Buying a home is one of the biggest purchases many people will make in their lifetime. With such a huge transaction can come some problems, but doing your research and having a knowledgeable real estate agent by your side can help you avoid some of the common issues that may arise when purchasing a home. To help you prepare I’ve put together a list of the most common problems that come up when purchasing and closing on a home, and what you can do to avoid them. Buying a home is not just about the luck of the draw it’s about stacking the odds in your favor.

Financing falls through
Although it is not a very common happening, sometimes when you think the deal is running smooth or you are all set to close it can fall through. This extremely frustrating stroke of bad luck can happen for a few reasons including errors on the buyer’s credit report or buyers taking out a personal loan right before closing changing the entire dynamic of your initial loan application.
And it may not be in your favor. Or, making large purchases on a credit card. You know? Like the Rooms to Go, 0% interest for one year credit cards that allow you to buy an entire living room of fancy furniture with no out of pocket money. The first step a buyer can take to hopefully avoid this issue is to get pre-approved before starting their home search. Your lender will review your credit thoroughly upfront and let you know if there are things that need to be addressed before they give you the okay to go make an offer on a home.
If you have any concerns though about your credit history or anything else regarding your finances, lets discuss them early on and address them early on!
Additionally, if you didn’t already get the gest, please avoid making large purchases before closing as that may affect your credit and loan application and cause your loan to fall through last minute.

Make sure to continually touch base with your agent during the approval process to confirm that everything is on track and that you’ve provided all the necessary information.

Did you know? According to a recent survey by realtor.org, among those who financed their home purchase, buyers typically financed 90% of the home price.

Liens on the house
While purchasing your new home, a title company will need to do a title search on the property and will also need to issue title insurance. The purpose of the title search is to confirm that there are no other claims to the property you are trying to buy (such as any government agency, relatives, the state, etc). If there happens to be any sort of lien on the property, it will need to be addressed and resolved prior to closing.

The best way to avoid this type of issue when you are the buyer is to make sure your agent gets in touch with the title agency closing the transaction and ask for a copy of the title search at the beginning of the process.

Costly insurance
When considering a home you will want to have a very good estimate on home owners insurance on the property. You will also want to have your agent help you to find out if there are any special insurance requirements on the home. For example, is the property located in a flood zone?. If so, ask for a copy of the elevation certificate so you can get an accurate quote. If the owner does not have one make sure your agent places a stipulation in the offer to request for one to be done for you.
If the home you want to buy is located in a high-risk area, the cost to insure the property may be more than you want to pay or more than a lender is willing to approve.

While some homes may cost extra to insure, there are some properties that may be uninsurable altogether. For example, if there is a pervious insurance claim on the property for something such as mold or water damage, your insurance company may think the property is too high-risk and can deny insurance. It all comes down to doing as much due diligence upfront.

Did you know? According to ehanceinsurance.com, home insurance was “invented” in London in 1667, and was popularized in the US by Ben Franklin.

Problems found during your final walk-through
Hopefully this does not ever happen to you. But, a home purchase can fall through at the last minute if your final walk-through inspection reveals major defects. For example, a pipe busted underneath the sink and flooded the kitchen floor. Of course, this is most likely a fluke incident that just happened so hopefully the seller will make everything right, as quickly as possible. Or, the washer and dryer that were supposed to stay are now gone. This could have been an honest oversight and again, the seller will fix the problem. But, being proactive is your best bet which means making sure your contract reads very clearly what happens in this worst case scenarios.
Most contracts have a clause that speaks to the condition of the home and how it should be prior to closing. You want to see that in writing and you want an agent that is not afraid to push back if the seller tries to wiggle out.
Bonus tip: Ask your agent to take photos of appliances, ceiling fans, piping, etc. to document condition and contents so if there becomes an issue you have a visual on how things need to be.