1. Common Problems

Most of the time the home buying process will go smoothly and without problems. However, there might be snags which can be stressful to you as a buyer. When something happens, your real estate practitioner should be there to help you solve the problem and to provide advice on what you should do.

The following are some of the more common problems that can arise during the purchasing process, both before and after the sale has closed. This list isn’t designed to scare you and there is no guarantee that these things will happen. Instead, this is just information so you will understand what is going on should one of these problems arise.

  • The Bank won’t pay all the Purchase Price: When you apply for a mortgage, the lender will usually get a home appraisal before they approve your request. They do this to make sure the property is worth more than the mortgage, as a way to protect themselves. If their appraisal says the property is worth less than the mortgage amount, the bank may only give you that lower amount, leaving you to put together the rest of the purchase price on your own. This can be a problem for a buyer, but you do have some options like asking for a second opinion from a qualified appraiser.
  • There are issues with the Land Title: Before a purchase can close, any homebuyer must complete a title search and get title insurance. This is usually done by your lawyer, and in most cases, there are no issues. In some cases, there may be some problems with the Land Title which can prevent a sale from closing. A few examples of problems might be a claim on the property by a co-owner or relative (meaning the owner doesn’t have the power to sell the property), or a lien on the property by a contractor or the government (meaning they owe a lot of money to these parties and may lose ownership of the property they are trying to sell).
  • The home inspection finds major problems: One of the conditions you should put on every offer to buy is that you have the right to a home inspection before the sale closes. If the inspector finds some big problems with the home, you should have the power to walk away from the sale or require the seller to make repairs at their own expense.
  • Problems with Insurance: When you buy a home, you will need to get home insurance before your lender will release the mortgage funds to you. If the home you are trying to buy has had lots of large claims, an insurance company may decide not to insure the home. This usually only happens to homes that are in bad locations (low-lying, near a collapsing riverbank, etc.), or are in very poor shape.

  • The Seller backs out: Every once in a while, a seller will decide to back out of a deal. This can happen because they think they can get a better offer, they don’t want to make the required repairs, or they just don’t want to move. If this happens, and the sale has closed, you should receive your deposit back and may be entitled to extra damages as well. Your real estate lawyer should be able to advise you on your rights and what to do next.