Once a sale is pending, the odds are that a sale will go through. However, some Massachusetts buyers and sellers have found themselves in circumstances where the transaction did not go as planned. Here are three reasons why a real estate purchase may not end up completed as expected:
Someone changes their mind
Buyers in particular may have some “buyer’s remorse” and choose to pull out after thinking it through. This can particularly happen in a highly competitive market, where buyers may feel pressure to put in a high bid and then think twice about it later. Sometimes, the change of heart falls within a predetermined due diligence period or contractually agreed upon contingency. In this case, there are not usually any major penalties or legal issues. However, those who try to pull out of a deal after signing a purchase agreement, especially if it is close to the closing date, may have some legal consequences to contend with.
Financing falls through
Most home buyers rely on a mortgage to fund their purchase. In some instances, their original lender may not be able to extend the amount needed to buy the home. Often, this is dealt with by giving the buyer more time to find another mortgage lender. However, if their circumstances are such that financing is not possible to easily obtain, the deal could be nullified.
The buyer is unable to sell his or her home
Another contingency that is commonly found in contracts is that the buyer needs to be able to sell their existing home before proceeding with the sale. Therefore, a buyer who is struggling to sell their home may ask to postpone the purchase. A bridge loan may be possible for the seller to access while they wait for the sale to take place; however, this could lead to a failed purchase ultimately.
Most sellers choose to take steps to avoid a real estate deal falling through, as restarting the sale process can be time consuming. Trying to find a solution with the buyer, such as waiting for them to find alternative mortgage financing, may be an option in some cases. In others, like a change in heart, inconveniences and added expenses from the failed transaction could have legal consequences if it means one party is not holding up their end of the contract. It’s a good idea for both parties to talk to a real estate lawyer when entering a contract in general and especially if they’re considering ending a previously agreed upon real estate purchase.