Top 5 Real Estate Investing Deal Breakers

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Whether you are buying or selling investment properties, it is important to be aware of common deal breakers. New investors can avoid losing deals by taking preventive measures when they sense that a deal may be going awry.
1. A disagreement over fixtures arise in the course of the transaction.

A seller should always be clear and upfront about the disposition of fixtures on the property. All too often, a buyer believes that he or she is receiving a gorgeous chandelier, appliances or other fixtures included with the purchase of a home. When the sale date comes, a buyer may be dismayed to see that the fixtures have been removed from the home and may want to sue for breach of contract. A buyer and seller can avoid this unfortunate and awkward experience by clearly defining the disposition of assets in a prewritten agreement. This will avoid any surprises on the closing date.

2. A buyer loses financing for a home due to poor credit.

If a buyer is excited about moving into a new home, then he or she may purchase appliances for the home without realizing the impact of these purchases on his or her credit. A real estate investor who is selling a property should always disclose the risk of making major purchases like this to his or her potential buyers. Buying major appliances can cause one’s credit to take a hit. The consequence of this could be that a lender revokes financing for a home.

3. Failure to disclose hidden defects in the home.

If a seller fails to disclose hidden defects in a home, then he or she can lose an entire deal at closing. A buyer may sue for breach of contract. A seller could also be liable for damages under a misrepresentation cause of action for a failure to disclose these defects. Every seller should be clear about defects in a home and whether the defects will be repaired before the closing.

4. Failure to carefully read through a title report.

Buyers frequently are frustrated when they learn that a neighbor has an easement on a property. To avoid frustrations, a buyer should always review a title report. A seller can even avoid legal issues by disclosing any easements that exist on the property.

5. Misunderstanding of the short sale process.

If a buyer is purchasing a short sale home, then he or she should be prepared to enter into a transaction that may take years to complete. Buyers may be able to find better investment opportunities.

Anticipating these circumstances can help a buyer or seller avoid deal breakers. Deal breakers waste every party’s valuable time, and it is best to avoid them at all costs.


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