“5 Signs It’s Time to Walk Away from a Home Purchase”
Zillow Almost Gets it Right
Getting into contract on a home purchase can bring up a little of all emotions; excitement, fear, sadness, happiness…RAGE!…your emotions can literally run the gamut when purchasing a home.
This morning I saw this post from a contributor to Zillow and I couldn’t help but put my own spin on it. While these 5 reasons could indeed result in a cancellation of the agreement, they could also help you in getting a much better price on a home you thought enough of to offer on and, especially in our market, fight for.
I have advised a buyer or two to walk away. A buyer or two has told me they need to walk away. In all cases, as an experienced real estate professional, you try to save it. It’s part of our job to help our clients through the myriad of issues that come up in any real estate sale.
Because emotions can run high, sometimes people feel overwhelmed and just need a little reassurance as well as a night to sleep on it. I’ve saved many more potential cancellations of sales than I’ve lost.
Here’s my spin on this article.
#1 – The Appraisal Comes In Low
Essentially there are three ramifications of this. They are:
1. The buyer has to come up with more cash.
2. The seller lowers the price of the home to match the appraised value.
3. The buyer and seller cancel.
I’ve had low appraisals many times and in all cases, the seller has come down to the appraised value and saved the buyer money. The likelihood of a seller cancelling in our market is very slim.
In over the 14 years I’ve been selling real estate in our area I don’t know if I’ve ever seen it happen that the appraisal comes in low, the buyer says “I’ll pay appraised value” and the seller says “no”. It does happen but it’s very rare.
By the time the appraisal comes in, the sale is at least 20 to 23 or so days into the escrow. Inspections are done, the buyer is ready, the loan is approved save the appraisal and the seller has already, in most cases, made their plans as to where they are going. No one wants to cancel for a low appraisal when a deal is worked out and virtually days from closing.
The article cites that if there are multiple offers, why wouldn’t the seller take one of the other offers? After 20 days, the buyers with those offers are long gone onto other opportunities. Even with the low inventory levels that we currently have in South Placer county, there will always be other opportunities.
In my view, representing a buyer, a low appraisal is a reason to celebrate not cancel.
#2 – The Inspection Report Shows Too Many Issues
It’s not my job to “inspect” a home beyond a simple visual inspection when selling it. However, experience is a good teacher. If I’m walking around a home and I see major 
damage due to wood destroying organisms or other damage, I’m going to say something upfront.
90% of the issues I’ve seen with home inspection reports are visually obvious. It does happen where there is a problem with a foundation or some other problem that is “hidden” so to speak but it’s rare.
Certainly, if a buyer isn’t comfortable with the issues with the house and the seller won’t negotiate a better price then by all means cancel but why not use the issues to negotiate a better price or ask the seller to contribute an amount to repair whatever issues there are?
If I see a lot of issues I’m going to say something or advise my client to not offer on the property at all. Being that we wouldn’t be in escrow to begin with, there’d be nothing to cancel.
Only a highly disrespectful or inexperienced agent wouldn’t do this.
#3 – You’ve Made A Compromise That Doesn’t Sit Right With You
I’m always ready to cancel. It’s fact of this industry. To this point, I always ask my client if they’re sure regarding virtually every decision. If I hear anything in their voices that sounds unsure, and yes I do listen for that, I push for a face to face meeting to work through it.
If we can’t come to a decision, together, that works out for them then yes, cancellation may be an option depending on where in the sales process we are and whether or not there is a deposit at risk.
It does happen but if an agent is doing their job upfront, these kinds of issues come up very, very rarely. As a Realtor, you’ve got to be in touch with your clients and you’ve got to listen to them every step of the way.
If you do, you head off issues before they happen. Negotiation is always an option.
#4 – You’ve Pushed To The Very Top Of Your Price Range
In some markets, this can happen but again, I think the job of a real estate professional is to reign in their clients on some issues. The example that the author uses supposes there are no more homes on the market to offer on or that none will come up.
No one forces you to offer $50,000 over what you think you can afford unless there is a source of money, like a loan from a family member or other resource that can be used if needed.
Doing this if you can’t afford it is asking for a cancellation and shouldn’t ever happen if your Realtor is looking out for you.
While it’s none of your Realtor’s business how much you’ll spend on a home or where the money comes from, he or she should be looking out for your best interests and asking questions.
#5 – You’re Purchasing With Another Person and You Aren’t Both 100% on Board
First, everyone being on the same page should happen upfront not somewhere in the middle of the sales process when the buyer could lose their entire deposit.
While, yes, it happens where one person gets down to the wire and gets cold feet, this happens more often with 1st time home buyers than it does with anyone else. This is mostly because their agent hasn’t been “hand holding” them enough through the process.
“If one feels the tiniest bit uncomfortable with a real estate deal, it’s time to jump ship” is shabby advice. Most people feel nervous about buying a home and the first time it can be scary but if you’ve done your work upfront and 
the payment can be comfortably made, a bit of trepidation is healthy.
By all means if you’re completely uncomfortable with the purchase then cancel but not being 100% on board is more about other mitigating factors then just feeling unsettled. If you’re just not comfortable with the purchase why would you offer on it in the first place?
Now if a delay were to happen in the sale for some reason, the buyers interest rate lock has expired and the rate goes up beyond where the buyer can afford the payment then yes, that is a sure reason to cancel and the deposit wouldn’t be at risk if the agreement was properly constructed.
Of the items on this list, I can’t find a real reason to get out of a sale if your Realtor has done their work upfront and you’re listening to them.
While every Realtor/agent can’t be depended on for honesty, some can and should give you reasons not to go forward if they see them.
That’s my take. 
Thanks for visiting!
I can sell your home in 30 days or less for top dollar. Please call or text me directly at 916-532-7653 or click here, for my contact page and let’s talk about how I can help you.
Saxe Realty Services is the most comprehensive online source for South Placer County real estate information. Whether you are looking for the latest sales, trends or homes for sale in South Placer County, Saxe Realty Services has it all at your fingertips.
Subscribe to Saxe Realty Services by Email
