Yikes! 5 Reasons Home Deals Can Fail

You fell deeply in love with an updated home, knocked a few grand off the asking price, and maybe even bought a spiffy camelback sofa for your new living room. Sweet! Still, until you close and the keys are in hand, there’s a sliver of dread in your mind: What if your dream of homeownership falls apart at the last minute?

This possibility does exist: A survey by the National Association of Realtors® found that 1 in 16 home deals falls through. Here, Realtors® explain why it happens—so you, dear home buyer, can learn how to keep these curveballs from crashing into your dreams.

Reason No. 1: A change in credit score

Credit scores can fluctuate between loan approval and closing. Just one missed bill payment could lower your FICO score and increase your mortgage payment.

To prevent it: Buyers near closing should be aware of dinging their credit, which can happen when you open new credit lines, run up balances, or take out a loan on a new car. So make sure to carry on with business very much as usual.

Reason No. 2: Getting spooked by the inspection

Another agent, recalls a newly renovated property with an accepted offer this summer.

“We were with the inspector in the basement, and I happened to bump into an upside-down bucket that was suctioned to the ground,” he says. Water started gushing out of the uncovered hole.

“While the sellers did offer to take care of the problem—how could they not?—the buyers were seriously spooked and walked away.” Or maybe ran.

To prevent it: While this situation suggests that the sellers were hiding an issue from the buyers, usually if you find a deficiency in the home, the home inspection report becomes a negotiation tool for the buyer. So if a surprise pops up during the home inspection, don’t run until you’ve brought the issue up with the sellers. They could have a logical explanation—and you could get a concession. An experienced agent knows how to use this type of situation to negotiate in his client’s behalf..

Reason No. 3: Running out of money

A mortgage is only one part of the funds you’ll need to buy a home. Saving for your down payment and closing costs is not enough. You’ll need to have a cushion for unexpected repairs and other expenses that come up.

To prevent it: Talk to your lender or Realtor about the financial reserves you’ll need to get into a house before making an offer. A good Realtor will also advise you to look into a home warranty, sometimes the seller will pay for it.

Reason No. 4: Small problems blown out of proportion

Even relatively small flaws in a home can bring negotiations to a grinding halt if buyers or sellers get emotional or take things personally.

Small misunderstandings like what’s included with the house—appliances, sheds, etc.— can ruin a deal.

To prevent it: While it’s fine to bring up problems, try to do your best to stay calm and avoid being accusatory during communications with the seller's agent. And even if the sellers don’t grant all of your requests, try to keep the big picture in mind: Does that chipped molding really matter that much?

Reason No. 5: Cold feet

Buyers see the home in its best condition and are on an excitement high. Then, over the next two weeks the home just becomes a memory. Buyers are hit with the details of closing and moving costs. As that’s sinking in, they’re handed the home inspection report, listing every little defect in the house. That’s the moment most deals fall apart.

To prevent it: Ask you Realtor about the benefits of earnest money. An earnest money deposit tells a seller you are serious about closing.

Sources: Margaret Heidenry, Realtor.com, Agnes Casanova of ACRealty Group, Zillow.com.