When Deals Don’t Close
Posted on: Tuesday January 02, 2018
There are few things more exciting than the adventure that comes along with purchasing a new home. The real estate process from the offer to closing the deal is often a rollercoaster of emotions - from the first showing that fills you with excitement and anticipation, to finally getting the keys and pulling into the driveway for the first time.
But what happens if everything doesn’t go according to plan and your deal falls through? Real estate data and search site Trulia, recently released a report that measures how often homes returned to the market after initially being marked as “sold”. In 2016, 3.8% of home sales fell through, up from 2.1% in 2015. Based on these numbers we can see that while it does not happen very often, it is still a reality for many purchasers and sellers alike.
The most common reasons real estate deals fall through:
- The purchaser backs out. Even though the purchaser went through all the steps necessary to buy a home, they pull the plug on the deal. This can happen for a variety of reasons but is often related to their financing arrangements.
- Material issues with the home are discovered. While home inspections are often the first thing taken off the table in negotiations when the real estate market gets competitive, they are important. So much so that problems with the home are another reason real estate deals fall through.
- The seller does not have enough funds to discharge debts. Sellers may list their property in order to pay off debts that they have accumulated. In the event that the seller does not make enough money from the sale of their property to discharge their debts, they may try to break the contract.
What happens if your deal falls through?
In the unfortunate event that your deal falls through, you may receive advanced notice that there could be an issue from the other parties’ lawyer. Often this will be in the form of a request for an extension to move the closing to a different date. If there is no request for extension, or the extension has not been honoured, you may have the option to take legal action for damages caused by the other party. Costs could include your mortgage payments, home insurance, and any rent lost if the property is rented. Your ability to ask for these costs largely depends on the facts surrounding the issue.
If you suspect that your deal might fall through, we recommend talking to your lawyer as soon as possible. An experienced real estate lawyer can explain your specific situation in detail, explain all of options that are available for you to consider and help take the guess work away from an already stressful situation.
*Please note that this article is not a substitute for legal advice and is provided for general information purposes only. Nexera does not warrant or guarantee the quality, accuracy or completeness of any information provided in this article. Click here to contact a Nexera representative to discuss your unique situation today.