Problems encountered for a delay of contract closing were due to:
1. Issues related to obtaining financing - 21%.
2. Appraisal issues - 26%.
3. Home inspection/environmental issues - 8%.
4. Titling or deed issues - 11%
5. Contingencies stated in the contract - 6%
6. Issues in the buying/selling of distressed property - 2%
7. Other - 26% (???)
Problems in terminated contracts:
1. Appraisal issues - 13%
2. Issues related to obtaining financing - 7%
3. Buyers lost job - 1%
Note that in both groups, appraisals were the largest issue, not unexpected in the huge and fast rise in home prices in the country as a whole. Low appraisal values are sometimes overcome by the seller being willing to make an adjustment, the buyer having more money to put in, or a loan adjustment made when the buyer is already making a large down payment, or a switch to a different type of loan, or an increase in value when nearby properties justifying the price have just closed escrow. If there is enough market data, an inperson appraiser visit may be waived and online data is viewed as satisfactory. This doesn't always work though, and buyers and sellers must not assume that there won't be a problem with trying to close a price that is $100,000 over list. Agents really have to know their local market pricing to avoid an appraisal issue.
Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996
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