real estate deal breakersMaking sure your real estate investing deals close begins by fully understanding where things can go sideways. When you are dealing with dynamic parts of any project – staying on top of people, systems and murphy’s law – it can be exhausting when you are in the middle of a deal.  As a real estate investor you need to be constantly asking your self this  critical question: “what can go wrong between now and a successful closing?”

To be a successful real estate investor you need to close deals  – period. To do this you must be aware of “weak points in your deals” and be ready to handle and prevents any issues that might arise BEFORE they actual happen.  For example, buyers can often use a technical issue – like the inspection – as a real excuse to get out of the sale especially if they are experiencing cold feet. Take away the element of surprise with disclosures or your own pre-inspection.

How Do Real Estate Investing Deals & Transactions Fall Apart?

It’s up to you to keep things on track. There are many reasons real estate deals & transactions falls apart. I’ve boiled it down to 5 common critical components & issues that most real estate investors face at one time or another when a deal is in je0pardy.

Deal Breaker #1 – Inspections & Repairs

How   Deals Go Wrong Investor   Solutions
Unexpected Findings Investor/Seller gets   pre-inspection
Unable to   read/understand report Assist buyer with   reading report
Costs &   who pays Pre-negotiated limits   or credits or disclaimers
Timetable for   repairs Get written estimates   from contracts
Doubt about   integrity of home Communicate, prepare   and reassure your buyer

Deal Breaker #2 – Appraisals

How Deals Go Wrong Investor Solutions
Won’t   support the price Provide Appraiser with research
Won’t support the loan Help find additional buyer funds/credits
Doesn’t match the comps Appeal the appraisal

Deal Breaker #3 – Loan Approval & Funding

How Deals Go Wrong Investor Solutions
Application   delays Buyers should get pre-approved
Documentation problems Assist buyer with paperwork
Buyer credit issues/changes Assist buyer with credit counseling
Lender failure to approve Reapply with corrections
Lender failure to fund Have a back-up lender to suggest
Property title/ownership not clear Make sure your contract/title gives you right to sell

Deal Breaker #4 – Deadlines

How Deals Go Wrong Investor Solutions
Inspections,   Repairs, Showings Confirm appointments and status
Closing date Choose flexible times/location
Occupancy Firm dates, limits in contract
Approvals/documentation Manage the closing checklist

Deal Breaker #5 – Miscellaneous Contingencies

How Deals Go Wrong Investor Solutions
Estate,   relocation and short sale approvals Know who, how & timetable
Clouded title Preliminary title search
Bad agent   advice/communications Clarify messages & intentions
Inattention to details Own the process & communicate

Saving the Deal

If you dot your I’s and cross your T’s there won’t be many surprises that would hinder you from achieving a successful real estate deal closing. If you are always aware of potential problems and deal breakers you’ll catch things early before they put the closing at risk. Proactive actions, early response and staying up top of your checklist will keep the wheels on track of all your real estate deals regardless if your an investor buyer or investor seller.

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