Potential Problems to Be Aware of when Buying a Home

Terry Riffe | March 25, 2015

Potential problems when buying a home

Listed below are some potential problems that may occur when buying a home. This signifies the importance of hiring a knowledgeable and experienced Realtor to handle every issue that may occur from contract to closing. Hire the professionals at Orlando Vacation Realty as we are experienced problem solvers!
The Buyer/Borrower:
• Does not tell the truth on the loan application.
• Submits incorrect information to the lender.
• Has recent late payments on credit report.
• Found out about additional debt after loan application.
• Borrower or Co-Borrower loses job.
• Income verification lower than what was stated on loan application.
• Overtime income not allowed by underwriter for qualifying.
• Applicant makes large purchase on credit before closing.
• Illness, injury, divorce or other financial setback during process.
• Lacks motivation.
• Gift donor changes mind.
• Cannot locate divorce decree.
• Cannot locate petition or discharge of bankruptcy.
• Cannot locate tax returns.
• Cannot locate bank statements.
• Difficulty in obtaining verification of rent.
• Interest rate increases and borrower no longer qualifies.
• Loan program changes with higher rates, points and fees.
• Child support not disclosed on application.
• Borrower is a foreign national.
• Bankruptcy within the last 2 years.
• Mortgage payment is double the previous housing payment.
• Borrower/co-borrower does not have steady 2-year employment history.
• Borrower brings in handwritten pay stubs.
• Borrower switches to job requiring probation period just before closing.
• Borrower switches to job from salary to 100% commission income.
• Borrower/co-borrower/seller dies.
• Family members or friends do not like the home that the buyer chooses.
• Buyer is too picky about property in price range they can afford.
• Buyer feels the house is misrepresented.
• Veterans DD214 form (Discharge Papers) not available.
• Buyer has spent money needed for down payment and closing costs and comes up short at closing.
• Buyer does not properly “paper trail” additional money that comes from gifts, loans, etc.
• Does not bring cashier’s check to title company for closing costs and down payment.
The Seller:
• Loses motivation to sell (job transfer does not go through, reconciles marriage, etc.)
• Cannot find a suitable replacement property.
• Will not allow appraiser inside home.
• Will not allow inspectors inside home in a timely manner.
• Removes property from the premises the buyer believed was included.
• Is unable to clear up liens against their property – short on cash to close.
• Did not own 100% of property as previously disclosed.
• Thought getting partners signatures were “no problem,” but they were.
• Leaves town without giving anyone Power of Attorney.
• Delays the projected move-out date.
• Did not complete the repairs agreed to in contract.
• Seller’s home goes into foreclosure during process.
• Misrepresents info about home/neighborhood to the buyer.
• Does not disclose all hidden or unknown defects and they are subsequently discovered.
• Builder miscalculates completion date of new home.
• Builder has too many cost overruns.
• Final inspection on new home does not pass.
• Seller does not appear for closing and won’t sign papers.
The Realtor(s):
• Have no client control over buyers or sellers.
• Delays access to property for inspection and appraisals.
• Unfamiliar with their client’s financial position – do they have enough equity to sell, etc.
• Does not get completed paperwork to the lender in time.
• Inexperienced in this type of property transaction.
• Takes unexpected time off during transaction and can’t be reached.
• Jerks around other parties to the transaction – has huge ego.
• Does not do sufficient homework on their clients or the property and wastes everyone’s time.
The Property:
• County will not approve septic system or well.
• Termite report reveals substantial damage and seller is not willing to fix or repair.
• Home was misrepresented as to size and condition.
• Home is destroyed prior to closing.
• Home not structurally sound.
• Home is uninsurable for homeowners insurance.
• Property incorrectly zoned.
• Portion of home sits on neighbor’s property.
• Unique home and comparable properties for appraisal difficult to find.
The Closing Agent/Title Company:
• Fails to notify lender/agents of unsigned or unreturned documents.
• Fails to obtain information from beneficiaries, lien holders, insurance companies, or lenders in a timely manner.
• Lets principals leave town without getting all necessary signatures.
• Loses or incorrectly prepares paperwork.
• Does not pass on valuable information quickly enough.
• Does not coordinate well, so that many items can be done simultaneously.
• Does not bend the rules on small problems.
• Does not find liens or any title problems until the last minute.
The Appraiser:
• Is not local and misunderstands the market.
• Is too busy to complete the appraisal on schedule.
• No comparable sales are available.
• Is not on the lender’s “approved list.”
• Makes important mistakes on appraisal and brings in value too low.
• Lender requires a second or “review” appraisal.
• Pest inspectors too busy to schedule inspection when needed.
• Pest inspectors too picky about condition of property, hoping to create work for them.
• Home inspectors not available when needed.
• Inspection reports alarm buyer and sale is cancelled.
Call us at 1-4047-800-0888 or email us for assistance or with any questions.