John's answers are good and I cannot state strongly enough how important working with a good lender and working with the right agent/broker is.
A bad/dishonest/unreliable lender can cause unending grief by making promises they can't deliver on. We have several we work with routinely and one of the things I like about them most is that they don't make promises they can't deliver on. You also need one who is experienced in your local market - out of area lenders, and that can be as close as the next city, can ruin deals by lack of knowledge.
A great agent/broker can save you untold time and money by informing you of potential problems before you even get into contract, as well as getting the best price possible through market knowledge, investigation, and negotiating skills.
Lance King/Owner-Managing Broker
1) Seller did not have inspections done prior to listing the property for sale and now discovers termite damage, plumbing problems, etc. that must be revealed in disclosure documents. Many buyers see these disclosures and pass on the property because they believe the problems noted may either be too clostly to repair or delay an escrow closing.
2) Poor mortgage qualification. Sellers should screen buyers in detail regarding their mortgage pre-approval, requiring proper pre-approval documents and proof of funds for down payment.
3) Defects in title. I work with a lot of listings that involve property that has been owned by a family for many generations. Modern title insurance companies do a fantastic job of researching and recording changes in title, and properties that have changed title in the last 10 - 20 years are usually well documented and correct. Properties that were last sold more than 80 years ago often have title problems and require significant research, and sometimes court decisions, to confirm title to the level of quality needed for a title company to issue a title insurance policy. I have a property in escrow that was last transferred in 1908 - it took three revisions to get the title report right. Title problems often take many months to correct; my record for the longest time to correct a title problem was 6 months for a condo that was built in Palo Alto in 1988, and it did require a cour-directed title correction.
I hope this information is helpful for prospective sellers.
Any number of things can happen during an escrow. It's always a good idea for the seller to do pre-sale pest and contractor inspections on the property (most owners of condos don't do pest inspections). This is done to help make the seller aware of any potential property issues prior to the buyer writing their offer. It's always encouraged that the buyers to do their own inspections too.
Regarding the buyer's financing, it's a good idea for the listing agent to call and talk to the mortgage person directly to confirm that the lender has actually reviewed the buyer's financials, pulled their credit reports, etc. Sometimes things can happen which are outside of the buyer's control which could cause the financing not to come through. The biggest culprit is the loss of a job/income. In short, it helps to get as much info from the mortgage person as possible. It also helps if the buyers usues a lender with a proven track record and good reputation.
Hope that helps.
Rich Bennett, Realtor
Zephyr Real Estate