Selling a residential property is a significant transaction, and one that involves multiple financial and practical considerations. While most sales are finalized successfully, there are many reasons why a transaction can be delayed and sometimes derailed entirely, resulting in losses for the seller. Understanding these potential pitfalls can help you avoid them and ensure a smoother close.

The following are the most common causes for a real estate sale to falter:

1. Inaccurate or incomplete disclosure — All residential property sales required a full disclosure by sellers about the condition of the property. Whether intentional or accidental, omissions regarding defects (such as water damage, foundation issues, or unpermitted work) can lead to problems during inspections or after closing. Be upfront about any known issues and complete all your disclosure forms thoroughly. A pre-listing inspection, performed by a licensed professional, can also help identify problems before they surprise you or your buyer.

2. Unclear or unresolved title issues — Title problems such as liens, unpaid taxes, encroachments, or conflicting ownership claims, can halt a sale in its tracks. Buyers and their lenders require clear, marketable title. Sellers should check their title records and resolve any issues before listing the property. Collaborate closely with your real estate agent to ensure all documentation is in order and any issues are addressed before they impact the timeline.

3. Financing snags — Another common stumbling block is the buyer’s inability to secure financing. Pre-approvals are helpful but not guarantees. Buyers might not secure the final loan due to credit changes, income issues or property appraisal discrepancies. While you can’t control the buyer’s financial situation, you can minimize risk by carefully vetting offers (prioritizing cash or well-qualified buyers) and requiring a formal mortgage commitment within a tight timeframe.

4. Appraisal shortfalls — If an appraisal comes in lower than the agreed purchase price, the buyer’s lender may not approve the full loan amount, leading to renegotiation or even deal termination. To avoid this, set a realistic asking price based on comparable recent sales and be flexible if the appraisal is close to market value.

5. Inspection surprises — Even after thorough disclosure, inspections can turn up unexpected issues that prompt buyers to request repairs or concessions. Significant issues may cause buyers to walk away entirely. Reduce this risk by investing in necessary repairs before listing and consider doing a pre-inspection to uncover and address hidden problems.

6. Missed deadlines and poor communication — Delays in responding to repair requests, submitting paperwork or coordinating with escrow and title companies can break momentum and erode buyer confidence. Set clear expectations regarding communication and timelines with your agent, and make yourself available to respond quickly as issues arise.

By being proactive, you can dramatically reduce the chance of your home sale going off track. An experienced real estate attorney can provide guidance throughout this process, helping you achieve a stress-free and timely closing.

Favaro, Lavezzo, Gill, Caretti & Heppell, PC in Vallejo has decades of experience providing sound advice and effective representation for real estate clients in Solano, Contra Costa and Napa counties. If you are seeking counsel as a buyer or seller in a transaction, call us at 707-674-6057 or contact us online.