EXCERPT: Most home buyers and sellers don’t think much about what might derail their purchase or sale. But here’s a sobering fact: One of every 20 sales contracts blows up along the road to closing. And roughly one of every four runs into an issue that delays the scheduled settlement. These statistics come from new survey research conducted by economists at the National Association of Realtors, covering the period of December 2016 through February of this year.
Guess what’s the No. 1 real estate deal killer? Home inspections. Nearly one third of all terminated real estate contracts crashed and burned because of the inspection results. Inspections also ranked as the No. 3 cause of delayed settlements, accounting for 13 percent.
Many or most of those deal-killing or delaying inspections probably turned up legitimate defects that the buyers needed to know about. But some went a little too far. Take this example provided by Diana Dahlberg, broker and owner of 1 Month Realty in Kenosha, Wisconsin. She was representing home buyers who hired a local inspector. When the inspector examined the furnace, recounted Dahlberg in a post on ActiveRain, a real estate networking and educational website, “he went crazy saying there was a cracked heat exchanger,” then turned to the seller, who was nursing her baby, and said, “If you don’t want to kill your baby, you better get a new furnace right away.”
Both the seller and the buyers “freaked out” at hearing this. Later that day the buyers canceled the contract. On subsequent inspection, Dahlberg told me, “there was no crack in the heat exchanger.” There was nothing wrong. The sellers were so upset that they took their house off the market. Continues…