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Home Buying: Deal Breakers To Be Aware Of

Finding a home you want to submit an offer for, and then getting that offer accepted can be some of the toughest components of the home buying process. But there are still several hurdles and deal breakers to overcome to ensure closing day goes off without a hitch.

Preparing for the possible pitfalls along the way can help make the buying process more manageable and less stressful for both buyers and sellers. Your Usaj Realty broker will walk you through each of these steps and thoroughly prepare you for what is to come.

Home Inspection

This critical piece of the home buying experience can often make or break the deal, and tends to create anxiety on both sides of the aisle. Recommended for anyone serious about a home purchase, this two- to four-hour examination of a home reveals the inner workings of the house and may provide additional facts for negotiation on the final price.

Based on the findings, the potential buyer can go back to the seller and ask for concessions on the price or ask that certain items be fixed prior to closing. A home inspection generally will cost $250 for some townhomes, and up to $600 +  for single-family homes, depending on the square footage. There are ancillary services that can be added on as well, such as radon and mold testing, and sewer scope inspection. There can also be an additional fee if the home is over 50 years old as these inspections may take longer.

Title Search

Before a home can be transferred to a new owner, the title of the property must be clear. As a result, a title “search” must be conducted to prove there are no outstanding liens or claims against the property. This search is usually performed by a title company or lawyer representing the buyer. The process involves looking at records at the county level as well as taxing entities that would indicate any outstanding bills, legal proceedings or other issues. A title search can take a few hours to a few weeks to complete. During this process, title insurance is issued to both the buyer and lender to protect the parties if someone challenges your title to the property.

If there are problems with the title, the seller must rectify the situation and clear the title. Lenders will not approve a loan until the title is completely clear.

Buyer Backs Out

After a house is under contract, the buyer provides earnest money that is kept in an account managed by a reputable third-party (i.e. real estate brokerage, title company, escrow company, etc.). This money proves to the seller that the buyer is serious about the purchase and will take the necessary steps to seal the deal.

However, it doesn’t assure the buyer will ultimately purchase the house. If there are major issues say with the home inspection or the property doesn’t properly appraise, the buyer can renege on the contract and get the earnest money back (provided contingencies in the contract allow this). Or, the buyer may decide to change their mind and forfeit the earnest money. In this case, the seller is at least compensated by collecting the earnest money for the time that the home was off the market.


Most people buying a home will need a lender to help them make the purchase a reality. Before even starting the search for a new home, buyers should know how much they can afford to spend on a home. It’s imperative to be “pre-approved” for a loan before going under contract.

Pre-approved means the person has submitted all documentation, there has been an income analysis, the documents have been verified and someone has reviewed the paperwork in a similar fashion to that of the underwriter. Once you are under contract and formally apply for the loan, you may need a few updated documents before submitting to underwriting but overall, everything is in order and you have better results. It makes for a smoother loan application process.

Lack of attention to the financing piece of the equation can be aggravating for the seller and be an unnecessary stumbling block to closing on a home.

Problems with Insuring a Home

It’s no surprise that obtaining homeowners’ insurance is a requirement of mortgage lenders when going through the home buying process. What may be surprising is the amount of detail that goes into adequately covering your home. It’s important to make sure you have adequate coverage on your home in the event of any property damage.

If there has been major water damage or mold issues, most insurance companies will not take on the risk to cover a defected home. You may want to ask the seller ahead of time what insurance company they are using and whether you can continue the coverage.


Whether someone is buying a home, having the right square footage for the listing and an accurate value of the property matters. This is why a home appraisal is a necessary piece of the road leading to closing. As a buyer, you need to know the exact valuation of the home based on its location, the structure itself and other features. The appraisal impacts the amount of money you can borrow and also the tax assessment you pay each year.

A home appraisal will be required by the buyer’s lender to verify the home is worth the value of the loan. The appraisal will also confirm square footage, livable space, lot size, etc.  The lender wants assurance that if the home is foreclosed upon, it can recoup its losses. This is why comparable sales in the area are critical when setting the price of your home. If the appraisal comes in low, the seller will often have to lower the price or pay cash to cover the difference.

Issues on Closing Day

Has the money been transferred to the seller? Has your loan been approved? Are all the people present who have to sign documents? If you don’t close on time, the buyer may have to pay the seller penalty fees. Closing dates can be extended without penalty but keep in mind, the seller has had the home off the market for some time and probably wants the process over sooner than later.

If you want to learn more about the real estate process, please reach out to us at 720.398.2999 or to be connected with a real estate professional.

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