREEN, RENE
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