There are many reasons why a house would be pending for months and even fall through. Most fall into three broad categories, including:
- An Issue with the Property
- Mortgage Issues for the buyer
- Personal reasons for the buyer, seller, or even one of the professionals involved
Each contract has contingencies to protect both parties. When a problem arises which triggers one of these clauses it may be a quick fix, but it may also be a long-term headache. We will show you a few of the common reasons in each category.
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A Property Issue Often is Why a House Would be Pending for Months
Issues with the property range from physical to title to use of land problems. Major disasters stemming from any of these topics can easily kill a real estate deal, or if the partis are determined may prolong the process for months.
Repairs Resulting from the Home Inspection
There are many issues that can arise from a home inspection that can take a long time to repair. I am going to focus on just two examples to give you an idea of what is possible: a foundation problem, and a leaky inground oil tank. Both come from my past personal experience while selling real estate.
I once sold a house with a basement where one wall had a lateral crack that caused the wall to bow in. The buyer still wanted to buy the house if the seller was willing to remediate the problem, why he was. It was a complicated process where the back of the house had to be jacked up and artificially supported, while the contractor rebuilt the wall. It took a long time to plan and execute the procedure.
Another case was a leaking oil tank. It came out during the home inspection that the oil tank had leaked into the ground. This is common, and it can be expensive and time consuming. However, in most cases contractors can fix the problem in weeks, unless it leaks into the water table. That is what happened in this case. The local government had to make a report, but the EPA also got involved. Once that happened, it took years, not months, to resolve. My client eventually backed out of the deal once it became clear that it would take several years to fix this problem.
Title Issues
Clear title is a staple of any real estate transaction, and the search can turn up debts, liens, dubious transactions. Liens against the property can cause big problems. Sometimes the owner does not have the funds to pay them. Sometimes, unscrupulous contractors place fraudulent liens that seller must litigate. Other times if the property is very old a historical transaction may not be legitimate. All of these can hold the sale of a house for months.
Encroachments
Encroachments can be a nightmare, and surveys can uncover very thorny issues. Godfrey, Hoffman, and Hodge have a useful article about how to deal with these. Your fence is an inch over the property line, or your shed is not set back far enough. Bigger problems may include a deck that you built, and it extends just over the property line. The bigger the issue, the longer it takes to resolve.
I even had a case where a neighbor brought out a survey that showed the seller’s driveway encroached. He brought it up right before the house was due to close, and it caused all kinds of problems.
Mortgage Issues May Explain Why a House Would be Pending for Months
The mortgage underwriting process always turns up questions about the buyer. This process always takes a long time, and it uncovers many interesting and tricky situations sometimes. Beware if you have a common name, such as John Smith. Picking through all the other people in the country with that same name can take a long time. Technology helps, but it can still be a lengthy process.
Financing Issues
Financing issues can and do derail deals. Wait to buy furniture on credit until after the closing. Why? Because the bank runs your credit right up until the end, and if you make that large purchase you just undid all that underwriting process you just went through.
Missing Paperwork
I had this problem myself when I went to buy my first home. The bank goes through your entire financial history, and they want documents to support your statements. If you cannot find those files, then the bank waits … and waits … and waits.
Low Appraisal
Banks try to get the appraisal done as early as possible, because if it comes back low it causes problems. Many times, this kills the deal, but other times the two parties want to make it work. This requires renegotiation. While it does not take you all the way back to step one, it does take a lot of time.
Personal Reasons Often Reveal Why a House Would be Pending for Months
Sometimes personal reasons get in the way of a real estate closing. These can be frustrating, funny (maybe if you have a very good sense of humor), but often tragic.
Home Sale Contingency
Investopedia has a nice post that gives you the ins and outs of this contract gem. They notoriously hold up deals. The buyer has a house to sell, and he does not have enough money to buy his new home until his old one is closed. This is common, and most of the time real estate professionals can make it look seamless. Not always, though.
If the buyer’s house sale falls through, they must find another buyer themselves. If the seller is willing to wait for the buyer, it can take months to get back to the closing.
Family Emergency
This is the most heart-breaking way a deal gets held up or falls through. The death of a parent may hold things up for a few days, but what if it is the spouse or child? Then it derails the process for longer. Illness can also hold things up a long time. For instance, if one of the parties is in a car accident and hospitalized it may hold the process up for months.
Real Estate Agent Did Not File Paperwork Properly
Real estate agents should always be professional and on top of everything. However, let us be honest. Some are better than others, and even the best can make mistakes. If you see a house in pending for months and months, it maybe that the agent simply did not update the system.
Final Thoughts About Why a House Would be Pending for Months
There are many explanations why a house would be pending for months. Some of them are phantom, silly, frustrating, and even tragic. If you see a house you like that has been pending for a long time, it may be worth it to ask your realtor about it. There may be quite a story behind it.
