Homebuyers generally need to proceed with caution when inspecting a property and reviewing its ownership history. Discovering an issue such as a leaking roof or an outstanding lien may delay the closing or cancel it altogether.
As noted by the Charleston Regional Business Journal, a home inspection that reveals a negative issue is one of the main causes when a real estate deal fails to close. A seller may not agree to cover the cost of the needed repairs.
Obtaining a mortgage based on a property’s condition
Potential buyers may apply for a mortgage by pre-qualifying through a financial institution. An initial approval typically provides an amount a buyer may use to buy a home, but a discovery of a structural issue in an intended purchase may cause the bank to hold back the funds.
When buyers find a property they wish to purchase, the financing company may require a thorough inspection before issuing a final mortgage approval. Depending on the inspection results, the sale may or may not occur. Discoveries of serious water or structural damage, for example, may result in buyers not receiving their funding.
Negotiating on price and creating an agreement
Before submitting a purchase offer, it may be wise to have a third-party inspection performed. Any number of issues, such as those involving mold, plumbing or an HVAC system, may require costly fixes. A buyer and seller may then negotiate a lower purchase price to reflect the cost of the repairs.
When both parties are agreeable to a deal involving a property requiring repairs, a buyer and seller may create an appropriately worded purchase agreement. Buyers may also wish to include terms allowing them to rescind an offer if a title search reveals a seller does not possess full ownership rights to sell a property.