When you make the decision to buy or sell a home, the last thing you expect to happen is for the sale to fall through. Unfortunately, it can happen, often through no fault of your own. But figuring out how to handle the aftermath in a legal way is essential if you want to move forward. Let’s take a look at a few common reasons why closings fall through and what legal steps you can take with help from a Minnesota real estate attorney after the sale can’t proceed.
Why Closings Fall Through
Closings can fall through for many reasons. The most common include the following:
- Mortgage issues: If the buyer’s finances aren’t in order before closing or the lender stops the approval of their loan for any reason, closing can fall through.
- Breach of contract: If either the buyer or seller fails to follow through with the terms of the contract they agreed to, they can be in breach of contract, potentially causing closing to fall through entirely.
- Failure to appraise: If the home’s appraised value falls below the buyer’s financed amount, the lender may not approve the loan and closing may fall through.
- Title problems: If there are issues with the title like outstanding liens or questions of ownership that can’t be resolved before closing, the closing can fall through.
- Inspection problems: If the buyer’s home inspection uncovers issues that the seller won’t resolve or that both parties can’t come to terms on, closing may fall through.
Your Minnesota real estate attorney can review the contract and the circumstances leading up to closing to help you understand what’s causing problems and what options you may have to get closing back on track.
What Sellers Can Do
If the closing falls through because of the actions of the buyer, sellers have options. They can legally walk away from the sale and start the process over. They can attempt to negotiate with the buyer to reach new terms that allow the closing to proceed. And if needed, they can take legal action against the buyer to recover monetary damages suffered by the failed closing.
Your Minnesota real estate attorney can help you determine which option is best for your situation based on the unique circumstances surrounding your home sale.
What Buyers Can Do
If the closing falls through because of the actions of the seller, buyers may be able to walk away, especially if the seller breached the terms of the contract. But if the buyer is still interested in the home, they have other options. They can negotiate with the seller to try to find a resolution that allows the closing to proceed. They can renegotiate the sale so the terms are more favorable. And they may be able to take legal action to sue for economic or monetary damages suffered by the failed closing.
If the closing falls through because of a lack of financing, buyers may not be able to take legal action against the seller. Instead, they’ll need to either renegotiate the purchase price, find a way to come up with the cash difference between the purchase price and what the lender is willing to give them, or apply for financing with a different lender.
If your closing failed, speak with your real estate attorney as soon as possible. They’ll be able to give you the advice you need to make the best choice for your situation.
Schedule a Consultation Today
Delayed or failed closings can make everything more difficult for both buyers and sellers. That’s why working with an experienced Minnesota real estate attorney from the very beginning is so important. You’ll gain access to advice and have an expert you can trust to help you navigate any challenge that presents itself. Contact us today to schedule a consultation and let the team at Waypoint Law simplify your next home sale or purchase.