Home Selling in Pleasanton>Question Details

alexmartinez…, Home Seller in Pleasanton, CA

what are the common reasons for a termination notice?

Asked by alexmartinez581, Pleasanton, CA Tue Mar 19, 2013

after an inspection of the house, buyers decided to terminated contract

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The reason for buyers to back out doesn't even have to be major damage identified in the inspections.

First time buyers, in particular, are uncertain of the unknown. If they have limited funds to begin with, and are stretching to have enough money for down payment and closing costs, they find it difficult to think about forking over more dollars for repairs.

Concurrently, if the buyers were applying for the loan, and the appraisal came in at less than what they're offering, they may also back out after viewing the inspections, without attempting to negotiate a lower contract. Lower value, higher/unexpected repair costs may sour them on the deal.

Or maybe, they also didn't qualify for the loan.

So just buckle up, put the property back on the market. At this time, it's still a seller's market. There are enough buyers out there who may not be swayed.

Incidentally, you have a right, as the seller, to copies of those disclosures especially now that they are considered material facts that need to be disclosed to the next buyer.

The advantage to you, and to potential buyers is that with these inspections, there are no/fewer surprises as to the condition of the house. The next buyer will go in the deal with eyes wide open.

Good luck.
1 vote Thank Flag Link Tue Mar 19, 2013
To be honest, buyers can cancel for just about any reason using the Inspection Contingency as their out. It could be a valid issue concerning the condition of the property or neighborhood or a very subjective issue such as smells, traffic noise, train whistles, airplanes overhead, a barking dog next door, too many cars parked on the street … and so on.

The reasons are actually endless.

Smart sellers understand this going into a transaction and also understand that if a buyer really wants out (regardless of the reason), there is almost no way to keep them in contract. It's best to let them go and move on to a more dedicated buyer - and in this market, there is no end of those.
1 vote Thank Flag Link Tue Mar 19, 2013
Termite damage/visible infestation, bad smells, faulty wiring, plumbing problems, general buyer remorse - and my all time favorite... buyer just had their offer accepted on another house they like better than yours.
1 vote Thank Flag Link Tue Mar 19, 2013
After going into contract to buy your house completion of the contract and the close of the sale were “contingent” upon the buyer’s satisfaction with the condition of the property. Within the contingency period, the buyer can cancel (terminate) the purchase for any reason of dissatisfaction. I would have expected that the buyer would have expressed their dissatisfaction but, if not, ask. No reason they should not tell you.

As Carl said, it is best to move on to a more committed buyer. In the current market, you should not have trouble finding one.
0 votes Thank Flag Link Wed Mar 20, 2013
Reasons to terminate can vary. Problems can arise from the inspections that were not visible before. Sellers in this market might be reluctant to fix any issues so a buyer can use this as an out. Not qualifying for the loan a buyer wants is another reason. The buyer may have gotten news of a job change. Appraisal did not come in at asking price. Buyers can also get cold feet after they consider all the above. It really helps when you have a seasoned agent who has wrtten the offer and explained everything to the buyer prior to writing.
0 votes Thank Flag Link Wed Mar 20, 2013
As John just mentioned, there could be numerous possible faults with the home. Unless there is something truly earth-shattering, it shouldn't kill the deal, but should be a point of renegotiation.

Because of the risk of the unknown, I generally recommend to my sellers that they have the home inspected PRIOR to putting on the market. This way, any defects can be disclosed upfront, precluding any nasty surprises a buyer may find. It also helps prevent 'frivolous cancellations' of contract due to property inspections.

In addition, perhaps the buyer's financing fell through (or they simply failed to qualify for the loan). Or maybe the home didn't appraise at the contract value (or close to it).

I hate to say it as well; and I too have seen it happen often: the buyer cancels one contract as he had an offer accepted on yet another home. Highly unethical, but nevertheless, it happens.

Good luck with your sale!
0 votes Thank Flag Link Tue Mar 19, 2013
In some cases the inspection found major damage, structurally, infestation or mold and the cost to cure is prohibitive to the trancsaction
0 votes Thank Flag Link Tue Mar 19, 2013
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