Buying or selling a home is a big decision of most of our life. Depending on the contingencies and timeframe, the buyer or seller gets cold feet and changes their mind to buy or sell the property and it becomes a cause of pending sale.
Sometimes buying a house is complicated for a first-time buyer. Especially they face trouble for securing a mortgage and understanding their budgets. Often, they are unable to review the financing contingency closely. As a result, they will drop out of the pending sale easily.
A home may look perfect from the outside. But a home inspection can turn up a nasty surprise for you. The buyer will claim money to fix or repair the damages of the home. If the homeowner refuses, it can cause a pending sale.
Buying or selling a home is a long and complicated process. It requires a lot of effort from both parties. If any of them fail to deliver the proper documents or make a mistake it becomes difficult to reach the final line. If the buyer hasn’t sold the home, you already own it may become difficult or impossible to obtain financing. As a result, the property will be tagged as a pending home sale.
Usually, the lender evaluates the value of the property before approving the loan. They compare it with other similar houses in the market and appraise the home. But in the seller market, the appraisal is lower than the sale price and the lender can decline the loan. So, it becomes difficult sometimes impossible for a buyer to finance the property without losing their earnest money.