Most common reasons home sales fall through
RE/MAX Southern Africa shares reasons a sale might not go through, and how to solve the problem.
The deal is done and the OTP has been signed. Sadly, this does not guarantee that the sale won’t still fall through midway through the process.
To help sellers prepare themselves for any possibility, RE/MAX of Southern Africa shares some of the most common reasons why property sales fall through before the deal can be concluded:
1. The buyer’s bond application is rejected
Especially now that interest rates are so high, the possibility increases that the buyer might not be able to qualify for the full bond amount they once thought they could. If this happens, and the buyer is unable to source the funds elsewhere, the sale will fall through. This is why sellers often prefer cash offers or offers where buyers have been pre-approved for a home loan, either by their bank or through a bond originator.
2. Suspensive conditions aren’t met
A suspensive condition is something that needs to be met before the transaction can proceed. Bond approval is one of the most common, but there could be others included in the OTP. These would normally be listed as follows: “[…] is subject to and conditional upon the fulfilment of the following suspensive conditions:”.
The buyer would then list the conditions, which could include things like the seller needs to remove any structures that do not have planning approval, or the home needs to pass an additional home inspection arranged by the buyer. If agreed to by both parties, these conditions need to be fulfilled before the sale can proceed.
3. An issue is uncovered during the required inspections
Before the sale can go through, the seller needs to acquire the necessary certificates of compliance (CoCs) to show that the home meets the minimum standard for safety. This includes electrical, plumbing, gas, and beetle compliance certificates.
If an issue is discovered, the seller needs to fix it at their own expense. If, for whatever reason, they take too long to do so, the offer might expire and (depending on the wording of the OTP) the buyer can choose either to extend the offer or cancel it.
To help avoid the chance of the offer falling through midway, regional director and CEO of RE/MAX of Southern Africa, Adrian Goslett encouraged both buyers and sellers to be as transparent with their chosen real estate professional as possible.
“The more information both parties provide to their real estate agent, the better their chances will be to avoid complications down the line.
As experts in the property industry, real estate professionals can often provide solutions before they become problems – but this can only happen if they are aware of the possible issues upfront. If ever you are unsure of something, rather speak to your agent and ask for clarity,” he concluded.
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