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8 common real estate deal breakers -- Page 2

4. Property condition
We all want to know that the house we put a contract on is the same one we're purchasing at closing. That's why that final walk-through can be positively nerve-wracking.

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Case in point: Palm Beach, Fla., where the sale of even a glorious high-end property can hang on a walk-through, according to Paulette Koch, broker with The Corcoran Group Palm Beach.

"I had a listing where the seller had redone a house magnificently, but underneath this gorgeous area rug under the dining room table, he hadn't put hardwood floor in. I was in shock, everyone was in shock, and if he had just told everyone it wouldn't have been the end of the world," she says.

"I always tell my sellers, please tell me everything. When people have the knowledge upfront, they're usually fine with it. People just don't like surprises."

Another common problem: Renters who somehow missed the memo.

"I have a deal now that was supposed to close a week ago but the tenants still aren't out," says Pelosi.

5. Human factors
Sometimes relationships become strained to the breaking point between contract and closing. James has had couples that had to close in separate rooms because they were no longer speaking to one another.

Occasionally the friction between buyer and seller can set off fireworks, as in a bizarre culture clash he once witnessed.

"This Chinese couple was buying new construction from a Scottish builder with a heavy brogue," says James. "The wife wanted the house and the husband didn't really want it, so he kept trying to find ways to kill it.

"On the final walk-through that morning, he kept looking for anything he could nitpick over and finally he and the builder literally got into a physical fight. They really went to it and the police were called. They declined to press charges on each other. We closed the seller at 10 in the morning and the buyer at 2 in the afternoon so they wouldn't even pass in the hallway."

Brook Ashley's quick thinking one morning saved a $4.5 million sale.

"The buyer walked in and said that the seller had taken a potted ficus tree and they were going to cancel this morning's closing. I found a ficus, it couldn't have been more than a $70 ficus, but I found it at 8 o'clock in the morning. It could have just been a bluff, but it didn't feel like it to me."

6. Lien discharges
Although liens on a property are usually discovered during the title search, on occasion they can slip through the cracks, oftentimes due to clerical errors.

"The biggest problem is with lien discharges that haven't been recorded, payoffs on properties that get down to the wire and it's missed by an attorney," says Pelosi.

"That sometimes happens the day before closing and you have to get an extension. The house still has liens against it because it was misrecorded by the attorney that handled the payoff in the very beginning. That happens a lot. The closing attorney for the lender usually finds it."

7. Homeowner associations
Some homeowner associations, especially the powerful ones that rule urban co-ops and condominium buildings, can squirrel a sale at the last minute when the prospective buyer discovers unacceptable restrictions, such as no pets.

"Our real estate contract now requires the seller to deliver the last six months' minutes of the homeowner association [meetings]," says Kraft. "Deals can fall through when the buyers find out there is something that the HOA has voted on that nobody told them about."

8. The X factor
Award for strangest deal breaker goes to Brook Ashley.

"I had a condo sale where we were in escrow with a little old lady whose only companion was a large, vicious, horrible Himalayan cat named Miss Kitty. She called to cancel escrow because she said she had talked to Miss Kitty and Miss Kitty said it wasn't the right thing to do.

"We canceled it on Miss Kitty's hiss. That was fun, telling the selling agent."

Jay MacDonald is a contributing editor based in Mississippi.

PAGE 1 | 2

 
-- Posted: Dec. 30, 2004
     

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