- With a reputable local realtor, property owners have the right to expect that a home sale process will run smoothly and there will be no such failed home sale
- Many situations do arise that cause a home sale to fail, so educating yourself ahead can help you avoid surprises and get your home sold on the desired timeline
- Even if you have recently experienced a failed home sale, there are still alternatives to selling a house fast in Los Angeles
As a homeowner intent on selling your house in Los Angeles, you want to get ahead of some surprises that ultimately delay that sale of your house, especially if you’re in financial distress and at risk of foreclosure where time is of the essence.
Even after finding a buyer, agreeing to a price, and entering into escrow, the home sale can still fall apart. You cancel escrow, the prospective buyer cancels escrow… whatever you call it and regardless of fault, you the homeowner are back to Day 1 of selling your house in Los Angeles, again. In this blog post, we’ll discuss the most common reasons why property sales fail in Los Angeles and explore alternative paths to sell your house.
Overpriced Property
One of the main reasons home sales fail in Los Angeles is due to an overpriced property. When the price of the property is higher than the market value, it can deter potential buyers and prolong the selling process. Today in 2023, many home owners selling their house in Los Angeles still believe they can command the same prices they saw a couple of years ago. Unfortunately, they get shocked to find out that there are few buyers who can qualify to buy the same home for the same price because interest rates have gone up dramatically. Knowing this it is not a surprise that the volume of successful home sales has declined in 2023.
To avoid overpricing, research the local real estate market to determine the value of your property and set the right price. Believe it or not… sometimes, by setting the price at or below market or where you actually want the final price to be, you are able to attract more attention, multiple bidders, and in the process, drive your price much higher. Otherwise, expect for the home to sit on the market for some extra time and possibly, end up in a failed home sale.
Poor Property Condition
Another reason property sales fail in Los Angeles is due to the poor condition of the property. Traditional buyers are often hesitant to invest in properties that require extensive repairs or renovations, especially in a highly competitive market like Los Angeles. Prices are already high up and down the cost of California, so buying a property and then putting more money into it to repair the house isn’t in the plans for most buyers who plan to live in the house after closing on the sale.
Knowing that, consider making necessary repairs and upgrades ahead of the sale to enhance the appeal of your property and attract potential buyers. If you can’t afford to make the necessary repairs and upgrades upfront, expect for the home to sit on the market for some extra time or get cancelled in the middle of escrow, and possibly, end up as a failed house sale.
Financing Issues
Because most buyers of homes in Los Angeles don’t have all the cash to buy a house, the put a small % down as a down payment and get financing from a bank or lender. Financing (getting a loan) is a crucial factor in property sales, and any unexpected changes or issues can derail the sale altogether, ultimately, causing the house sale to fall through.
Buyers may face difficulties obtaining a mortgage because of a poor credit history or prior financial distress (late payments, foreclosure, bankruptcy), or the lender may uncover problems with the property during the appraisal process which reduces the amount they’ll lend or deny the loan altogether. In order to approve a loan amount against a home for a buyer, the lender sends out a certified appraiser. The appraiser takes your home’s features, age and condition, then compares it to other similar homes in the area and what they sell for. Because your home’s value is based on the value of similar homes in the area, any homes items that are not favorable in comparison will cause your home to be valued lower.
Items Reviewed During a Home Appraisal
- Location
- Number of bedrooms and bathrooms
- Less livable square footage
- Smaller lot size
- Lot slope
- Home maintenance and upgrades
Surprises That Result in a Lower Appraisal Value
- Unmaintained plumbing, electrical, or HVAC
- Non-upgraded kitchens or bathrooms
- Unpermitted home additions
- Poor landscaping
To avoid such issues, the buyer should work closely with their lender and real estate agent to ensure all necessary documentation and financing arrangements are in order well ahead of the sales process. Otherwise, you the seller risks the house sale falling through while in escrow– a failed home sale.
Legal Issues
Legal issues can also cause property sales in Los Angeles to fall out of escrow, thus resulting in a failed home sale. This can include disputes over property boundaries, unresolved liens, claims to ownership on the property title, or other unforeseen legal obstacles that need to be addressed before the sale can proceed. These legal reasons can vary based on the city and state where the property is located. Ensure all legal matters related to your property are resolved before putting it on the market to avoid any surprises that result in a failed home sale.
Selling a property in California can be a challenging journey, but understanding why prior home sales failed and having alternative paths can be the key to success. By working with a reliable realtor, making necessary repairs and upgrades, ensuring all legal matters are resolved, and exploring creative solutions, you can sell your property quickly and efficiently in California. So, don’t give up hope and stay motivated in your home selling journey.
Alternative: Sell Your House to Fair Sale Homes
If you’ve had a house sale fail in Los Angeles, don’t despair. If the required repairs are too expensive for you to make, you can still sell your house fast successfully without making those repairs. Professional real estate buyers from Fair Sale Homes can assess your situation and take on the repairs, so that you can sell your house and walk away with your profit. We have helped owners like you sell a house in Los Angeles after a failed escrow.
Are you thinking about buying or selling a home in CA? Fair Sale Homes is actively helping buyers and sellers in CA. Reach out to Fair Sale Homes to learn more about the various options available to you. There is never any cost, hassle, or obligation to work together. We are happy to answer any questions you have about buying or selling real estate in Los Angeles whether or not you choose to work with our team! (626) 863-7006
WE BUY HOMES across cities Southern California. A sample of cities where we buy homes for cash: East Los Angeles, Lincoln Heights, Silver Lake, Atwater Village, Van Nuys, Northridge, Pacoima, Panorama City, Harbor City, and Wilmington. Also, we buy apartments in Los Angeles, CA. Whether you are experiencing home foreclosure, code violation, failed property sale, or simply have an unwanted property, we will work with you to find a solution.