Save Your Real Estate Deal: What Can You Do If a Deal Starts Falling Through in 2023
Picture this. You are getting ready to purchase your next investment property. The house is perfect for your portfolio and has a ton of cash flow potential. Then suddenly, something goes wrong, and you are at risk of losing the real estate deal.
What can you do to save it?
It is always frustrating to see the perfect investment property begin to slip between your fingers. However, do not lose hope yet. Instead, take a moment to assess the situation and look for a solution that may be able to save your real estate deal.
To help you properly assess your position and save your next real estate deal, here are some tips to help you recover your next struggling real estate deal.
However, before we dive in, if your real estate deal is struggling due to a financing concern the first thing you should do is contact a mortgage broker to see if they can fix it. To help you gets started, click the link below to book a free strategy call today.
Assess Your Goals (And the Seller’s)
Some of the first things you need to consider when analysing a real estate purchase are the seller’s goals and your goals as the buyer.
Typically, if these goals do not match up, it can lead to conflict within the deal. For example, if someone is selling their home with the hopes of another family moving in, but you see the property as a potential flip, the seller may be hesitant to sell the property to you.
Differing goals between a buyer and a seller do not have to be the end of the deal though. Often you can convince the seller to continue with you by appealing to their wants. In the case of the previous example, you may be able to get them on board by assuring that once you finish rehabbing the property, you intend to sell it to a family looking for a newly updated home.
If you cannot find the issue by assessing the goals of the parties involved in the sale, you will need to look further.
Understand Why the Deal is Failing
After you have gone over the goals of everyone involved in the purchase, it is time to look for other problems.
Financing Problems
One of the most common problems that people can run into when trying to purchase a property is money. Financing issues can occur for a variety of reasons, but frequently there are solutions that can be found to remedy these concerns.
For example, perhaps the appraisal on a property comes back and the property is worth significantly less than the asking price. As a result, the lender may refuse to finance the deal because of the skewed price. So, in order to save the deal, you can either negotiate with the seller to agree to a lower, more appropriate price, or speak with your mortgage broker and attempt to find a lender who is willing to finance the deal.
In order to reduce the chances of encountering any financing issues when buying property, you should start by getting a pre-approval from an experienced mortgage lender. This will not only allow you to lock in the lowest available mortgage rate and get a clear picture of how much you can afford, but you will also get a clear image of your lender’s expectations from you and the deal.
Poor Communication
Communication is key in real estate and without it, do not be surprised if your next deals end up on the rocks. If communication is lacking on the behalf of anyone involved in the purchase, it is possible that conflict will quickly arise and spoil an otherwise solid deal.
One of the leading areas where communication problems begin is in the property listing. If the information in the listing is unclear or inaccurate, it can quickly begin to turn away buyers. For example, say the seller lists the property as a four-bedroom home, but once you see if there are only three bedrooms and an additional room that can be potentially repurposed as one.
This can cause conflict because some lenders may look at a property differently if it is a proper four-bedroom house or if it has 3+1 bedrooms. This can often impact the valuation of the home in the eyes of the lender and can often cause financing problems. It can also cause problems for the buyer because the home may not fit their plans or investment strategy.
No Urgency and Unexpected Delays
Much like how poor communication can spoil a purchase, delayed and slowly handled processes can cause serious conflict. No one wants to spend longer than they have to working on a deal. Instead, they would much rather be making progress so everyone can achieve their goals.
However, if things such as home inspections or important documents wind up delayed, it can become a serious problem. Not only will most lenders not move forward until they have all of the information laid out for them, but both buyers and sellers may begin to feel like the other party is not serious about the deal if they see they are taking their time upholding their side of the deal.
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Consider The Options for Your Real Estate Deal
After you have determined the cause of the problem, you have two options to choose from. These are:
Attempt to Save Your Real Estate Deal
If the problem facing the deal is one that can be reasonably remedied, go ahead and take the time to step up and do what it takes to close your real estate deal. This way you can walk away with the property you were hoping to buy.
Walk Away
If the problems facing your real estate deal deal are too big to overcome, do not waste your time trying to fix the deal just to watch it fall apart again. Sometimes despite being an attractive opportunity, a property may not be a good fit for you and your investment strategy if it comes with a series of roadblocks that you have too past first.
Reminder: A Pre-Approval Can Help You Avoid Conflict
Just remember, one of the leading causes of failed real estate deals is financing problems. So, let us help you have the best chance at avoiding these issues.
Our agents at LendCity are here to help you secure the best pre-approval available for your next real estate deal. That way you can get the best available rate and the highest available financing for your purchase. To learn more or get started today, visit us at LendCity.ca or give us a call at 519-960-0370. Alternatively, click the link below to book a free strategy call with our team at LendCity today.