Common real estate issues and how to resolve them.
At Nuvilla Realty, our commitment is to streamline the real estate process for you. However, each transaction is unique and can face its own set of challenges. To keep you informed and prepared, we’re shedding light on common issues that can arise when buying or selling a home in Texas, and offering insights into less common, yet significant, hurdles that may impact your deal.
Inspection Report Issues
Inspection reports can unearth significant issues, often referred to as the big 5: HVAC, roof, foundation, electrical, and plumbing problems. These are the main deal breakers due to the high cost and effort required to address them. Sellers may need to make repairs or negotiate the selling price, while buyers must decide whether they’re willing or able to take on these challenges.
Appraisal Issues
Appraisals provide a professional valuation of a property. If a home appraises for less than the sale price, it can derail financing and negotiations. Sellers might need to lower the price, or buyers may have to cover the difference. For VA loans, appraisers might also mandate repairs before moving forward. Negotiation is key, but not always possible.
Liens on the Home
Liens are legal claims against a property for unpaid debts, ranging from mortgages to contractors’ liens, and even tax liens. They must be resolved before a sale can proceed, which might involve paying off debts or disputing the lien if it’s incorrectly placed on the property.
Buyer Losing Financing
A buyer’s financing can fall through for reasons like job loss, changes in credit score, or altered financial circumstances. This can abruptly end the buying process unless alternative financing is quickly secured.
Divorce Settlements
Divorce can complicate real estate transactions when a property must be sold as part of the settlement. Ownership and proceeds must be negotiated and legally documented, which can delay or derail sales.
Heirship Issues/Affidavits
When a property owner dies without a clear will, determining the legal heirs and their rights to the property can introduce delays. Heirship affidavits and legal proceedings may be required to clear the title for sale.
1031 Exchange Issues
A 1031 exchange allows investors to defer capital gains taxes by reinvesting proceeds from a property sale into a new property. Timing, eligibility, and paperwork issues can complicate these transactions, requiring careful management.
Contingent Home Sales
These occur when a buyer’s ability to purchase a new home depends on selling their current home. If the buyer’s home doesn’t sell in time, it can cause both transactions to fall through.
Buyer Backing Out After Option Period
If a buyer backs out after the option period has ended, the earnest money (a deposit showing the buyer’s good faith) is typically forfeited to the seller. This compensates the seller for the time the property was off the market, but it can also lead to disputes over the earnest money.
Additional Issues That Can Arise
- Zoning or Land Use Issues: Unexpected zoning changes or discoveries about land use can affect the ability to use or develop a property as planned.
- Environmental Concerns: Discoveries of hazardous materials (like asbestos or lead) or protected habitats on the property can lead to costly remediation or legal constraints.
- Title Issues: Beyond liens, other defects in the title, such as errors in public records or undisclosed heirs, can complicate ownership transfers.
- Survey Discrepancies: Disputes over property boundaries or the discovery of encroachments (like a neighbor’s fence on the property) can require legal resolution
- Homeowners Association (HOA) Restrictions: Buyers might find certain HOA rules or fees objectionable, potentially impacting the sale.
