Why 70% say their last transaction was one of the most stressful periods in their life.
February, 2025
Traditional home sales are placing sellers and buyers on a teeter-totter of emotions. And they are not liking the ride.
Where you live is your sanctuary. When you choose to make a change in your home you should not be pushed to the max emotionally. But that is what is happening when 70% say their last transaction was one of the most stressful periods in their life.
Uncertainty is the problem. Traditional contracts create uncertainty. It is one thing to be uncertain about what is for dinner. But it is another game to be uncertain about moving or not moving, and when. It is difficult to take care of what needs to be done when you don’t know if it will happen.
Traditional sales has many moving parts all the way to closing. It has been that way for decades and has grown more cumbersome over the years. It only takes one of those moving parts to put a cog in the transaction and initiate the stress.
Sellers and buyers play give and take throughout the escrow period to keep the transaction together. Here are a few of the moving parts to a contract that cause the chaos.
INSPECTION REPORT
In a traditional contract the inspection is done after the parties have agreed on a sales price and closing day. After the contract is singed the buyer hires an inspector to create a report on what is going to be conveyed at closing.
Homes are like people. There is never a perfect one. The inspector will find issues to be concerned about. Price has already been negotiated. The push pull begins. Buyer remorse starts happening.
The buyer negotiated thinking everything was going to be ok. To stay in as the buyer, the buyer requests repairs, a price adjustment, or both. Renegotiations begin.
And if repairs are made there is always the question of were they done properly. The issues from the inspection may not be resolved until closing. Or worse, the issues push the closing further out causing moving plans to be adjusted.
APPRAISAL AND LOAN APPROVAL
Before the buyer gets their loan approved they need to pay for an appraisal. In a traditional contract the buyer has a cancellation clause tied to the outcome of the appraisal and financing.
If the appraisal comes in lower than the contracted purchase price, the loan may be denied. To keep the contract in force, seller and buyer may need to renegotiate the purchase price. Or the buyer may need to make up the difference in more cash at closing.
If the appraisal comes in higher than the contract price, the seller may feel like they have left money on the table. Buyer happy. Seller not happy.
Besides appraisal, a final loan approval will not occur until the buyers income and credit have been fully documented and approved. Until that time the buyer is pre-approved which is not the same as full loan approval. Both seller and buyer are waiting on final loan approval from the lender.
And if there are inspection issues, the lender will require the renegotiation of those issues to meet their guidelines. And also be assured they were done properly before closing.
TITLE REPORT AND SURVEY
A title search of the property may turn up liens or judgements. Resolving them takes time and money. Does the seller have enough money to release the liens or judgements? Is there another party on title and finding that person to sign-off is difficult or not possible?
There may be issues with the legal description of the property, the property boundaries, and/or easements attached to the property. An issue that may have never been addressed with previous sales may now become a roadblock.
The title issues that popup may delay or cause a cancellation of the contract. They would also cause lender approval problems and need to be resolved to the lenders satisfaction.
IN CONCLUSION
What I’ve hi-lighted are the main issues that can cause problems in a traditional contract. They are the biggest culprits to creating the stressful times of an escrow period.
All of these situations cost money and time. Pressure mounts as the buyer keeps spending money throughout the escrow period. They often feel trapped in their renegotiations. It is easy for buyer’s remorse to set in and possibly cancel the transaction. It could occur on any one of the contingencies.
And the seller never knows what can become a breaking point to cause the transaction to fail. They are sitting on pins and needles worrying if they will get to a closing. It is time to use available technologies to make the process less stressful.
Further Exploration & Resources
Navigating the complexities of traditional real estate transactions can be overwhelming. If you’re looking to dive deeper into the key challenges and solutions, these resources provide valuable insights:
1. Understanding Home Inspections & Repairs
- American Society of Home Inspectors (ASHI) – Learn about the home inspection process and what to expect.
- HUD Guide to Home Inspections – The U.S. Department of Housing and Urban Development (HUD) explains the importance of inspections before closing.
2. Appraisals & Loan Approval Process
- Consumer Financial Protection Bureau (CFPB) – Understanding Home Appraisals – A breakdown of how appraisals affect financing.
- Fannie Mae Mortgage Process Guide – Learn how mortgage approvals work and what factors lenders consider.
3. Title Reports & Property Surveys
- American Land Title Association (ALTA) – Information on title searches, liens, and protecting property ownership rights.
- National Society of Professional Surveyors (NSPS) – Learn about property boundary surveys and easements.
4. Real Estate Transaction Best Practices
- National Association of Realtors (NAR) – Updates on real estate industry trends and transaction guidelines.
- Zillow Home Selling Guide – Step-by-step insights for home sellers navigating traditional real estate transactions.
5. Alternative Home Selling & Buying Solutions
- Opendoor – Learn about instant offers and simplified home selling.
- RedfinNow – Compare traditional vs. modern home sale approaches.
These resources can help buyers and sellers better understand the challenges of traditional real estate transactions and explore alternative solutions to reduce stress.
