There are times, and situations, where a qualified, potential, home buyer, believes he has discovered, the ideal home, which he would love to live in, and make a home, of their own, but, later recognize and realize, there might be reasons, to walk away! While this may often, be a rather challenging, difficult scenario and situation, it’s better to make the right decision, which is best for you, rather than making some enormous mistake/ error. With that in mind, this article will attempt to briefly examine, review, consider, and discuss, 5 instances, where it might make sense, for a potential buyer, to walk away from the deal!
1. It doesn’t “comp – out”: There are times, when the appraiser, from one’s lending institution, evaluates a particular property, at a significantly lower price/ value, from your offer. While these appraisals, at times, are invalid, at other times, they represent, you have offered too much for a particular house. Banks use Competitive Market Analysis (CMA), to guide this process, and, therefore, a wise buyer, would also focus on that. Since the amount, and/ or rate of interest, on a mortgage, might be based on this number, when it comes in, significantly lower, it might represent, walking away from the deal!
2. Major issues found by the home inspector: One should make his offer contingent upon, the results of a home inspection. While most times, the issues found, are minor and easily addressed, at others, might indicate, major issues. Why would you want to purchase a house, which will probably become, a Money Pit?
3. Seller won’t address sufficiently/ adequately, or appropriately compensate: When significant issues are discovered, a buyer should go back to the seller, and explain what was found, and ask the seller to address the issue, to his satisfaction. This might mean, having a Licensed Contractor, make the fixes, to bring the house, up to the proper quality and standards, or compensating the buyer, by either reducing the price or providing a Seller’s Concession, at closing. If the latter is the determination, it must be sufficient, to address these issues. The other possibility is some combination of repair and compensation.
4. Discovers other relevant issues: During the due diligence process, other factors, such as title issues, liens, zoning, or unanticipated surprises, might be discovered, that makes someone, reconsider.
5. Afraid it might become a Money Pit: While home buyers will nearly always, need to put some money, into any home, they purchase, if there are major issues, such as environmental, structural, etc, one risks, getting into an undesirable financial situation. No one wants a Money Pit!
Home buyers should make their offers, contingent upon, at the very minimum, mortgage considerations, and the inspection. If you can’t get what you want, and/ or need, walk away!