Leaving The Wrong Home For The Right Reasons

Buying real estate in New York is competitive. Finding the right home for you and your family (and having your offer accepted) could feel like winning the lottery. Hence, it can be challenging to walk away from a sale.

There are several legitimate reasons why buyers would opt out of the deal, especially if it is in their best interest. Because there is a lot of emotion tied into buying a home, you could be torn about whether leaving your dream home is the right move for your long-term financial future. However, there are times when you should strongly consider doing so.

Losing From The Start

One of the most common reasons buyers walk away from a sale is that the house appraises for less than you offered. This poses two potential problems. Your lender, especially a bank, will access the loan-to-value ratio. When the appraisal comes back low, the loan-to-value ratio increases. To offset this, you may need to come up with a more substantial down payment.

Even if you have the extra money to do this, should you? People who buy homes worth less than what they pay are said to be “underwater.” In other words, your new house has to appreciate before you break even.

Title Searches

Imagine if you have bought a home. Days or years later after purchasing it, someone claims they are the rightful owners of the property. During your due diligence period, you will conduct a title search. A title insurance company ensures the title to the home is clean.

The title insurance company will defend you against those claims above on your property with title insurance. Typically, title insurance companies will be close to certain that the title is clean before issuing your policy.

Suppose the title search shows that a creditor has a claim on your future property or that someone else’s property infringes on your own (or yours on theirs). In that case, you should have a serious conversation with an attorney and real estate agent about the possibility of continuing the sale.

Drucker & Mattia, PLLC

Drucker & Mattia prides itself on being a boutique firm that has the capabilities of a larger one. We can navigate real property transactions and litigation with two attorneys with more than four decades of combined experience. For further information about how we can help you, contact us for a free initial consultation.