If you’re looking to buy or sell a home, there are 5 common reasons a sale will fall through.
In this blog, Gott Realty look at why a contract could be terminated and the best ways to avoid this disappointment.
Reasons a Sale May Fall Through
Finance is possibly the main cause of a sale falling over. One of the things a sales agent can do for the seller is to question the buyer about how they are going to obtain finance. For example, will they be utilising a bank or other finance institution direct, a finance broker or the bank of ‘Dad or Mum’.
If a client is going direct to a finance institution, the warning bell should be triggered.
Banks can often be slow in obtaining information, which could result in the possibility of the contract falling into breach.
Finance brokers can be a good option. The only downside is that many brokers don’t have the experience of putting together a finance application without causing the same delays that the banks do. Gott Realty highly recommend Brenton from Dream Financing as he has the experience and knowledge working on home loans.
2. Building and pest
Many contracts fall through due to unfavourable building and pest reports. One cause of these crashes can be dodgy building and pest inspectors, with some inspectors (accused of) exaggerating the significance of minor faults. This causes the buyer to panic and in the end the sale crashes.
Sometimes a contract may fall through because solicitors want to change nearly every clause in the contract, or they just take too long to process a contract. Thankfully this is a rare occurrence these days.
4. Cold feet or buyer’s remorse
Under the terms and conditions of a contract, the buyer has a cooling-off period. In Queensland, this cooling-off period is seven days from the date of the contract. Some buyers who are pushed into a contract may have second thoughts and use this clause to exit the contract. Again, this is a rare occurrence, but it is available to all buyers.
5. Changed circumstances
This usually occurs if the contract is subject to the sale of another property, the settlement of another property or if a specific clause in the contract is not fulfilled by the seller.
The most common cause of the contract crashing due to change of circumstances is if the buyer suffers a personal tragedy, such a family member death or they lose their job.
How to Reduce the Chance of a Sale Falling Through?
One thing the owner can do to help prevent a sale falling through is to obtain a pre-market building and pest report. This involves contacting a building and pest firm and having them inspect your home prior to it going onto the market.
This report will identify any issues with the building or pest, such as termite infestation, prior to sale. If pests are discovered, ratification can be made, and the appropriate notices given to the buyers.
By disclosing any issues prior to the buyer signing a contract, it lessens the chances of the sale crashing during the clauses stage.
From an agency point of view, buyers who can sight a pre-purchase building and pest are more confident to purchase. Also, doing a pre-purchase inspection beforehand may reduce the impact a solicitor can have with price reduction demands for continuation of the sale.
Why a House Sale Could Fall Through
Knowledge is key when buying or selling a house so make sure you are aware of the 5 main reasons why a contract may fall through and work towards reducing this impact.
Thinking of selling your home? Speak to Gott Realty today!
If you’re looking for a real estate team that is honest, respectful and always acting in your interests, speak to us today about how much your home is worth.
Our team has unprecedented access to local property data and insights, and we are here to help you sell your property for the best price possible with the least amount of stress.
Gott Realty service Albany Creek, Eatons Hill, Cashmere, Warner, Lawnton and Bray Park and many more areas across North Brisbane. Learn more here on our blog.