Real Estate Deal Breakers

Common real estate deal-breakers

Real estate professionals are trained in the art of shepherding a property sale from contract to closing. They counsel their buyers through every step of the lending process, mediate between buyer and seller while inspections and repairs are completed, and reassure nervous sellers that the buyers' financing will be sewn up tight by closing.

But the best laid plans of buyers and sellers can and do go awry from time to time, especially amid the stress and fatigue of a pressure-cooker deal between highly motivated buyers and sellers.

A disappearing ficus tree, secrets under the dining room rug, erroneous inspections and a particularly contrary house cat are just a few of the last-minute deal breakers that have quashed or threatened real estate transactions. And while deal breakers by their very nature are not typical, they do tend to arise from several common areas.

The single most common deal breaker? The buyer's financing falls through.
This is understandable, considering that a typical home sale actually involves two contracts: one between the buyer and seller, the other between the buyer and his or her lender. Where big money is at stake and the ticking clock is exerting additional pressure, there is no such thing as a sure thing.

A deal can fall through when the buyers fail to maintain the financial status upon which their loan was based.

"The buyers spent way too much money before closing and when it came down to a few weeks before closing, they couldn't qualify for their loan anymore," she says.
Dick Pelosi, broker-agent with Century 21 Advance Realty in suburban Boston, says the old industry phrase "Buyers are liars" sometimes applies to their loan documents.
"Getting prequalified or preapproved, that's easy to do," he says. "When it comes down to it, can they get the loan commitment? That's where it's always shaky. People lie on the application or they can't produce their pay stubs."

Every real estate agent's nightmare is a renegade inspector.
Because most inspectors' livelihoods are based on agent referrals, their reports tend to be fair but not overly picky. Once in awhile, however, they can be flat-out wrong, as Brook Ashley, a broker in Montecito, Calif., found out the hard way. "I had an escrow fall out when an inspector said a beam was way too long and not structurally correct. After a lost escrow and $10,000 later, a structural engineer came in and said actually it's not one beam but two beams and they are joined twice as well as they need to be. But we lost the sale."

Property condition issues also can doom a sale.
"I had a listing where the seller had redone a house magnificently, but underneath this gorgeous area rug under the dining room table, he hadn't put hardwood floor in," according to Paulette Koch, broker with The Corcoran Group in Palm Beach, Fla. " I was in shock. Everyone was in shock. If he had just told everyone, it wouldn't have been the end of the world. When people have the knowledge upfront, they're usually fine with it. People just don't like surprises."
Ashley's quick thinking one morning saved a $4.5 million sale.

"The buyer walked in and said that the seller had taken a potted ficus tree and they were going to cancel this morning's closing. I found a ficus. It couldn't have been more than a $70 ficus, but I found it at 8 o'clock in the morning. It could have just been a bluff but it didn't feel like it to me."
Homeowner associations also car spoil a sale at the last minute when the prospective buyer discovers unacceptable restrictions, such as "no pets."

"Our real estate contract now requires the seller to deliver the last six months' minutes of the homeowner association," says Kraft. That way, deals won't fizzle because a buyer belatedly discovers an association rule that nobody told him or her about.

But the award for strangest deal breaker goes to Ashley.
"I had a condo sale where we were in escrow with a little old lady whose only companion was a large, vicious, horrible Himalayan cat named Miss Kitty. She called to cancel escrow because she said she had talked to Miss Kitty and Miss Kitty said it wasn't the right thing to do.
"We canceled it on Miss Kitty's hiss. That was fun telling the selling agent."